Duke To Seek Rate Hikes This Summer For New Plants, Matthew Repairs, Coal Ash Costs
Duke Energy this summer will ask North Carolina regulators to raise the rates consumers pay on their electricity bills for the first time in four years. The rate hikes – at Duke’s two electricity subsidiaries in the state - would help pay for new plants, Hurricane Matthew recovery costs and coal ash cleanups.
Duke rates have stayed flat or even fallen in recent years thanks in part to lower fuel costs. But a few big expenses have been piling up. So Chief Financial Officer Steve Young told analysts last week Duke will seek rate increases this summer.
“These filings will be the first in North Carolina in four years, to recover costs associated with our capital investments in more efficient generation, such as the Lee combined cycle facility, nuclear projects and coal ash basin closure activities,” Young said Thursday.
The gas-fired Lee plant is under construction in Anderson County, South Carolina. When it opens later this year, it will supply electricity to Duke customers in North and South Carolina. Duke also hopes to recover the cost of repairs after Hurricane Matthew last fall – estimated at about $150 million.
But a major part of the increase will pay to clean up millions of tons of potentially toxic coal ash buried near 14 Duke plants around the state.
Duke already has spent about $770 million on coal ash cleanups in the Carolinas, and the cost eventually could total more than five billion dollars.
Customers didn’t pay for emergency cleanups like the one after the 2014 spill at the Dan River plant in Eden, or for millions of dollars in fines related to coal ash leaks. Those were paid by Duke and its investors.
But customers will be asked to pay for the rest of the cleanups through this rate hike. Duke spokesman Jeff Brooks compared it to other routine activities, like closing a plant or installing pollution controls.
“It helps to meet state requirements, it helps to meet federal requirements, and it's part of the service that we provide in generating electricity for our customers. So that's a shared responsibility that we have with our customers,” Brooks said.
We won’t know the amount of any rate increases until Duke's filings this summer. If state regulators approve, the new rates could begin in the first half of 2018.
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