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New report links rate increases for Duke Energy customers mostly to natural gas volatility

Duke Energy has already replaced its coal-fired Buck Steam Station near Salisbury with a gas-fired plant.
Duke Energy
Duke Energy has already replaced its coal-fired Buck Steam Station near Salisbury with a gas-fired plant.

Many Duke Energy customers saw higher energy bills last year due to a sharp increase in natural gas prices, according to a new report by the Environmental Defense Fund. The report examined how price fluctuations impact ratepayers’ electrical bills to make a pitch for more renewable energy.

Fuel prices caused two-thirds of electrical bill increases for Duke Energy Carolinas ratepayers over the last seven years, said Will Scott, the southeast climate and clean energy director for the Environmental Defense Fund.

“This isn’t because of investment in long-term infrastructure,” Scott said. “It’s because we’ve increased our reliance on one particular fuel source.”

That fuel source is natural gas. The fund’s report found that customer rates in the Duke Energy Carolinas region rose sharply in 2023 following a steep increase in the cost of natural gas.

“Increases in gas prices aren’t borne by Duke,” said Scott. “They don’t have to eat those costs. Those get passed directly on to ratepayers.”

Conversely, when natural gas prices fall, those savings are passed on to ratepayers. The North Carolina Utility Commission sets electricity rates every three years and adds or subtracts an amount from that every year based on what Duke Energy spends on fuel.

Renewable energy sources, Scott said, don’t suffer from a similar price volatility.

“When you sign a contract to purchase those resources, you know how much you’re paying for power 10, 15, 20 years in advance,” said Scott.

Natural gas has become a bigger part of North Carolina’s energy mix as the utility phases out coal. The private utility plans to add 9,000 megawatts of new gas-generated electricity to the grid in the next decade. Solar and wind generation will rise as well, but natural gas will remain a large part of Duke Energy’s power generation over the next decade, according to the utility’s most recent carbon plan proposal.

Duke Energy spokesperson Bill Norton said in a written statement that the utility needs a “diverse, all-of-the-above approach to power the region’s growing economy."

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Zachary Turner is a climate reporter and author of the WFAE Climate News newsletter. He freelanced for radio and digital print, reporting on environmental issues in North Carolina.