In a rare move, Duke Energy Carolinas has slashed its request for a two-year rate increase that is pending before the N.C. Utilities Commission.
Kendal Bowman, the president of Duke Energy's operations in North Carolina, told the Commission that the move is in reaction to a series of public hearings the company held earlier this year. Bowman told the Commission that she attended several of the hearings and heard affordability concerns directly from customers.
"After hearing those concerns directly, we took further action to evaluate whether a lower request was possible and have identified select opportunities to reduce the request while still making the investments and taking the actions needed to provide reliable service," Bowman wrote.
Duke has slashed its overall request for Duke Energy Carolinas customers from a 14.3% increase over 2027 and 2028 to a 9.3% increase. For residential customers specifically, Duke has decreased its request from the 18% in the original November plan to 11.6% over two years.
In total, the updated request would decrease Duke Energy Carolinas' base case revenue from $564 million to $264 million.
"To my knowledge, the Company has never made a reduction of this magnitude on its own initiative in its rebuttal case," Bowman wrote.
To lower the rate hike, Duke Energy Carolinas is proposing:
- Slashing its return on equity, or how much profit it can earn from customers on capital investments, from 10.95% to 10.48%. LaWanda Jiggetts, Duke Energy Carolinas' rates & regulatory strategy director, wrote in testimony this change will save customers $84.9 million.
- Withdrawing a 2024 depreciation study that could have allowed Duke Energy to collect as much as $80.5 million in infrastructure costs for depreciating assets, mainly coal-fired power plants.
- Returning excess funds recovered for Hurricane Helene recovery over two years instead of five years, a change Jiggetts told the Commission will save customers $43.3 million.
- Securitizing the costs of responding to a January 2026 winter storm, rather than seeking to recover them as part of this rate case, a step Jiggetts said will result in $27.8 million in savings.
- Removing about $173.2 million in upgrades associated with large load customers, along with revenue from serving those facilities. This results in a total reduction of about $12.1 million, Jiggetts told the Commission.
- Accepting a number of changes the North Carolina Public Staff, the public agency tasked with protecting ratepayer interests, suggested for the multiyear rate plan.
Democratic politicians argued that Duke Energy should have proposed even steeper cuts to its requested increases.
"It’s a step in the right direction, but it’s still too high. We’ll keep making our case for lower rates - and for making sure families don’t get stuck paying unfair costs for data centers and other large users," Attorney General Jeff Jackson, whose office has intervened in the case, said in a post on social media platform X.
Jackson has previously argued that Duke Energy Carolinas should be seeking a 7.4% return on equity, an amount Duke officials argued in filings would threaten the company's credit ratings and potentially increase the costs of financing necessary construction, costs that would ultimately be passed along to customers.
Gov. Josh Stein echoed Jackson's sentiment that the request is still higher than it should be. He urged the Utilities Commission to take steps to lower it further.
"This development proves that when North Carolinians make their voices heard, it makes a difference. Let’s keep advocating for the Utilities Commission to do right by consumers. We need to lower costs for families – because every dollar counts," Stein wrote.
The rate case is set to be the subject of an expert witness hearing July 7 at the Utilities Commission's hearing room in the Dobbs Building, 430 N. Salisbury St., Raleigh. From there, the Utilities Commission can choose to accept Duke's request or reach its own conclusion about a reasonable increase.
