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Duke Energy Reaches Preliminary Agreement With NC Utilities Commission, Reduces Rate Hike

On Tuesday, Duke Energy and the North Carolina Utility Commission reached a preliminary settlement on Duke’s request for a substantial rate increase on residential and commercial utilities.

The proposed agreement would cut Duke’s original request of a 13% residential rate increase to around 7%, a hike which would phase in over a two year period, starting with a 4.3% increase in January, 2010. The proposed agreement would reduce Duke’s expected profit increase from $496 million to $315 million.

Commercial and industrial groups have sought out similar reductions.

The Public Utilities Commission is scheduled to hold a hearing in Raleigh on Wednesday about the proposed rate request. According to an article by Bruce Henderson of the Charlotte Observer, “it is not known how the nine other formal parties to the rate case will regard the…compromise” and that the state Attorney General’s office has asked for a delay in Wednesday’s hearing to “analyze the agreement.”

Duke Energy’s official press release

Just the day before, the Utilities Commission held the last in a string of public hearings in which Duke Energy customers were able to make public comments concerning the hike. According to Commission Chairman Edward Finley, Jr., thousands of emails, phone calls and letters had also poured in opposing the increase.

During yesterday’s hearing, over a dozen residents spoke out against the rate hike, citing health concerns, economy, and the lack of need for the Cliffside coal-fired power plant expansion

Read Appalachian Voices’ official submitted commenton the Duke Energy rate hike.

Several speakers chastised Duke Energy for its failure to move towards more renewable energy. Elizabeth Goyer, a UNC Asheville environmental studies student, noted that while the utility claims to be pushing for more renewable sources, only about 3% of Duke’s electricity comes from alternates to coal. “I am waiting for Duke to make a real commitment to renewable energy,” she said.

Zell McGee, a North Carolina native and a medical expert who taught for years in Utah, testified about known health effects of coal-fired power plants. “Healthcare costs are translated to the customers,” he said, further increasing their financial burden beyond the rate increase. He compared rate payers to prey and Duke Energy to predators, and said that the Commission needed to work harder to “encourage harmony between utility companies and their customers.”

NC residents wait to speak at a hearing on Duke Energy's proposed rate hikeA representative of the North Carolina Conservation Network delivered a petition signed by over 1500 citizens asking that the rate hike request be rejected, and an attorney with the North Carolina Justice Center, testified on behalf of the disadvantaged residents of the state, noting that of the 1.3 million poor people currently living in North Carolina, none of them could afford to pay for the increase, either monetarily or physically.

“One thing that has not been mentioned today,” Ripley said, “is the extensive research that has been done to show correlations between energy costs and the health of our children and of our poor elderly people in this state.” Ripley elaborated by explaining that increased external costs means less money to spend on food, which leads to malnutrition and poor health.

Ruby Best, a disabled 61-year-old from Durham, N.C., testified that her electricity rates have steadily increased since she bought her home in 2005, in spite of changes in energy use habits, and that she currently struggling to pay her bills. “If this [increase] is granted, how am I going to be able to manage this?” she asked.

And Casey Baker, whose family owns a vineyard and farm near the Cliffside plant, mentioned that the rate increase would seriously effect farmers who rely on electricity to pump water and power farm equipment. “If the rate increase comes in, our profit margins are going to be seriously cut,” he said, and noted that some of the farmers have begun researching off-the-grid alternatives such as solar.

Representatives from Duke Energy and several environmental groups were present, but only residents were allowed to testify. No residents at the hearing on Monday spoke out in favor of the rate hikes.

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