Why Pay More When Energy Hogs Don’t

Monday November 28th is the final of five hearings of the NC Utilities Commission (NCUC) on the request by Duke Power to raise its electricity rates. Between this request, the proposed merger of Progress and Duke and the companies’ dirty energy portfolios, electricity rates for North Carolinians may soon soar. Your voice is needed to stop the rate hikes which in turn can cause Duke to increase efficiency and renewables in its energy mix.

 

Protest at Duke Energy, Charlotte

NC WARN, the NC Justice Center and the NC Housing Coalition are urging the NCUC to reject the increase and instead require the utility to adopt a fair method for allocating rates for residential, commercial and industrial customers. Currently Duke penalizes residential customers because it uses a rate allocation method based on one record-breaking heat wave in 2010. During a single “summer peak” hour, residential customers’ air conditioning pushed peak demand and Duke is using that to allocate all capital costs of power plants and transmission for the entire year.

This skews rates for residential customers.

On the other hand, most commercial and industrial customers use large amounts of energy year round – like energy hogs Google, Apple and Facebook data centers. Under Duke’s “summer peak” formula, those data centers’ year-round energy use is not factored in to allocating the costs of power plants and transmission.

The results of this skewed formula – in 2010, Duke’s data center customers paid on average about 4.6 cents per kilowatt hour (kWh) for electricity, while residential customers paid almost 9 cents. With Apple and Facebook eligible for 20% discounts on their bills this year, data centers’ average costs could go down, even as Duke is asking to raise the main residential rate to over 10.5 cents per kWh.

In Duke’s 2009 rate case, the Public Staff testified that a method which considers customers’ year-round energy use “is the most fair and equitable allocation methodology overall for customers and most accurately reflects electric utility system planning.”

Come out to the hearing in Raleigh on November 28th at 1 PM, Dobbs Building, 430 North Salisbury Street. If you cannot attend,  comments can be sent to: Ed Finley, Chair of the NCUC at finley@ncuc.net

 

2 Comments

  1. Carina

    November 22, 2011 at 5:04 pm

    Wow. Thanks for the sobering information. I wonder now why I assumed that Progress Energy – Duke Energy calculated rates in a reasonable and fair way. One more enlightenment (no pun intended) about how decisions in this country have skewed totally to the benefit of the corporation and not the people being served. Whatever happened to the honor of being in service to others. Sad really. And downright disgusting.

  2. jaustin

    November 23, 2011 at 9:10 am

    How about allowing competition in the energy sector like we do in cell phone world???? I could choose who best serves me at the rate I can afford…. instead, I must use the provider GovCo and their owners say. If it were a free market, Duke Power could raise their rates all they wanted…. and I could find someone else to do business with.