The public staff of the NC Utilities Commission went behind closed doors with Duke Energy Progress today to hammer out a partial settlement agreement regarding the utility’s request for a 16.7 percent increase in residential rates.
These private negotiations occurred instead of a public evidentiary hearing, which was scheduled for today at 1 p.m. That hearing has been postponed until next Monday at 1:30 p.m..
According to the preliminary settlement, the main takeaway involves the return on equity — the amount of net income that measures profitability. Under the preliminary settlement, that return on equity would equal 9.9 percent. Duke Energy had originally proposed a figure of 10.75 percent. The public staff wanted a 9.2 percent return, according to the Charlotte Business Journal.
In terms of revenue, a 10.75 percent return equals $419 million; a 9.2 percent return, $319 million.
The public staff had also disagreed with Duke’s overall rate increase request of 14 percent (the average of industrial and residential hikes), recommending that it go up less than one-tenth of a percent.
The overall rate hike was not announced in the settlement, which will be part of next Monday’s hearing.
But the public staff, which represents the ratepayers, and the utility could not agree on who should bear the costs of the coal ash cleanups. Those costs — abut $130 million — factor into Duke Energy’s rate hike request, as do repairs to infrastructure that had been damaged by Hurricane Matthew.
Duke Energy Carolinas, which has a different service area than Duke Energy Progress, has requested an average rate hike of 13.6 percent. However, residential customers would see a greater increase — 16.7 percent — versus commercial and industrial customers –10.9 percent.
Public hearings on that request begin in January.