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UtilitiesNC Policy Watch followers will recall that last week we reported on a an recent and egregious giveaway to big utility companies in which the North Carolina Utilities Commission pulled a mysterious and unforeseen rabbit out of a hat to reverse its own previous ruling from earlier this year.

The case revolves around whether all of the 2013 tax cuts enacted by the General Assembly and Governor McCrory should be accounted for when it comes to computing the rates that regulated monopolies like Duke Energy are allowed to charge ratepayers. In May, the Commission ruled by a 6-1 vote that they must.

A few months later, however, in an abrupt and apparently unprecedented move, three McCrory appointees to the Commission changed their minds and signed on to a new opinion by the Commission chair, Ed Finley, in which the May ruling was summarily reversed and the “exceptions” (i.e. the appeal) submitted by two of the power companies upheld. Parties in the case were not even given a chance to submit arguments on the question.

According to the new majority, the cut to the state’s corporate income tax should not be factored into rates and companies should be free to keep the windfall if they like. According to the three overruled commissioners:

“The Majority’s decision, rescinding, in part, the Commission’s May 13, 2014 Order in this docket, allows the utilities to charge ratepayers in perpetuity to collect for taxes that the utilities no longer pay. The Majority’s decision errs with respect to fairness to ratepayers; errs procedurally with respect to due process and the limitations of the Commission’s right to rescind, alter, or amend an Order; and errs in its content with respect to its legal conclusions.”

As it turns out now — perhaps because of the adverse publicity here and elsewhere — most, if not all of the big utilities are now saying they will not keep the windfall.

This is good news for consumers but it should not be the end of the story. Even if the utilities are too embarrassed to keep their unearned money, the Commission majority’s heavy-handed action was and is still unacceptable and sets a terrible precedent — both with respect to substance and procedure.

Let’s hope that both the Utilities Commission Public Staff and Attorney General Roy Cooper stick to their guns, appeal the matter to the state judiciary and secure an order vindicating the rights of consumers ASAP.

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Some giant corporations complain about and battle government. Others try to co-opt and corrupt it. In the case of Duke Energy, one gets the distinct impression that the ever-mushrooming Charlotte-based monopoly will simply absorb North Carolina state government at some point and turn it into its Raleigh branch.

Fortunately, some intrepid consumer advocates are still giving Duke heck for the heck it continually visits upon residential ratepayers and our ever-more-fragile natural environment. Here’s their press statement from earlier this week on the occasion of a public hearing in Charlotte (the actual Utilities Commission proceedings begin Monday July 8 here in Raleigh — be on the lookout for more information):

Broad Coalition of Ratepayers Calls for Rejection of Duke Energy Rate Hike
Rate case opposed for environmental, social justice and financial reasons

Charlotte, NC.  A broad coalition of organizations and dissatisfied ratepayers will gather this evening at the Mecklenburg County Courthouse to call on the North Carolina Utilities Commission to reject the proposed Duke Energy rate hike and a settlement proposed by the Commission’s Public Staff. The coalition’s opposition is based on environmental, social justice and financial reasons. Read More

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The closed-door decision by the NC Utilities Commission (NCUC) and the Public Staff to end its investigation into the Duke-Progress merger in exchange for a handful of restrained conditions is another missed opportunity by state regulators to protect NC consumers.

The Commission must vote on the proposal on Monday which includes conditions such as shuffling of staff and board members, concretizing Jim Rogers’ already planned 2013 retirement and throwing a few bones to consumers and low-income customers. It’s mind-boggling to think how little has come from the merger investigation. Read More

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The following was released this morning by the good people at NC WARN:

Internal Document Indicates Duke Energy Hid Damning News on Broken Nuclear Plant before Merger with Progress Energy was Approved
Johnson memo to his board members strongly suggests Duke misled regulators in various states; NC WARN says this bolsters legal case to reopen merger hearings

Durham, NC – An April memo from ousted CEO Bill Johnson appears to confirm long-running concerns by a watchdog group that Duke Energy hid vital information from regulators in several states prior to the July closing of the utility’s controversial takeover of Progress Energy. NC WARN today filed the document with the NC Utilities Commission in support of the group’s case that merger hearings must be reopened to determine if billions of dollars in hidden costs offset the very savings to the public that are required of such a utility merger.

Read the entire release by clicking here.

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There are at least a couple of thoughts that occur this morning in wake of the latest news about Duke Energy’s acquisition of (sorry, merger with) Progress Energy (née CP&L):

#1 – While some in the mainstream news media (and the Utilities Commission Public Staff) seem surprised that former progress chief Bill Johnson (right) has now been muscled out of the way and given a platinum parachute by the big Monopoly game winner Jim Rogers (left), my first reaction was: How could you not see this coming? Fat cat, empire-building CEO’s like Rogers are not about sharing power; they’re about winning it and grabbing more. The bottom line here is that Rogers came to this game with more weapons and almost certainly always intended to emerge “victorious.” All the public talk about cooperation and merger were almost certainly p.r. bull.

#2- And as for Johnson, Read More