Duke Energy, N.C. officials reach deal on rate hike. Customer bills to go up 9.5%
Duke Energy Carolinas said Monday it will further reduce its residential rate hike request as part of an agreement reached with the N.C. Public Staff — the state agency representing utility customers.
The utility said the agreement, which requires N.C. Utilities Commission approval, represents an average annual increase of 9.5% over two years for residential customers.
If the utilities commission approves in a decision expected this fall, the new rates would go into effect Jan. 1.
However, state Attorney General Jeff Jackson said Tuesday he will not join the proposed settlement, claiming the proposed rate hikes remain too high for residential ratepayers.
“That is movement in the right direction, but it is still too high," Jackson said. "We are not joining this deal, and we will keep pushing for lower rates.”
Duke Energy Carolinas serves about 2.3 million customers in the Triad, Durham, Charlotte and western N.C.
The breakdown is a 5.9% rate hike in year one and a 3.6% rate the second year.
If approved, monthly electric bills in 2027 for typical Duke Energy Carolinas residential customers using 1,000 kilowatt-hours per month would increase by $6.53 a month — from $157.15 to $163.68. There would be an estimated $4.66 monthly increase beginning on Jan. 1, 2028.
Duke Energy's initial request of 18% to the commission prompted considerable pushback from customers and clean-energy advocates, as well as some industrial customers. On June 14, the utility lowered its request to 11.6%.
The utility estimated with the 11.6% rate hike, there would be an average $9.39 monthly increase in 2027 and average $5.52 in 2028.
Meanwhile, Duke Energy said that when including non-residential customers, the overall average annual increase is 4.3% the first year and 3.1% the second year.
Sara Heilman, clean energy strategist at NC WARN, said the settlement "proves that the corporation routinely demands much higher rates from its captive customers than necessary.
"But the increase is still too high."
The agreement also currently involves Carolina Industrial Group for Fair Utility Rates, Carolina Utility Customers Association, N.C. Sustainable Energy Association, Environmental Defense Fund, Microsoft, Meta and Walmart — which has intervened in several Duke Energy-related regulatory issues.
Duke Energy said in a news release it agreed to another rate reduction "after listening carefully to customer and stakeholder feedback ... that will allow the company to continue building the infrastructure needed to reliably serve North Carolina."
"In light of the cost pressures our customers are facing, along with continued conversations with other stakeholders, we felt we had to do more," said Kendal Bowman, Duke Energy's N.C. president.
"Our duty is to protect reliability at the lowest possible cost, and we believe this agreement achieves that balance."
The utility said Duke Energy shareholders will contribute $10 million to low-income bill assistance and weatherization programs "over and above our existing funding, which will make a real difference for customers who need help the most."
Belews Creek component
Another factor in the lower rate hike is projected reduced customer costs for Belews Creek upgrades due to federal funding.
On June 5, the U.S. Energy Department awarded Duke Energy nearly $96 million in federal grants for critical upgrades at coal-fired plants in North Carolina and Kentucky.
Of that total, the Belews Creek Steam Station received a $34 million grant to extend the plant’s operating life and improve efficiency.
Duke Energy has announced plans for creating as many as six small nuclear reactors on a 1,000-acre property near Belews Creek after considering about 70 potential locations. Duke Energy has applied for a federal early site permit as it continues to evaluate rapidly evolving nuclear technology, such as small modular reactors.
A potential — perhaps primary — customer of the expanded energy capacity Duke Energy is pursuing at Belews Creek could be the developer of a proposed multi-billion-dollar, 5-million-square-foot data center campus in neighboring Walnut Cove.
On July 13, the Stokes County Board of Commissioners voted down 4-1 a six-month moratorium on data center development, despite pleas from an overflow crowd that spilled into the parking lot. The board also voted 3-2 on July 13 to adopt the zoning ordinance changes allowing a data center as an allowed use on the property.
"Duke leaders admitted in a hearing last month that they recruit the very data centers used to justify their massive planned expansion of fossil fuels and nuclear power, which would cause continuous electric rate hikes for years to come," Hellman said.
"It's our governor's responsibility to protect North Carolinians already struggling with soaring power bills by leading efforts to ban Duke Energy's aggressive data center recruiting and publicly demanding a statewide moratorium."
Political response
Gov. Josh Stein could not be reached for immediate comment on the Duke Energy agreement.
Jackson said that even though Duke Energy lowered its proposed profit rate from 10.95% to 9.8%, it remains significantly above the 7.4% recommended by the AG's staff.
At 7.4%, the AG staff estimates it would have saved Duke's customers $1.37 billion over the next two years.
Jackson said he supported Duke Energy's decision to participate in a fast-track process to establish new rules for data centers and other large energy users.
“We need these protections to make sure the costs of serving new data centers do not shift onto families,” Jackson said. “This proposal moves in that direction, but the details will determine whether families are actually protected.”
Rep. Pricey Harrison, D-Guilford, said the lower rate hike "is a move in the right direction, which seems to have come from pushback from Attorney General Jackson and other public interest advocacy groups.
"Our offices have received significant pushback from our constituents concerned about the originally proposed 18% rate hike, especially those on fixed incomes," Harrison said.
"In general, Duke customers would prefer to see investments in clean energy production — the cheapest and quickest to install — rather than more investments in soon to-be-stranded fossil fuel-based energy assets."
'Don't forget low-income customers'
Michelle Carter, clean energy campaigns director of N.C. League of Conservation Voters, said Duke Energy's guaranteed profit is reduced from their original ask of 10.95% to 9.8%.
This agreement "is a step toward addressing the hold Duke Energy has on North Carolina’s energy prices," Carter said.
"One thing we have learned is that greedy Duke Energy was much more concerned about preserving their massive profits than offering fair rates to hard-working, overburdened North Carolinians. They requested twice as much as they ultimately agreed to."
Carter said the settlement "still leaves important matters unresolved, like the specifics of how data centers will pay their fair share."
"As an organization that prioritizes clean, affordable and accessible energy, we firmly believe that data centers and large load customers should pay their fair share and bring clean energy onto our grid.
"We look forward to the prospect of the N.C. Utilities Commission opening a large load docket to protect residents across the state."
Carter added that the settlement does not address Duke’s Customer Assistance Program, which provides credits to low-income residents and is set to expire at the end of the year.
"Low-income customers already struggling to pay their power bills will be left vulnerable with a simultaneous rate hike," Carter said.
"While programs like the Helping Homes Fund are a good start to helping low-income residents lower their bills over time, the utilities commission must provide lasting financial solutions to folks in danger of disconnections.”
