Duke Energy proposes 15% rate hike, Stein, Jackson object

Gov. Josh Stein opposes Duke Energy’s recent request with the North Carolina Utilities Commission (NCUC) to revise rates at Duke Energy Carolina and Duke Energy Progress, which would include a 15% increase from current revenues. 

Duke Energy filed with NCUC to request an annual revenue increase of $1 billion for Duke Energy Carolinas ($727 million in 2027, and $275 million in 2028), which would mean a 15% increase over current revenues, and $729 million for Duke Energy Progress ($528 million in 2027, $200 million in 2028), a 15.1% increase. Duke Energy’s requests are based on a 10.95% return on equity and 53% equity capital structure; these requests are subject to approval by NCUC.  

“I am pleased that the North Carolina Department of Justice is fighting for the people of North Carolina,” said Stein in a press release. “Duke Energy’s proposed rate hike is simply too high and comes as the company is also retreating on more affordable clean energy. At a time when families are struggling to make ends meet, we should be doing everything we can to make life more affordable, not less. I will continue to fight on behalf of every North Carolinian to lower costs and grow the economy.”  

During a recent press conference, Stein highlighted data centers as one of the facilities that consume a tremendous amount of energy. Stein’s newly formed council on energy policy will be taking a close look at data centers. 

“Data centers suck up an incredible amount of energy, and energy costs are too high; as they are, they’re rising,” said Stein. “Duke Energy has just asked for a double-digit rate increase at the Utilities Commission, something that I hope is severely scrutinized and shrunk because electricity is too expensive as it is. We have to take a hard look at the state about what the impact of these data centers is on energy demand and is this the right way that we want to deploy a limited resource, we do not have infinite energy, and so we will have more insight into that question going forward.”

NC Secretary of Commerce Lee Lilley clarified that data centers are not typical recipients of Job Development Investment Grants (JDIG), as are companies like Toyota and Jet Zero. 

 “Those are not typically offered on a data center project for a variety of different reasons,” said Lilley during the same press conference. “They do qualify for other incentives and, in particular, may qualify for local economic development incentives, particularly around property tax abatement. That’s the decision of a local county, and I think that’s why you’ve seen different local jurisdictions approach data centers in different ways. I’d say thus far, the answer on data centers in North Carolina has really been left to a local decision and a decision about whether or not power is available.” 

Lilley explained that he believes decisions like these will continue to be made at the local county level, while simultaneously balancing the policy question of prioritizing the use of power and who pays the bill for large projects that consume a lot of power. 

“It seems Gov. Stein is starting to learn of the consequences of the Carbon Plan law,” Jon Sanders, director of the Center for Food Power and Life at the John Locke Foundation, told the Carolina Journal. “We have been warning for years that shutting down working, paid-for power plants (coal) and overbuilding expensive, land-intensive, but unreliable renewable facilities that need far more transmission lines built is a recipe for much higher rates. The Public Staff of the North Carolina Utilities Commission testified in 2023 that rates could ‘approximately double‘ before 2030. Strangely, Stein vetoed Senate Bill 266, which was nevertheless passed into law and which eliminated the interim goal of the Carbon Plan law that would have cost ratepayers an additional $13 billion by 2050.”

Sanders explains that if Stein wants to protect rate payers and ensure reliable utility service at the lowest rates possible, he should urge the General Assembly to amend the Carbon Plan law to remove the “carbon neutrality” mandate by 2050 and ensure that the primary focus of energy policy in North Carolina is reliable, low-cost electricity.

New Democratic North Carolina Attorney General Jeff Jackson agreed with his predecessor, Stein.

“With costs rising everywhere, it’s important we take a close look at Duke Energy’s proposed rate increase to ensure it is necessary,” said Jackson in a press release. “My office is intervening to make sure we find the right balance between investing in our energy infrastructure and protecting North Carolinians’ wallets.”

On Nov. 25, Jackson filed separate motions to intervene in the rate hike requests for Duke Energy Progress and Duke Energy Carolinas. Both requests were granted on Dec. 1.

“Duke Energy proposes 15% rate hike, Stein, Jackson object” was originally published on www.carolinajournal.com.