Rate Increases Ahead, Warn Utilities

by | Mar 11, 2013

Companies across the US will likely see their electricity bills rise as utilities spend billions replacing old infrastructure, adding renewable resources and cleaning up aging power plants, Reuters reports.

At the IHS CERAWeek energy conference in Houston, Duke Energy CEO James Rogers cited a recent rate increase sought by one Duke utility to cover the costs of building a new power plant, according to the news agency. Rogers said new, cleaner power plants can reduce CO2 emissions by 18 percent — but customers don’t see this, which can make the rate increases hard to justify.

In late 2012, Duke acquired a 6 MW commercial solar power project located within the University of Arizona’s Science and Technology Park in Tucson, an area dedicated to solar energy.

Also at the IHS CERAWeek energy conference, PG&E CEO Anthony Earley said PG&E’s renewable energy investments will add between 1 percent and 1.5 percent to customers’ utility bills, over and above the inflation rate. Reuters says some of PG&E’s long-term renewables contracts were above $200 per MWh.

These rate increases will happen even as utilities increasingly use natural gas — which is seeing prices near their lowest levels in a decade — to generate electricity.

In late 2012, Kansas City Power & Light received the green light to raise electricity rates slightly to cover its outlay of $40 million over three years for rebates and other energy efficiency incentives. After three years, if it meets at least 70 percent of its conservation goal, the utility would be able to raise rates further to cover revenue lost from the reduced electricity use.


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