Duke Energy Progress Reveals Retail Rate Reduction in Tar Heel State

Duke Energy Progress customers in the Tar Heel State will have more disposable income this holiday season, as fuel costs will decrease effective December 1, following approval by the North Carolina Utilities Commission (Docket No. E-2, SUB 1023).

Overall energy costs will drop by about 6.5 percent for residential customers, 7.2 percent for commercial customers, and 7 percent for industrial customers.

The charge for a typical residential customer using 1,000 kilowatt-hours (kWh) of electricity will decrease from $110.04 to $103.23 per month – a savings of $6.81, the utility announced on November 29.

"We work around the clock to bring our customers reliable electricity at affordable rates," said Duke Energy President-North Carolina David Fountain, adding, "Through our generation operations and fuel procurement practices, we have delivered more than $722 million in fuel and joint dispatch merger savings to our customers since 2012."

What's driving customer savings

Duke Energy said it maintains lower fuel and fuel-related rates through expertise in operating a diverse generation portfolio of nuclear, coal, natural gas, and hydro; efficiency improvements that led to higher capacity factors in the nuclear fleet; and fuel procurement strategies that mitigate volatility in supply costs.

Other key reasons for the overall decrease cited by the utility include:

• A decrease in the prior period true-up of fuel costs, as compared to the prior period true-up included in the current bill; and
• Total fuel costs are declining due to a drop in commodity prices.

Duke Energy Progress makes a fuel cost recovery filing annually in North Carolina. The fuel rate is based on the projected cost of fuel used to provide electric service to the company's customers, plus a true-up of the prior year's projection.

The commission reviews fuel costs and adjusts the fuel component of customer rates accordingly. By law, the company makes no profit from the fuel component of rates.

The lower rates reflect annual adjustments to charges for fuel, compliance with the state's renewable energy portfolio standard (REPS), and the Joint Agency Asset Rider (JAAR) as approved by the North Carolina Utilities Commission (NCUC).

Changes in January

However, Duke Energy Progress rates will adjust again on January 1, due to charges related to implementing programs to help reduce energy consumption and save customers money on their energy bills.

Residential customers using 1,000 kWh/month will see an increase of $1.47per on their bills, which also accounts for a pending lower state income tax.

The utility maintains that its energy efficiency and demand side management charges are increasing, primarily due to new program offerings, more customer participation, and a reduction in the recovery period for non-residential program costs from 10 to three years.

The net effect of all adjustments is a monthly saving of $5.34 for the typical residential customer. In the new year, overall customer rates will decrease about 5.1 percent for residential customers, 6.7 percent for commercial customers and 6.8 percent for industrial customers.

Duke Energy Progress serves about approximately 1.5 million customers in a 32,000-square-mile service area of North Carolina and South Carolina.