RALEIGH — North Carolina electric power regulators were justified in their decision that previously allowed a Duke Energy subsidiary to raise the bills of average residential customers of the former Progress Energy by $88 per year, the state Supreme Court ruled Wednesday.
With no dissenting opinions, the justices agreed there was enough evidence to demonstrate the state Utilities Commission’s conclusion last year that a specific profit margin for Duke Energy Progress was defensible.
Duke Energy Progress, with 1.3 million customers in much of eastern North Carolina and in Asheville, carried out the two-year rate increase in June 2013 and June 2014, with rates growing on average by 5.5 percent, and by 7.5 percent for homes. The average home saw an increase from $104.06 per month to $111.39, according to Duke Energy.
Attorney General Roy Cooper had appealed the commission’s decision, saying the panel failed to consider in detail the economic impact on customers when authorizing a return on equity of 10.2 percent.
But the court said the commission’s order pointed out the recently high unemployment rate and number of foreclosures, as well as nearly 60 witnesses who said the associated rate increase was not affordable to many customers. The commission also noted Duke Energy Progress would distribute $20 million to help poor customers and for job training, the opinion said.
“We hold that the commission made sufficient findings regarding the impact of changing economic conditions upon customers and that these findings are supported by competent, material, and substantial evidence in view of the entire record,” Associate Justice Barbara Jackson wrote.
Duke Energy, the Charlotte-based corporate parent of Duke Energy Progress, has defended the rate increase as it recovers some of the $11 billion it’s invested since its last general rate increase — separate from fuel cost changes — in 1987.
Duke Energy spokesman Jeff Brooks praised the ruling, saying the commission’s review of the settlement reached with Duke Energy Progress “properly balanced customer interests and fulfilled the requirements of (state) law.”
Cooper said in a release the ruling was disappointing but it “won’t stop us from fighting for utility rates that are fair to consumers.” Two other rate cases are before the Supreme Court involving Duke Energy Carolinas, another Duke Energy subsidiary serving customers in Durham and through western North Carolina.
Both cases are expected before the justices next month.
One involves a 4.5 percent average increase approved last year for two years, growing to a 5.1 percent increase thereafter. The second involves a 7.2 percent rate increase originally approved in 2012 by the commission. Following a Cooper appeal, the Supreme Court told the commission to reconsider the 7.2 percent increase in light of its impact on customers. The commission, however, came to the same conclusion. The increases have already been implemented on Duke Energy Carolinas customers.
“The Supreme Court has agreed with us before on this issue and we hope it will again,” Cooper said.