Duke Energy Progress rates in North Carolina to decrease Dec. 1 due to lower fuel costs

CHARLOTTE, N.C., Nov. 23, 2015 /PRNewswire/ -- Duke Energy Progress customers in North Carolina will see a decrease in overall rates effective Dec. 1, 2015. The lower rates reflect annual adjustments to charges for fuel, compliance with the state's renewable energy portfolio standard (REPS) and a new Joint Agency Asset Rider as approved by the N.C. Utilities Commission (NCUC).

Delivering fuel charge savings

Total fuel costs projected for the upcoming year are declining due to a drop in commodity prices. In addition, a decrease in the prior period true up served to further lower the fuel charge.

By law, the company makes no profit from the fuel component of rates. 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.

Fuel charges for residential customers decreased by 0.564 cents per kilowatt hour (kWh), or $5.64 cents for a typical residential customer using 1,000 kWh of electricity per month. 

Acquiring generation assets

The NCUC has also authorized Duke Energy Progress to recover costs associated with the utility's purchase of the North Carolina Eastern Municipal Power Agency's (NCEMPA) ownership interest in several Duke Energy Progress generating plants.

The impact of the charge, known as the Joint Agency Asset Rider, on residential rates is an increase of 0.183 cents per kWh or $1.83 per month for a 1,000 kWh residential bill. The impact on other customers varies based upon their rate schedule. The rate increase is partially offset by reduced fuel costs reflected in the approved fuel rates.

Meeting increased compliance obligations

Duke Energy Progress filed for an increase in the charge to customers for the utility's compliance with the state's renewable energy portfolio standard. As approved, the REPS charge will increase $0.34 per month for residential customers, $0.55 per month for commercial customers and $36.30 per month for industrial customers.

The increase to the REPS charge reflects increases in actual and projected compliance costs driven by the increase in the utility's overall compliance obligation. The REPS requirement increases from 3 percent of North Carolina retail sales in 2014 to 6 percent of North Carolina retail sales for years 2015-2017, with additional step ups effective in 2018 and 2021.

Managing fuel costs

The NCUC also authorized Duke Energy Progress to recover additional costs of carrying coal inventory in excess of a 40-day supply, which was under collected by 0.001 cents per kilowatt hour (kWh) when the Coal Inventory Rider was in effect.

Saving energy and reducing demand

In addition to the Dec. 1 rate changes, Duke Energy Progress also received approval to adjust charges on Jan. 1, 2016, related to implementing programs to help reduce energy consumption and save customers money on their energy bills.

Residential customers using 1,000 kWh of electricity per month will see an increase of $1.95 per month on their bills beginning in January. Even with this increase, overall customer rates will remain lower than during the previous year.

Rates have increased primarily due to increased customer participation and related costs and a reduction in the recovery period for non-residential program costs from 10 to three years.

About Duke Energy Progress
Duke Energy Progress, a subsidiary of Duke Energy DUK, provides electricity and related services to nearly 1.5 million customers in North Carolina and South Carolina. The utility is headquartered in Raleigh, N.C., and serves a territory encompassing more than 34,000 square miles including the cities of Raleigh, Wilmington and Asheville in North Carolina and Florence and Sumter in South Carolina. More information is available at www.duke-energy.com.

Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at: www.duke-energy.com. 

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SOURCE Duke Energy