Beatrice Lang
Duke Energy has been criticised for its frequent rate hikes, with some claiming that the company is putting profits first. In 2023, Duke Energy announced plans to increase rates by 14.6% over three years in central and western North Carolina. This was not an isolated incident, as the company has a history of seeking rate hikes year after year. In 2024, Duke Energy proposed a rate increase of 16 to 18% in North Carolina, causing concern among families already struggling with rising energy costs. While Duke Energy has defended its actions by citing the need for grid improvements and the adoption of clean energy resources, critics argue that the company is wasting money on unnecessary grid updates and failing to provide reliable and affordable service.
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What You'll Learn
Duke Energy's price hike strategy
Duke Energy has been criticised for its price hike strategy, with accusations that it puts profits first. In 2023, Duke Energy proposed a rate increase of 14.6% over three years in North Carolina, with a 3.3% increase to begin on October 1. This was part of Duke's Grid Improvement Plan, a long-range strategy to upgrade the electric grid.
Duke Energy stated that the extra revenue was necessary to upgrade the electric grid, improve reliability, and prepare for more renewable energy sources to reduce pollution and combat global warming. They also noted that the rate increases would strengthen the electricity grid, improve reliability for customers, and facilitate a transition to a cleaner and more secure energy future.
However, critics argue that Duke Energy is prioritising profits over people, with the rate hikes causing financial hardship for families, especially those with low and fixed incomes. There are also concerns about Duke's over-reliance on fossil fuels, with 75% of the additional revenue going towards bolstering the existing grid.
In response to the criticism, Duke Energy Carolinas has established new time-of-use rate options and energy efficiency programs to help lower customer costs and reduce energy usage. They have also implemented a Customer Assistance Program to reduce bills for vulnerable customers.
Duke Energy has also faced opposition to its rate hike strategy in Florida, where it sought an $820 million increase from the Florida Public Service Commission. This has prompted discussions about allowing competition in the energy market to provide customers with more cost-saving options.
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Customer Assistance Program
Duke Energy has been criticised for its proposal to increase energy bills by 16 to 18% for its North Carolina customers. This is in addition to a 14.6% increase in rates over three years in central and western North Carolina. The company has justified this by stating that it needs the extra revenue to upgrade the electric grid, improve reliability, and prepare for more renewable energy. However, critics argue that Duke Energy is putting profits first and not focusing on affordable and reliable energy solutions.
In response to these rate increases, Duke Energy has introduced a Customer Assistance Program (CAP) to provide support to low-income customers. The CAP offers credits to customers who are approved for the Low-Income Energy Assistance Program (LIEAP) or the Crisis Intervention Program (CIP). The credit amount can lower a bill to the $14 Basic Customer Charge, and qualified customers can receive up to $400 in immediate crisis assistance from January through March, as well as an account subsidy during peak heating and cooling months.
To be eligible for the CAP, customers must first apply for the LIEAP or CIP through their local Department of Social Services. Once approved, the credit will be automatically applied to their Duke Energy bill. The CAP is available to all customers deemed eligible for the LIEAP or CIP for their Duke Energy electric bills by the North Carolina Department of Health and Human Services.
The new Customer Assistance Program was developed through discussions between Duke Energy, the Utilities Commission consumer advocates, and environmental and social justice groups. It is a response to the growing concerns about the impact of rate increases on customers, especially those struggling with rising energy costs.
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Performance-based regulation
Duke Energy, a subsidiary of Duke Energy Progress, supplies electricity to 1.7 million customers across a 29,000-square-mile service area in North Carolina. In December 2023, Duke Energy announced a three-year, 14.6% rate hike for its customers in central and western North Carolina, following a similar 11.3% rate hike for its customers in eastern North Carolina and the Asheville area in August 2023.
The rate hikes are part of Duke's Grid Improvement Plan, a long-range plan to upgrade the electric grid. The North Carolina Utilities Commission (NCUC) has ordered Duke to spread the cost of this plan over 18 years, rather than the three years that Duke initially requested. The NCUC's order also includes a new system of performance-based regulation, which will allow Duke to earn additional revenue through higher rates if it meets certain targets set by regulators for reliability, customer service, clean energy, and other measures.
While some have criticized the rate hikes as putting profits first, Duke Energy has responded that the increases are necessary to strengthen the electricity grid, improve reliability, and facilitate a cleaner and more secure energy future. The company has also been applauded for its collaboration with various stakeholders to develop innovative rate designs and structures, including programs to assist low-income customers and spur economic development.
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$9.99
Residential decoupling
Duke Energy has been granted permission to raise electricity prices in North Carolina. The price hike is expected to be around 14.6% over three years, with the first-year increase of 3.3% effective from October 1, 2023. Duke Energy has justified this increase by stating that the additional revenue is necessary to upgrade the electric grid, enhance reliability, and facilitate the transition to cleaner energy sources.
Furthermore, residential decoupling accounts for weather fluctuations that can impact Liberty's revenue. It allows the company to apply a charge or credit to customers' bills, known as the "Normal Weather Adjustment," to compensate for deviations from typical weather conditions during the billing cycle. This adjustment ensures that the revenue collected matches the company's predictions, mitigating the impact of abnormal weather on their budget.
While residential decoupling provides Duke Energy with the means to adjust rates, it does not guarantee profitability. The company must still make prudent business decisions and control costs to remain profitable, with their practices being reviewed and regulated by the Commission.
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Duke Energy's Grid Improvement Plan
Duke Energy has been working on a Grid Improvement Plan, which involves raising electricity prices. The company has faced criticism for its plan to increase rates by 14.6% over three years in central and western North Carolina. This increase has been approved, with the first-year increase of 3.3% taking effect on October 1.
Duke Energy has justified the rate hike by stating that the additional revenue is necessary to upgrade the electric grid, enhance reliability, and facilitate the transition to cleaner energy sources. The company's press release described the order as "constructive," and it highlighted the investments made to strengthen the electricity grid and improve reliability.
However, critics argue that Duke Energy is prioritizing profits over fair rates for customers. David Neal, a lawyer with the Southern Environmental Law Center, expressed concern about the impact of rate increases on North Carolinians. He suggested that Duke Energy should focus on local energy generation and management solutions, such as rooftop solar and battery storage, instead of costly and unnecessary grid updates.
Additionally, Duke Energy Florida is implementing measures to strengthen the grid and increase resiliency ahead of the 2024 hurricane season. This includes upgrading poles and wires, installing underground cables in outage-prone areas, and utilizing self-healing and automated restoration technologies to minimize power outages during storms. The company also has a comprehensive storm response plan, with a dedicated team and strategic placement of resources to ensure quick response times.
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Frequently asked questions
Yes, Duke Energy has raised electricity prices.
Duke Energy raised electricity prices in North Carolina and Florida.
Duke Energy raised electricity prices to cover the rising costs of gas and coal, and to pay for executive salary raises.
In North Carolina, Duke Energy rates will climb by 14.6% over 3 years. In Florida, Duke Energy initially proposed an $820 million increase but settled for $727 million.
Duke Energy Carolinas has established new time-of-use rate options and energy efficiency programs to help lower customers' costs and reduce energy use.
