Duke Energy has agreed to a rate hike of 6 percent for its customers in South Carolina, which is much less than the 15 percent it originally wanted.
For residential customers, that means a 7 percent hike– an average increase of about $6.24 per month for homeowners– if it’s approved by the state Public Service Commission. For commercial and industrial customers, that hike would be a little over 5 percent.
The state Office of Regulatory Staff had objected to the original request and helped negotiate the lower hike. Executive Director C. Dukes Scott said the agency combed through the power company’s books to find unnecessary reasons behind the original request.
He said Duke Energy was asking for an 11.5 percent return on equity, while ORS thought a 10.5 percent return was more reasonable. That was roughly a $33 million difference. Another reason for the higher request was that Duke had lowered its revenue by $47 million during its test period due to “abnormal weather,” which the agency does not allow.
Some of the other disallowed costs included charitable contributions, country club dues, and airplane travel. The agreement also requires shareholders to play a larger role in employees’ bonuses, rather than ratepayers.
Overall, Scott said the new hike is much more reasonable. “We’re talking about (a) $6.24 (increase) versus $15,” Scott said, “It’s substantially less than half.”
Two other parties that also objected to the original 15 percent hike were still not on board with the new arrangement. Wal-Mart and the South Carolina Energy Users Committee (a manufacturers group) were not yet satisfied with Duke’s concessions, Scott said.
Duke has agreed to a 7.2 percent hike in North Carolina, where it also wanted a 15 percent increase originally.