New rates approved for Duke Energy Carolinas customers in South Carolina

Rhea-AI Summary

The Public Service Commission of South Carolina (PSCSC) has approved new customer rates for Duke Energy Carolinas, effective August 1, 2024. Residential customers can expect an 8.7% increase ($12.06/month), with further 4.3% hike ($6.42/month) in August 2026. Commercial and industrial rates will also rise by 4.6% and 4.4%, respectively. The rate changes reflect investments in system reliability and diversity, and the return of tax benefits due to the Federal Tax Cuts and Jobs Act of 2017. The settlement, agreed upon with various consumer and environmental groups, includes a $2 million shareholder-funded study to explore low-income customer support programs. The PSCSC approved recovery of investments in natural gas, nuclear, solar, and hydroelectric units. The agreement sets the return on equity at 9.94% and an equity component of 51.21%. The only unapproved provision was for environmental compliance costs.

Positive

• PSCSC approved rate increases to enhance system reliability and diversify energy sources.
• Residential rates remain below the national average despite an 8.7% rise in August 2024 and an additional 4.3% in August 2026.
• Commercial and industrial rates will increase by 4.6% and 4.4% respectively.
• Settlement includes a $2 million study to support low-income customers.
• Return on equity set at 9.94%, equity component at 51.21%.

Negative

• Residential customers face an 8.7% rate hike in August 2024, followed by a 4.3% increase in August 2026.
• Commercial and industrial customers will see rate increases of 4.6% and 4.4% respectively.
• Only partial recovery of environmental compliance costs approved by the PSCSC.

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• Public Service Commission of South Carolina approves nearly all components of a settlement agreement
• Outcome supports company's efforts to increase system reliability, diversityand enhance the customer experience while keeping rates below national average

GREENVILLE, S.C., July 8, 2024 /PRNewswire/ -- The Public Service Commission of South Carolina (PSCSC) has approved new customer rates based on a settlement agreement with almost all parties in the Duke Energy Carolinas rate review request filed with the commission in January of this year.

The changes in customer rates – which remain below the national average – come after a lengthy and very public process evaluating a request to recover investments made to increase system diversity and reliability, enhance the customer experience and meet future energy demands for nearly 660,000 customers primarily in the Upstate region of South Carolina. 

The agreement with almost all parties, including certain consumer, environmental and industrial groups in South Carolina, was submitted in May. The agreement was reached with the South Carolina Office of Regulatory Staff, the South Carolina Energy Users Committee, Southern Alliance for Clean Energy, Coastal Conservation League, Vote Solar, and the South Carolina Small Business Chamber of Commerce. While not signatories to the agreement, both Walmart and CMC Recycling did not object to approval of the agreement.

Rate impacts

Beginning Aug. 1, 2024, a typical residential customer using 1,000 kilowatt hours will see an increase of about 8.7% or $12.06 per month. Beginning Aug. 1, 2026, residential rates will increase another 4.3% resulting in an additional $6.42 per month for a typical residential customer using 1,000 kilowatt hours.

Beginning Aug. 1, 2024, commercial and industrial customers will see an average increase of around 4.6% and 4.4%, respectively (actual rates vary by customer class and size).

The net increase reflects the company's proposal to mitigate the requested rate increase by accelerating over two years the return of excess deferred income tax benefits resulting from the Federal Tax Cuts and Jobs Act of 2017 ("Tax Act"). This reduction would expire after two years.

Provisions of the settlement agreement approved by the PSCSC include recovery of new investments in highly efficient natural gas, nuclear, solar and hydroelectric units, as well as recovery of the company's significant investments in the grid and its new corporate headquarters. The order also allows the company to establish rates based upon a return on equity of 9.94% and an equity component of the capital structure of 51.21%, as agreed to in the settlement. The final order revised recovery of certain environmental compliance costs, the only provision of the settlement agreement not fully approved by the PSCSC.

Providing support for customers

The PSCSC also approved – at shareholder expense – $2 million to perform a study and convene a collaborative of stakeholders to evaluate a broad spectrum of regulatory programs and protections for low-income customers, ranging from affordability programs, potential new tariffs, and other initiatives focused on enhancing assistance for low-income customers; and to help low-income customers complete health and safety repairs, which will allow for an increase in customer participation in programs that enable energy savings, such as the South Carolina Local Weatherization Assistance Program.

Duke Energy has numerous current and proposed energy efficiency programs available to customers who would like to exercise more control over their usage to lower their bills, which could help minimize the impact of the requested increase. Customers struggling to pay their energy bills might also qualify for assistance from various government and nonprofit programs for utility bills and other household expenses. Duke Energy also offers programs and resources to help customers manage their usage to lessen the impact of rate changes, as well as flexible payment arrangements to help customers experiencing uncertainty. Additional customer support is available through the Share the Light Fund, a Duke Energy program that provides energy assistance.

To learn more about these programs, visit duke-energy.com/summersavings.

Duke Energy Carolinas

Duke Energy Carolinas, a subsidiary of Duke Energy, owns 20,700 megawatts of energy capacity, supplying electricity to 2.9 million residential, commercial and industrial customers across a 24,000-square-mile service area in North Carolina and South Carolina.

Duke Energy

Duke Energy (NYSE: DUK), a Fortune 150 company headquartered in Charlotte, N.C., is one of America's largest energy holding companies. The company's electric utilities serve 8.4 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and collectively own 54,800 megawatts of energy capacity. Its natural gas unit serves 1.7 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky.

Duke Energy is executing an ambitious clean energy transition, keeping reliability, affordability and accessibility at the forefront as the company works toward net-zero methane emissions from its natural gas business by 2030 and net-zero carbon emissions from electricity generation by 2050. The company is investing in major electric grid upgrades and cleaner generation, including expanded energy storage, renewables, natural gas and advanced nuclear.

More information is available at duke-energy.com and the Duke Energy News Center. Follow Duke Energy on Twitter, LinkedIn, Instagram and Facebook, and visit illumination for stories about the people and innovations powering our energy transition.

24-Hour media line: 800.559.3853

 

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SOURCE Duke Energy

FAQ

When will Duke Energy Carolinas' new rates take effect for residential customers?

The new rates will take effect on August 1, 2024.

How much will residential rates increase for Duke Energy customers in South Carolina?

Residential rates will increase by 8.7% ($12.06/month) in August 2024, and by an additional 4.3% ($6.42/month) in August 2026.

What is the impact on commercial and industrial rates for Duke Energy Carolinas customers?

Commercial rates will increase by 4.6% and industrial rates by 4.4% on average.

What investments will Duke Energy recover through the new rates?

Investments in natural gas, nuclear, solar, and hydroelectric units, as well as grid upgrades and a new corporate headquarters.

What is the return on equity approved for Duke Energy Carolinas?

The return on equity is set at 9.94%.

What is the equity component of capital structure for Duke Energy Carolinas?

The equity component is set at 51.21%.

What provisions were not approved by the PSCSC for Duke Energy Carolinas?

The only provision not fully approved was the recovery of certain environmental compliance costs.

What support is being provided for low-income customers by Duke Energy?

A $2 million study funded by shareholders to evaluate regulatory programs and protections for low-income customers.