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Wednesday, 13 July 2011 13:01

Duke Energy rate hike: out of necessity or greed?

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A proposal by Duke Energy to hike electricity rates by 17 percent isn’t sitting well with many of the company’s customers in this region, who question why the power giant should be seeking any increase — much less such a large one — during these times of economic hardship.

Because Duke is a public utility, the final say on whether the proposed residential rate increase goes through rests with the N.C. Utilities Commission. If granted, Duke Energy would see a jump in revenue of about $646 million. Customers would see a corresponding increase of about $19 a month or more, based on a 1,000 kilowatt-per-month usage rate.

The company filed a rate case with the Utilities Commission late last week. If approved, the new rates would start around next February.

The rate request also seeks a 14 percent increase for industrial and commercial customers. The average of rate increases for all types of customers is 15 percent, Duke said.

“They can just go electrocute themselves as far as I’m concerned,” a miffed Angela McGregor, of Bryson City, said. “I would like a cost breakdown on exactly what they plan to spend it on.”

In a news release, Duke said it needs the money “mainly to recover expenses that have already been made to comply with state and federal laws and replacement of aging infrastructure necessary to meet customer needs.”

In an email sent generically to “dear southwestern NC community leader,” Duke District Manager Fred Alexander, based in Macon County, noted “no one likes rate increases. But they’re necessary to ensure the availability of affordable, reliable and clean electricity today, and for decades to come.”

That explanation hasn’t deterred leaders in Franklin from passing a resolution opposing the rate increase, with Alderman Bob Scott leading the charge.

“Unfortunately, this is but another example of large business taking liberty with corporate welfare as opposed to those who really need financial help,” he wrote fellow town leaders in an email sent last week. “This rate increase will severely hurt the elderly, the poor and those trying to live on fixed incomes whose incomes have been slammed by corporations that caused the financial mess the nation is in.”

The Macon County Board of Commissioners will likely follow suit, Commissioner Ronnie Beale said. The matter was discussed at a county meeting last week, and appeared to have the unanimous support of the five-member board.

Franklin, which once headquartered for the region the Duke-absorbed Nantahala Power and Light Co., has surfaced in the recent past as an area of heartburn for the power giant.

The last time Duke sought a rate increase, in late 2009, the company faced vocal and sustained opposition at a public hearing held by the utility commission in Franklin.

At the time, Duke claimed the then sought-after 12.6 percent hike was needed to pay for upgrades to power plants and infrastructure across its system, including construction of a controversial new coal plant near Marion. Duke also said the rate hike would help maintain its credit rating.

The Utilities Commission allowed Duke only a 7 percent increase. That increase saw the average customer using 1,000-kilowatt hours per month pay $7.30 more each month.

“They are not giving us anything better for the increases,” said Randy Gogolin of Sylva, who makes his living as a nurseryman through his business, the Garden of Weeden.

Gogolin said that he and his wife would like to go completely power-company free by getting off the grid and becoming fully self-sustainable. This was something they dreamed of doing some 20 years ago after moving here, Gogolin said, “but life hit” and there were kids to be raised.

A rate increase, he said, only provides additional impetus for such a move.

Becca Nestler, who with her husband, Stephen Beltram, own and operate Balsam Gardens in Jackson County, said paying more for electricity would pose a true financial hardship on the farm. The couple, which raises and sells broiler chickens and vegetables, is currently using a walk-in cooler, three refrigerators, an upright cooler and a chest cooler, Nestler said.

“That would be awful,” she said of the proposed rate increase. “It would mean more expense for our farm. It’s hard enough as it is.”

Dave Nestler, her brother, is a woodworker in Sylva who relies some on electric-powered tools. He said while his business could more easily absorb a rate increase than his sister’s farm, he isn’t happy about doling out more dollars unless it truly helped produce cleaner energy.

“But, it’s not,” Nestler said. “It’s just going to be more profit for Duke.”

Chris Dole, a trained chef who currently works in marketing in Sylva, like David Nestler, said he wouldn’t mind paying more if the tradeoff was cleaner energy.

“I just think (a flat increase) is wrong, though,” Dole said.

And Duke is indeed being duplicitous, according to longtime foe Avram Friedman, executive director of the activist clean-air group, the Canary Coalition. Friedman said the rate increase would help pay for its expansion of the controversial Cliffside Coal Plant. Friedman said Duke plans to sell electricity generated at Cliffside across the grid in other states, yet is trying to pay for the new coal plant on the backs of North Carolinians.

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