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Wednesday, 07 October 2009 15:31

Duke’s rate hike request is poorly timed, not needed

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The state should turn down Duke Energy’s request for a nearly 13 percent hike in utility rates and instead encourage the giant utility to do a better job with the revenues and power-creation capacity it already owns.

There are several good reasons to turn down the request, but perhaps most relevant is the state of the nation’s economy and the utility’s dogged pursuit of more electricity customers and more business at a time when nearly everyone is searching for ways to cut their energy usage. Instead of building additional capacity and seeking new customers, Duke should be modernizing its system, spending more on green energy, and encouraging the public to make use of every energy savings technology that exists.

The proposed rate hike includes a 13.5 percent residential hike increase and a 4.8 percent increase for fuel costs, meaning families served by the utility would see an 18 percent jump in their power bills in 2010. Duke says it needs the money to modernize equipment, help pay for the new Cliffside coal plant and to help service its debt load.

But there are problems with the request, and nearly all of them came up at a public hearing before the Utilities Commission that was held Sept. 22 in Franklin. The overwhelming opinion at that meeting —including that from the Public Staff, a part of the Utilities Commission that represents consumers — was against allowing Duke to implement the increase.

According to Duke, it sold 2 percent less power in 2008 than in 2007 to its North Carolina customers, and company projections are that electricity use will continue to decline. Many would see that as a good sign that we are becoming more energy efficient and that the greenhouse gases associated with burning coal for electricity are in decline. Duke, however, is seeking to expand its business to new areas in South Carolina.

It has already agreed to sell wholesale power to five co-ops, a decision that prompted South Carolina’s state-owned Santee Cooper utility to scrap plans for a new coal plant in the Florence area. North Carolina regulators say Duke’s phased plan for selling power to the co-ops should protect this state’s consumers from rate hikes linked to the sale, but Duke critics argue that the South Carolina deal comes at the expense of people in this state. When Duke is asking for a rate increase to help build a new plant in North Carolina at the same time energy usage here is decreasing, the link to the selling of power to South Carolina is hard to overlook.

Of course there’s also the issue of the Cliffside plant in and of itself. Building dirty, polluting coal-fired power plants is simply out of step with today’s consumers.

Of course, the timing of the rate hike request could not be worse. Unemployment is at 9.8 percent nationally, foreclosures are still occurring at an alarming rate, and many of those who have jobs have taken pay cuts or a reduction in hours. Duke wants to prepare for the future, but at this time almost every business in the country is hunkering down and trying to hold on. It’s the wrong time to push a rate hike on families, small business, industry and local governments.

No matter how you spin this proposal, it doesn’t look any better. The Utilities Commission needs to tell Duke Energy that the proposed rate hike is a bad idea that it won’t approve.

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