06/08/2026
From Jeff Jackson about Duke rate hikes
A few days ago, I told you about our new case to stop the 15% rate increase Duke Energy is proposing. The interest was huge, so here’s some more detail:
- Duke Energy Carolinas - which serves mainly central and western NC - is asking permission to raise rates by about 15%, to begin early next year. (Note: Duke Energy Progress serves mainly eastern NC.)
- It has to ask permission because it’s a monopoly. That’s how our state law is written. Duke gets to be a monopoly, but the check on their power is that rates are set by our Utilities Commission.
- The Commission has five members. Two are appointed by the Governor, one by the State Treasurer, and two on the recommendations of the Speaker of the House and the Senate President Pro Tempore. All must be confirmed by the General Assembly.
- Our law says rates must be "fair both to the public utilities and to the consumer." It uses a rough formula that takes into account the value of the utility’s property, its expenses, its revenue, and a “fair return for its shareholders.”
- What constitutes a “fair return for its shareholders” is open to debate, but our law goes into some detail: “[E]nable the public utility by sound management to produce a fair return for its shareholders, considering changing economic conditions…, to maintain its facilities and services in accordance with the reasonable requirements of its customers in the territory covered by its franchise, and to compete in the market for capital funds on terms that are reasonable and that are fair to its customers and to its existing investors.”
- Currently, the Commission has set Duke Energy Carolinas rate of return for shareholders at 10.1%. At that rate, DEC brought in over $2b in net income last year.
- Part of Duke’s new request is to increase its shareholder return to 10.95%.
- Our request is to lower its shareholder return to 7.4%. Our review shows this is sufficient for Duke to meet its needs to invest in the build-out that energy demand requires. Our number would also save affected NC families a couple hundred dollars a year.
- Finally, on data centers: the framework utilities have used for 100 years wasn't built for single customers that show up needing hundreds of megawatts at once. The core question is who pays when one giant customer requires major new generation and transmission. Our position is that families and small businesses shouldn't be the backstop for those costs. So we've asked for very large users, like data centers, to have their own rate class, with protections built around how much energy they use. Things like: sign a long-term contract, at least 15 years, so they can't trigger a huge buildout and then leave town; put money down up front, like a deposit, in case the project falls through; cover the costs if they exit early instead of handing them to you; create an option for these customers to build their own generation; and power down when the grid is stretched during peak demand period, including weather emergencies.
The process going forward involves hearings before the Utilities Commission. They begin July 7th, then the parties file briefs and the Commission issues its decision, which we expect later this year.
We’ve submitted 700 pages worth of testimony, so we’re making a highly detailed case.
That’s a quick summary. I’ll keep you posted.
AG Jeff Jackson
