RALEIGH, N.C. (AP) -- North Carolina's Attorney General Roy Cooper said Friday he would challenge an electricity rate increase taking effect Saturday that will cost the average home an extra $88 a year.
The North Carolina Utilities Commission decided Thursday to approve a 7.5 percent average increase in power costs over two years for about 1.3 million customers of the former Progress Energy. The electricity provider for much of eastern North Carolina and the city of Asheville is now a subsidiary of Charlotte-based Duke Energy Corp., the country's largest electricity company.
The rate increase will cost consumers an extra $326 million over the next two years. The greatest increase for the hike taking effect Saturday will fall on residential customers, who will see a 6.5 percent average increase this year while some large customers see rates increase by 2.7 percent. Costs would rise again in June 2014 for all customer categories.
"This order puts utility profits ahead of people," Cooper said in a statement. "It talks about how much consumers are hurting but sticks them with higher rates anyway."
Cooper previously won a similar appeal to the state Supreme Court, which ruled in April that the utilities commission must reconsider a 7.2 percent rate increase granted to Duke Energy Carolinas in January 2012. The court ruled the commission should take into account the impact of increasing power costs by an extra $309 million a year on 1.8 million customers served by the utility in a territory ranging from Durham through western North Carolina.
That rate increase remains in effect.
The utilities commission said though it recognized the rate increase it approved Thursday would hit some customers, setting rates too low would hamper the delivery of "safe, adequate and reliable electric service."
Duke Energy, the corporate parent of both Duke Energy Carolinas and Duke Energy Progress, defended the rate increase that allows Duke Energy Progress a 10 percent profit margin as it recovers some of the $11 billion invested since its last rate increase in 1987. The rate increase negotiated with the utilities regulator's Public Staff, which represents consumers, was a good compromise, the parent company said in a statement Friday.
"Duke Energy Progress has made sizable investments to ensure that customers receive electricity that's affordable and reliable, and increasingly clean in terms of how it's generated," a company statement said. "Modernizing Duke Energy Progress' power plant fleet is an important investment in North Carolina's environment and economic future."
The utility also won the right to pass along to rate-payers its costs of stockpiling coal. Duke Energy Progress is allowed to pass on costs of holding a coal inventory greater than what it needs to supply coal-burning power plants for 40 days. The company said the coal is backing up because it's using more lower-priced natural gas. The coal-inventory add-on ends after Nov. 30, 2014, unless the company gets an extension.
Duke Energy Carolinas is seeking a further rate increase that is scheduled for a hearing before the utilities commission on July 8. The utility subsidiary is seeking a 9.7 percent average rate increase that could go in effect in September if regulators approve, though
Duke Energy Corp serves 7.2 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky.
Emery Dalesio can be reached at https://twitter.com/emerydalesio