Duke Energy rate hike allows coal ash costs, less penalty

RALEIGH, N.C. (AP) — North Carolina regulators on Friday denied Duke Energy Corp.’s bid to charge consumers the full cost of closing coal ash waste pits as they assessed a $30 million mismanagement penalty, rejected nearly $10 million in overcharges and told the electricity giant to ask again later as it spends billions for cleanup.

Who pays for cleaning up potentially toxic coal ash was the focal point of the North Carolina Utilities Commission’s decision on how much to increase the electricity rates for customers of Duke Energy’s eastern North Carolina subsidiary. The state’s official utilities consumer advocate, Attorney General Josh Stein and thousands of consumers expressed their opposition to passing the cleanup bill on to consumers, especially after the company pleaded guilty to federal environmental crimes in 2015.

The commission allowed Duke Energy Progress to charge customers $232 million for incurred coal ash costs, spread over five years. That’s what the company spent over 20 months ending last August to excavate and safely store coal ash residues that can contain mercury, arsenic and other toxic chemicals. Nearly $10 million in excessive costs was disallowed on one project.

The company will shoulder a $30 million hit for “pervasive, system-wide shortcomings” in coal ash management, the commission’s order said.

Rather than allowing an additional $129 million a year for future cleanup costs as Duke Energy wanted, the company will have to come back to the commission in the future for separate approval after it has spent the money.

The rate increase the commission said it approved was less than half the $478 million a year Duke Energy Progress requested last June — an amount that would have translated into an average 15 percent hike. The commission also approved raising the basic monthly charge that Duke Energy Progress customers pay by 26 percent to $14. The company requested a 75 percent increase.

The company said Friday that it is working to calculate how much more the commission’s order allows it to charge households, factories and other types of electricity users.

Duke Energy also is asking for a rate increase for customers in its western North Carolina service area.

Hearings for the Duke Energy Carolinas rate increase were supposed to start Tuesday but where postponed until March 5 so all sides could digest Friday’s decision on the Duke Energy Progress rate increase.


Follow Emery P. Dalesio on Twitter at http://twitter.com/emerydalesio.

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