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Understanding Duke Energy’s Rate Increases in North Carolina

Duke Energy is one of the largest electric power holding companies in the United States, providing service to over 8 million customers across 6 states. In 2023, the company is implementing rate increases for its customers in North Carolina, as approved by the North Carolina Utilities Commission (NCUC).

As an electrical service provider, I want to help Duke Energy customers understand these upcoming rate changes, the reasons behind them, and how it will impact monthly bills.

Overview of the Duke Energy Rate Increases in NC

Here are the key details on the Duke Energy rate increases going into effect in 2023:

  • Effective October 1, 2023: There will be a monthly increase of $8.04 for a typical residential customer using 1,000 kWh per month. This will raise the monthly bill from $144.12 to $152.16.
  • Effective October 1, 2024: There will be an additional increase of $4.67 per month.
  • Effective October 1, 2025: There will be another increase of $5.15 per month.
  • Total increase by late 2025: The total rate increase will be $17.86 per month for a typical residential customer using 1,000 kWh.

It’s important to note that even with these rate increases, Duke Energy’s rates for North Carolina customers will remain below the national average.

Why Are the Rates Increasing?

There are a few key reasons why Duke Energy is implementing these rate increases in North Carolina:

  • Infrastructure investments – Duke Energy has invested over $3 billion since its last rate increase in 2019 to strengthen its electric grid against severe storms and reduce outage times. These investments help improve reliability for customers.
  • Advancing clean energy – The rate increases will help fund Duke Energy’s transition away from coal plants towards lower emission sources like natural gas and renewables. This supports North Carolina’s clean energy goals.
  • Covering operating costs – The rate increases account for Duke Energy’s costs to operate and maintain the electric system. Even with internal cost-cutting, Duke Energy still needs to raise rates periodically to keep pace with expenses.

Essentially, the rate increases allow Duke Energy to continue modernizing infrastructure, transitioning to cleaner energy, and covering the costs to reliably serve customers throughout North Carolina.

How Will Monthly Bills be Impacted?

To understand how these rate increases will impact monthly bills, let’s look at the breakdown for a typical residential customer using 1,000 kWh of electricity per month:

Current monthly bill (pre-increase): $144.12

  • October 1, 2023: Increase of $8.04, for a new total of $152.16
  • October 1, 2024: Additional increase of $4.67, for a new total of $156.83
  • October 1, 2025: Additional increase of $5.15, for a new total of $161.98

Total bill increase by late 2025: $17.86 per month

While certainly not a negligible increase, it is being phased in gradually over 3 years to try and limit the impact. According to Duke Energy, even with these increases, rates in North Carolina will remain below the national average.

For reference, the national average monthly bill for residential customers as of January 1, 2023 was $171.67.

Programs to Help Offset Rate Increases

Along with the rate increases, Duke Energy is implementing new programs to help offset costs for customers:

  • New time-of-use rate options – These rates incentivize shifting electricity usage to low-demand periods, which can help save money.
  • On-bill financing for energy efficiency – Customers can pay for upgrades like HVAC replacements over time through their Duke Energy bill, allowing them to keep annual savings greater than the monthly cost.
  • Energy efficiency incentives – Rebates and incentives are available for measures like weatherization that can reduce energy consumption and costs.
  • Assistance for income-qualified customers – Duke offers programs like the Share the Light Fund and payment assistance for qualified low-income customers to help lower their bills.

As an electrical service provider, I always encourage customers to explore energy efficiency and financial assistance programs available to help manage energy costs. Duke offers a variety of options for North Carolina customers to help reduce the impact of these rate increases.

How Future Rate Increases Will be Determined

As part of the rate case, Duke Energy agreed to implement performance-based regulation mechanisms for the first time in North Carolina. These measures are intended to limit rate volatility and provide more transparency and accountability around Duke Energy’s rates, investments, and customer costs.

The mechanisms include:

  • Multi-year rate plans – The approved increases are part of a 3-year plan intended to give customers more cost certainty rather than large spikes.
  • Performance incentive metrics – Duke Energy will be measured on metrics like outage response, renewables adoption, and peak energy reduction with financial incentives and penalties.
  • Residential revenue decoupling – Designed to remove any incentive for Duke Energy to encourage greater energy use.

Overall, these performance frameworks will provide much more robust oversight and transparency from regulators around Duke Energy’s customer rates.

Key Takeaways for Duke Energy Customers

For Duke Energy customers in North Carolina, the key points to know about the 2023 rate increases are:

  • Monthly bills will rise gradually over 3 years, starting at $8.04 more in October 2023.
  • Total increase by late 2025 will be $17.86 per month for a typical residential customer.
  • Rates are increasing to fund infrastructure, clean energy, and operating costs.
  • Even with increases, Duke rates in NC will remain below national averages.
  • New programs are available to help offset the rate increases.
  • Future rate changes will be determined under a new performance-based framework.

As an electrical service provider, I hope this overview has helped explain the reasoning for the increases, how monthly bills will be impacted, and the options available to manage costs going forward. Reach out with any other questions!

References

[1] Duke Energy Progress N.C. Rate Review Request. https://www.duke-energy.com/home/billing/dep-nc-rate-case-2022

[2] Duke Energy Progress receives approval for new rates in North Carolina, implements new programs to help customers. https://news.duke-energy.com/releases/duke-energy-progress-receives-approval-for-new-rates-in-north-carolina-implements-new-programs-to-help-customers

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