“RALEIGH – Attorney General Jeff Jackson is fighting Duke Energy Carolinas’ (Duke or DEC) proposed rate increase. If approved, the increase would cost ratepayers nearly $1.4 billion in unnecessary rate hikes over the next two years.
In expert testimony filed Friday with the North Carolina Utilities Commission, Attorney General Jackson argues that customers should not have to pay for a return on equity as high as the 10.95 percent Duke is asking for, and that setting it at an acceptable level would save North Carolina families nearly $1.4 billion over the next two years. He also argues that Duke should be required to create a separate rate class for data centers and other customers that reflect the strain they put on North Carolina’s power grid…
“The pricing proposed by DEC in this case significantly exceeds general inflation levels and is likely to exacerbate affordability issues at a time when customers are already struggling,” said Edward Burgess in his testimony as an expert witness for the North Carolina Attorney General’s Office…
From testimony of Daniel Cassara, energy expert witness for the North Carolina Attorney General’s Office:
“The increased returns that DEC is requesting come on the heels of earning $2.1 billion in net income, an 11.22 percent book return on equity, in 2025. This makes DEC one of the most profitable utilities in the country… It strains credulity to believe that hundreds of millions of dollars in additional profits are needed to attract capital and maintain credit for one of the most profitable and well-resourced utilities in the country.” (pages 121-122)
“An ROE of 7.4 percent would meet DEC’s cost of equity, enabling the company to attract needed capital and providing investors with an opportunity to make a fair return, while also saving DEC’s retail ratepayers from substantial rate increases.” (page 121)…
From testimony of Justin Brant, energy expert witness for the North Carolina Attorney General’s Office:
“DEC’s approach shifts significant costs and risks onto other ratepayers and gives DEC significant discretion to negotiate terms with prospective large load customers without appropriate review by the Commission.” (page 12)
“The large load customers currently proposed and under construction represent new loads of unprecedented size that require unprecedented system upgrades to serve. The cost allocation paradigm that has been in use for 100 years was not designed to accommodate such large and unprecedented load growth. The size and scale of data centers create new risks and mean that frameworks that have worked well to create fair cost allocation outcomes in the past will not necessarily work as well in the future.” (page 14)
“It can take 10 or more years for other customers to start benefiting from large load additions. This lag means that other ratepayers could see a decade of increased prices before seeing potential benefits from large loads assuming those benefits materialize.” (page 21)
“The ability to allow large customers to rely on their own resources is a significant offering… because it will create a pathway to dramatically reduce cost shifting from large customers to other customers, while reducing the need for transmission and generation buildout.” (page 63)”