Justin Brant’s testimony presents an analysis of Duke Energy Carolina’s (DEC) Application to Adjust Retail Base Rates and Performance-Based Regulation (PBR) and Request for an Accounting Order. The testimony:
- Discusses the unprecedented risks large loads present to the electric system;
- Describes DEC’s existing framework and practices related to customers with loads greater than 100 MW
- Presents findings and recommendations regarding large load shift costs and the impact on ratepayers
Additionally, CEG experts Ed Burgess and Dan Cassara provided testimony regarding DEC’s MYRP framework, cost of service study (COSS), and requested return on equity (ROE). Ed Burgess’s testimony recommends adjustments to the proposed MYRP framework to contain costs and increase affordability for DEC customers, and recommends several COSS methodologies to reduce inequitable cost-shifting between customer classes and produce a fairer, more cost-reflective apportionment of revenue responsibility. Dan Cassara’s testimony demonstrates that DEC’s proposed ROE is too high and recommends an alternative.
In summary, the three testimonies provide the Commission with the following recommendations to adopt to protect ratepayers from excessive and unnecessary rate increases:
ROE Recommendations: Approve an ROE of 7.4% that saves ratepayers $1.37 billion and meets DEC’s cost of equity, enabling the company to attract needed capital and providing investors with an opportunity to make a fair return.
MYRP Recommendations: Adjust billing determinants that reflect projected load growth, remove unnecessary pro forma cost adjustments inflating base rates, enforce the 4% revenue cap to keep MYRP2 rates at their lowest permitted level, and require future MYRPs to transparently account for all spending so that ratepayers and regulators have a complete picture of what they are paying for.
Cost of Service Recommendations: Require DEC to use the Probability of Dispatch (POD) and Non-Coincident Peak – Class (NCP-Class) methodologies in its COSS, and prepare new revenue apportionment results based on these updated approaches.
Large Load Recommendations: Establish a dedicated customer class and tariff framework for large-load customers exceeding 20 megawatts, such as data centers, and establish measures to protect existing ratepayers from the risk of cost-shifting associated with the interconnection and service of customers with loads exceeding 20 MW.
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