Duke Energy Carolinas submits annual update for charges related to fuel in South Carolina

Rhea-AI Summary

Duke Energy Carolinas has filed with the South Carolina Public Service Commission for an adjustment in fuel costs due to increased demand post-COVID-19 and rising fuel prices. If approved, residential customers using 1,000 kWh will see their bills rise from $119.32 to $135.07, marking a 13.2% increase starting October 1, 2022. Commercial and industrial customers will face average increases of 18.3% and 24.4%, respectively. The adjustment addresses a $145 million under-recovery in fuel costs, as the company does not profit from these rates.

Positive

• Duke Energy actively manages fuel contracts to minimize costs.
• The annual adjustment process provides transparency in fuel pricing.

Negative

• Proposed bill increases for residential (13.2%), commercial (18.3%), and industrial (24.4%) customers due to rising fuel costs.
• A $145 million under-recovery from the previous year will be passed to customers.

• Increased demand following COVID-19 shutdown paired with sharply rising fuel costs, which Duke Energy does not profit on, will increase customer prices
• If approved, customers will see their monthly bills increase starting in October

GREENVILLE, S.C., Aug. 1, 2022 /PRNewswire/ -- Duke Energy Carolinas made its annual filing July 29 with the Public Service Commission of South Carolina (PSCSC) for costs associated with the fuel used to generate electricity at its power plants.

Duke Energy Carolinas is seeking to recover fuel costs as part of its annual adjustment for the fuel used to power South Carolina homes and businesses. The company makes no profit from the fuel component of rates.

The PSCSC reviews the fuel costs required to serve customers to ensure an accurate adjustment is made each year. If approved, the new fuel rates would go into effect Oct. 1, 2022.

If approved, typical residential customers using 1,000 kilowatt-hours (kWh) per month would see their bills increase from the current $119.32 to $135.07, an increase of $15.75, or 13.2 percent.

Commercial customers would see an average increase in their bills of about 18.3 percent, and industrial customers would receive an average increase of about 24.4 percent.

Each year, this "true-up" proceeding is intended to resolve the difference between projected fuel costs, and what is billed to the customer. Some years, the company reimburses customers and reduces the charge to their energy bills; in other years – like this year – customers reimburse the company.

What's driving the proposed increase

Rising energy demand resulted in a significant increase in fuel needs for power generation, compounded by fuel commodity prices climbing drastically in 2021 due to tight supplies.

The sharp increase in commodity prices contributed to a $145 million under-recovery across the prior year, as fuel prices climbed sharply right after the company's annual filing. The South Carolina fuel clause does not allow utilities to adjust fuel rates during the billing period to prevent such customer underpayment, so the proposed fuel rates include recovery of this shortfall.

Duke Energy Carolinas serves about 640,000 customers primarily in the Upstate region of South Carolina, including Greenville, Spartanburg and Anderson counties. The company's other South Carolina utility -- Duke Energy Progress -- made its annual fuel filing in April.

Helping customers

Duke Energy works to actively manage its fuel contracts to keep fuel costs as low as possible for customers. Savings achieved from the joint dispatch of Duke Energy's generation fleet in the Carolinas also help to lower the company's fuel costs.

Customers struggling to pay their energy bills might also qualify for assistance from various government and nonprofit programs for utility bills and other household expenses. Customers can learn about agencies that serve their area by dialing 211, texting "electric" to 211211, or visiting sc211.org online. This free service helps connect customers to local community agencies supplying aid for a wide range of needs, including help with energy bills.

Duke Energy also offers programs and resources to help customers experiencing uncertainty, to include flexible payment options and the Share the Light Fund, a Duke Energy program that provides energy assistance.

Duke Energy offers energy-saving tips and innovative efficiency programs for every budget to help customers take control of their energy use. For example, the Home Energy House Call is a free in-home energy assessment that provides customers more information about how they use energy and strategies to save money on their monthly bill. To learn more about these programs, visit duke-energy.com/savings.

Duke Energy Carolinas

Duke Energy Carolinas, a subsidiary of Duke Energy, owns 20,100 megawatts of energy capacity, supplying electricity to 2.8 million residential, commercial and industrial customers across a 24,000-square-mile service area in North Carolina and South Carolina.

Duke Energy (NYSE: DUK), a Fortune 150 company headquartered in Charlotte, N.C., is one of America's largest energy holding companies. Its electric utilities serve 8.2 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and collectively own 50,000 megawatts of energy capacity. Its natural gas unit serves 1.6 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky. The company employs 28,000 people.

Duke Energy is executing an aggressive clean energy transition to achieve its goals of net-zero methane emissions from its natural gas business and at least a 50% carbon reduction from electric generation by 2030 and net-zero carbon emissions by 2050. The 2050 net-zero goals also include Scope 2 and certain Scope 3 emissions. In addition, the company is investing in major electric grid enhancements and energy storage, and exploring zero-emission power generation technologies such as hydrogen and advanced nuclear.

Duke Energy was named to Fortune's 2022 "World's Most Admired Companies" list and Forbes' "America's Best Employers" list. More information is available at duke-energy.com. The Duke Energy News Center contains news releases, fact sheets, photos and videos. Duke Energy's illumination features stories about people, innovations, community topics and environmental issues. Follow Duke Energy on Twitter, LinkedIn, Instagram and Facebook.

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SOURCE Duke Energy

FAQ

What is Duke Energy's proposed price increase for customers?

Duke Energy proposes a 13.2% increase for residential customers, with bills rising from $119.32 to $135.07.

When will the new fuel rates go into effect?

If approved, the new fuel rates will take effect on October 1, 2022.

What factors are driving the proposed rate increase for DUK?

The proposed rate increase is driven by increased demand post-COVID-19 and significantly rising fuel prices.

How much is the under-recovery reported by Duke Energy?

Duke Energy reported a $145 million under-recovery in fuel costs from the previous year.

What is the average increase for commercial and industrial customers?

Commercial customers face an 18.3% increase, while industrial customers will see a 24.4% increase.