Duke Energy Progress proposes annual update to charges related to fuel in South Carolina

Rhea-AI Summary

Duke Energy Progress announced a proposed increase in fuel costs for South Carolina customers, citing rising demand and escalating fuel prices. If approved, residential bills would rise 8.3%, from $122.86 to $133.01 starting July 1, 2022. Commercial and industrial clients would see increases of approximately 9.5% and 12.1%, respectively. The increase aims to recover a $32 million under-recovery due to prior year fuel costs and reflects a true-up adjustment mandated by the Public Service Commission of South Carolina.

Positive

• Duke Energy actively manages fuel contracts to minimize costs for customers.
• The proposed adjustments reflect a regulatory 'true-up' process to balance fuel cost adjustments.

Negative

• A $32 million under-recovery from the previous year indicates financial strain due to rising fuel costs.
• Customer bills are expected to increase significantly, affecting affordability.

• Rising 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 July.

GREENVILLE, S.C., April 21, 2022 /PRNewswire/ -- Duke Energy Progress made its annual filing April 20 with the Public Service Commission of South Carolina (PSCSC) as part of an annual adjustment of the actual cost of fuel used to generate electricity at its power plants.

Duke Energy Progress is proposing an increase in monthly fuel costs 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 July 1, 2022.

Under the proposal, typical residential customers using 1,000 kilowatt-hours (kWh) per month would see their bills increase from the current $122.86 to $133.01, an increase of $10.15, or 8.3 percent.

Commercial customers would see an average increase in their bills of about 9.5 percent, and industrial customers would receive an average increase of about 12.1 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 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 $32 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 Progress serves about 175,000 customers in the northeastern part of South Carolina, including Darlington, Florence and Sumter counties. The company's other South Carolina utility -- Duke Energy Carolinas -- will make its annual fuel filing in July.

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 Progress

Duke Energy Progress, a subsidiary of Duke Energy, owns 12,500 megawatts of energy capacity, supplying electricity to 1.7 million residential, commercial and industrial customers across a 29,000-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.

Media contact: Ryan Mosier
800.559.3853

View original content to download multimedia:https://www.prnewswire.com/news-releases/duke-energy-progress-proposes-annual-update-to-charges-related-to-fuel-in-south-carolina-301530242.html

SOURCE Duke Energy

FAQ

What is the proposed monthly bill increase for Duke Energy customers in South Carolina?

If approved, residential bills will increase by 8.3%, from $122.86 to $133.01 starting July 1, 2022.

Why are Duke Energy's customer bills increasing?

The increase is due to rising fuel costs and higher energy demand following COVID-19 disruptions.

When will the new fuel rates take effect for Duke Energy customers?

The new fuel rates are proposed to take effect on July 1, 2022, pending approval.

What percentage increase will commercial and industrial customers face?

Commercial customers will see an average increase of about 9.5%, while industrial customers will experience an average increase of about 12.1%.

How does Duke Energy's true-up process affect fuel costs?

The true-up process reconciles projected fuel costs with actual billing, resulting in adjustments that can increase customer charges.