DUKE ENERGY CORPORATION - Sharp rise in fuel prices during 2022 is driving up the cost to provide service to customers
- Company continues to connect customers to financial assistance and offer cost-saving tools
CHARLOTTE, N.C., March 1, 2023 /PRNewswire/ -- Duke Energy Carolinas is seeking to recover costs for the fuel used to generate electricity for North Carolina homes and businesses. If approved by the North Carolina Utilities Commission (NCUC), residential rates would go up 16.6% – 16.2% by Sept. 1, followed by 0.4% on Jan. 1.
The total monthly impact of these rate changes for a residential customer using 1,000 kilowatt-hours (kWh) per month would be an increase of $19.10, from $115.01 to $134.11 ($133.68 for September-December). If approved, rates would remain below the national average of $161.81 as of summer 2022 – before other utilities' expected rate increases from the same market pressures.
"Fuel costs to generate electricity have more than tripled over the last year, which is a challenge faced by energy providers across the country," said Kendal Bowman, Duke Energy's North Carolina president. "Our rates in North Carolina are far below the national average, and we're doing everything we can to keep customer bills as low as possible."
The company does not profit from these increased fuel costs and proactively takes measures to insulate customers from volatility. For example, the company achieved $374 million in savings by aggressively managing fuel contracts to obtain the best price, significantly reducing the overall rate impact for customers. Also, carbon-free nuclear provides about half of North Carolina's generation and helps minimize fuel volatility.
Helping customers save
"We know customers continue to face increased financial pressures from inflation and other economic stress," Bowman said. "We are connecting customers to available assistance and providing energy-saving tools and programs to help manage their bills and lessen the impact."
Duke Energy is reaching out to customers whose bills are past due through email and/or text with information about utility assistance administered by agencies in North Carolina and in local communities.
For example, the Low Income Energy Assistance Program (LIEAP) can reduce winter heating costs for low-income families, yet many customers who are eligible do not apply for this annual federal benefit. Information on how to apply can be found at ncdhhs.gov/assistance/low-income-services. Customers struggling to pay their energy bills can also seek assistance through the Share the Light Fund®, a Duke Energy program that provides assistance to vulnerable customers.
To help all customers take control of their energy use, Duke Energy offers energy-saving tips and innovative efficiency programs for every budget. 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.
The company has also proposed new energy efficiency programs and new time-of-use rates to give customers more control over their energy bill. If approved by the NCUC, these programs would reduce costs across the entire system, benefiting all customers.
Another way customers can avoid fluctuating bills is to take advantage of Budget Billing. With this free service, Duke Energy calculates an average bill for you so your wallet isn't hit harder in the summer and winter – it keeps your bill predictable. More detail is available at duke-energy.com/BudgetBilling.
Low- to no-cost energy-saving tips
Looking ahead to warmer weather, here are steps customers can take to make a difference, over and above Duke Energy programs like Home Energy House Call:
- When you're home this summer, consider setting your thermostat a few degrees higher to save – raising the temperature by just 2 degrees will help reduce cooling costs by about 5%.
- A ceiling fan can help with that – it can make a room feel up to 4 degrees cooler than it actually is. But turn it off when you leave the room.
- Keep air filters changed regularly and cleaned – a dirty air filter makes your system work harder and can increase cooling costs.
- Close blinds on the sunny side of the house to reduce the greenhouse effect from sunlight.
- Consider using a microwave for cooking, or grill outside – that cuts down on power use compared to an oven and avoids creating indoor heat that your AC has to overcome.
- Use LED bulbs – they use a fraction of the power of a traditional lightbulb and produce far less heat.
- Water heating is typically the second-biggest user of energy in your home, behind air conditioning – experts say cold water is fine for cleaning laundry with modern detergents, and that cuts down on energy use.
Why bills will increase even as natural gas prices decline
To ensure accurate rates, the NCUC annually reviews the fuel costs required to serve customers. Learn more at Fuel Costs & Your Bill.
If approved, rates for commercial and industrial customers would increase by 15.2% and 12.1%, respectively. The increase for all customer classes is primarily driven by an under-collection in fuel rates over the last year resulting from a sharp increase in fuel costs experienced during 2022 – Duke Energy Carolinas customers paid $1 billion less than their actual cost of fuel. New rates will include recovery of this shortfall, which Duke Energy has financed on behalf of customers.
Driven by increased national and international demand and tight supplies, fuel prices rose sharply following the company's 2022 fuel filing, but North Carolina law does not allow electric utilities to adjust rates during the billing period to address such customer underpayment.
Conversely, state law allows natural gas providers the opportunity to adjust monthly, if approved by regulators. For example, Piedmont Natural Gas just filed its second rate reduction of the year. While fuel prices over the coming year are subject to change, this downward trend bodes well for Duke Energy customers in next year's fuel filing.
Last year's Duke Energy Carolinas fuel filing increase was 9.6% for residential customers, stemming from a post-COVID burst in economic activity and a $327 million under-collection. Prior to that, the utility's fuel rates dropped for residential customers in eight of the previous 10 years in North Carolina.
Duke Energy Carolinas serves about 2 million households and businesses in central and western North Carolina, including Charlotte, Durham and the Triad. The company's other North Carolina utility – Duke Energy Progress – will make its annual fuel filing in June.
Duke Energy Carolinas
Duke Energy Carolinas, a subsidiary of Duke Energy, owns 19,500 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 27,600 people.
Duke Energy is executing an aggressive clean energy transition to achieve its goals of net-zero methane emissions from its natural gas business by 2030 and net-zero carbon emissions from electricity generation by 2050. The company has interim carbon emission targets of at least 50% reduction from electric generation by 2030, 50% for Scope 2 and certain Scope 3 upstream and downstream emissions by 2035, and 80% from electric generation by 2040. 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 2023 "World's Most Admired Companies" list and Forbes' "World'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
