Asheville – Duke Energy Progress has cut residential electricity rates for its customers by 4.5%. That only amounts to about $7 or $8 on the average electric bill. Commercial customers will enjoy a rate decrease of 6.3%, whereas industrial customers will see rates go down less than 0.1%. Duke says the decrease will bring residential rates 11% below the national average of $174.21 a month.
Duke requested permission from the North Carolina Utilities Commission to implement the cuts, as well as similar cuts for Duke Energy Carolinas’ customers. The commission was established by the General Assembly to regulate the rates and services of public utilities. Its responsibilities include approving rates and charges, ensuring reliable and quality service, deciding whether or not new power plants are needed, siting new power plants and their transmission systems, and overseeing programs to incentivize conservation and broader use of renewables. The commission approved the rate reductions on November 13.
Duke representatives said the company was able to lower its costs of operating its plants because fuel prices are falling. A press release added, “Duke Energy Progress works to actively manage fuel contracts to help keep costs as low as possible for customers. Bills reflect actual fuel costs—customers pay what we pay.” In other words, Duke applies no markup and earns no profit off fuel charges. Because price changes must be approved through a regulatory process, changes to billing will lag behind market trends.
Fuel charges appear as the “Energy Charge” on residential bills. They make up only two-thirds of the total. Other charges include the $14 Basic Charge, or maintenance fee, billed just for having an account.
Storm Recovery Charges collect funds for responding to natural disasters, and Duke and its collaborators did a great job getting power back expeditiously after Helene. Funds are collected like insurance premiums, so the company has the resources to respond to disasters, and consumers don’t get hit with impossible bills. Storm recovery costs are expected to increase in 2025 and 2026 to cover the billions of dollars in damage caused by Helene.
Consumers won’t see these increases on their bill for another year, either, because requests have just begun making their way through the utilities commission. Part of the process requires the utility to “demonstrate those costs were incurred prudently in the service of our customers,” and Duke is currently in the process of pursuing permission to issue storm bonds.
Also on energy bills are Rider Adjustments and the Renewable Energy Rider. These used to be added into the Energy Charge; now, they’re itemized for customers. They cover dedicated expenses, including but not limited to infrastructure improvements, transitioning to greener technologies, promotions for incentivizing consumer conservation, and providing assistance for low-income households.
In North Carolina, Duke operates both nuclear plants and coal-fired plants. According to the presser, “Carbon-free nuclear provides about half of North Carolina’s generation and helps minimize price swings.” For the Asheville area, the utility recently forewent expansions of its coal-burning operations at its Lake Julian plant to install a natural gas generator. The decision was promoted by environmental interests like MountainTrue, but not without grumblings.
While natural gas is cleaner for the air, lake, and soil, the price per BTU of coal had been running under 2/3 that of natural gas when the new plant was under construction. It wasn’t until 2023 that parity between the fuels’ prices was achieved, and that was largely due to legislation forcing companies to net-zero carbon emissions, thereby incentivizing scarcity in the coal market.
Duke is also planning to construct a solar farm atop the literal ashes of the old coal-burning plant. Along with a 5-megawatt storage system, the plant should have the capacity to power 1,800 homes.
Last year, the utilities commission approved a three-year plan for Duke Energy Progress. This overlay plan would raise rates 14.6% over that period. The rates would be phased in with an initial 8.3% hike, a 3.3% increase in 2025, and the final boost in 2026. Duke had originally requested a rate hike of 15.7%.
At the time, statements from Duke spokespersons indicated the increases were necessary to pay for infrastructure improvements that complied with the utility commission’s requirements for providing the area with adequate, affordable, nimble, and reliable electricity, as well as meeting “customer expectations.”
The three-year plan, Duke’s first, was made possible by legislation passed in 2020 that changed how utilities could set their rates. The same bill also required Duke to net-zero its carbon emissions by 2050.