Duke Energy witnesses defend propriety most customer charges

photo JEN WILSON

Duke Energy Carolinas agreed to take about $112,000 out of its proposed rate increase that was its share of the costs paid for an engineering study of a cripple nuclear plant in Duke's Florida franchise.

Duke Energy witnesses testifying in the company's rate hearing before the N.C. Utilities Commission today defended the company against accusations by the witness for watchdog group NC WARN that it was seeking to charge customers for more than $20 million worth of costs that should be paid by shareholders.

But the witnesses also made concessions, agreeing to remove about $112,000 from the utility's cost-recovery request. With charges the company had earlier agreed to forego, Duke Energy Carolinas has agreed to take out nearly $1 million from the $234 million in revenue that would be raised by its proposed 5.1% rate hike.

Duke initially asked for a 9.7% rate hike that would have raised $446 million in new revenue. But it negotiated a compromise with the Public Staff of the N.C. Utilities Commission, charged with protecting customer interests, to reduced the increase.

Carol Shrum, Duke's director of rates and regulatory strategy, and Danny Wiles were the utility's key witnesses Thursday in the hearing before the N.C. Utilities Commission.

Executive pay

They disputed testimony from California economist William Marcus, who said Duke Carolinas included charges totaling more than $30 million that Carolinas customers should not have to pay.

North Carolina's roughly 70% share of Duke Carolinas' costs would translate into more than $21 million worth of charges to N.C. customers.

Most of the overcharges alleged by Marcus involved about $25 million paid to executives of parent Duke Energy Corp. That would be more than $21 million in costs the company proposed charged to N.C. customers.

Shrum testified that a share of charges for executive compensation has been in Duke's rates for years and was neither new nor improper. Wiles testified the company had already agreed to take out about $870,000 in charges that Marcus had identified as improper in the weeks leading up to the hearing. That included $326,000 in charges Duke agreed to withdraw as the hearings opened Monday.

John Downey covers the energy industry and public companies for the Charlotte Business Journal.

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