By Bill Poovey email@example.com
The South Carolina agency that represents the public’s interest with utilities has recommended that Duke Energy reduce its $220 million rate request and the utility has agreed to consider seeking less.
The recommendation is for $119 million over two years, or a 5.5% increase — $80.5 million — the first year and another 2.6% — $38.2 million — a year later.
Dukes Scott, director of the S.C. Office of Regulatory Staff, said the recommendation developed by its accountants, engineers and rate analysts is “what we consider in this case to be in the public’s best interest.”
The recommended overall reduction to the utility’s request for a 15.1% average increase is $101.3 million.
The recommendation in Office of Regulatory Staff testimony filed in the rate case will be considered by the Public Service Commission when its hearings on the request start July 31. Charlotte, N.C.-based Duke Energy provides electricity to 540,000 households and businesses in South Carolina.
Duke Energy’s $220 million request would boost monthly residential bills for 1,000 kilowatt-hours to $118.28, an increase of $17.83. The Regulatory Staff recommendation would make that $107.97 the first year and $110.76 the second year.
The Regulatory Staff recommendation is based on a 10.2% maximum return on equity, or profit margin for the utility. Duke Energy has requested an increase from its current 10.5% return on equity to 11.25% but in a stipulation has agreed to consider 10.2%.
Duke Energy, the Office of Regulatory Staff, S.C. Small Business Chamber of Commerce, the Commission of Public Works of the city of Spartanburg, Spartanburg Sanitary Sewer District, Wal-Mart Stores, East L.P. and Sam’s East Inc. have agreed in a stipulation to the 10.2% return on equity for the utility.
Scott said the parties “have engaged in extensive negotiations on the rate of return on equity and are in discussions regarding the revenue increase and various pro forma adjustments.”
The stipulation is subject to a written settlement agreement and any of the parties can withdraw without penalty.
A Duke Energy statement said the utility is “reviewing and evaluating the testimony of the Office of Regulatory staff and all parties” and will be responding.
“In signing a preliminary stipulation on the return on equity, we have taken an important step toward reaching a settlement,” Duke Energy’s email statement said. “We are hopeful that we will be able to reach a comprehensive settlement with multiple parties in this case over the next few weeks.”
Frank Knapp Jr., president and CEO of the S.C. Small Business Chamber of Commerce, said in a statement to members that the organization agrees with the stipulation.
“The small businesses in Duke’s service area will be very pleased if this comes to fruition,” he said.