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Duke rate hike proposal gets another hearing tonight in Durham

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Wednesday, November 2, 2011

(Updated 4:33 am)

By
Associated Press

DURHAM (AP) — North Carolina utilities regulators are hearing from the public as they consider Duke Energy's request for what would be its largest rate increase for residential customers in at least 20 years.

The latest public hearing on Duke's request to raise rates by nearly 20 percent is Wednesday at Durham City Hall.

If the North Carolina Utilities Commission allows the increase, monthly bills for typical residential customers would rise from $95 to about $113, starting in February.

Earlier hearings were held in Charlotte, Franklin, Marion, and High Point. The final hearing is Nov. 28 in Raleigh, when the utilities commission hears testimony and cross-examination of witnesses for Duke Energy and groups opposed to the request.

Charlotte-based Duke also wants to raise South Carolina residential power rates by 17 percent.

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Stan P

November 2, 2011 - 4:28 pm EDT

I take issue with the rationale given. If Duke Energy (DE) is totally replacing the system with a newer one, then it is allowed under IRS regulations to amortize and DE is granted a tax deduction proportionally each year. If on the other hand DE is declaring all of the costs as maintenance/repair expenses then the IRS regulations provide an immediate deduction for the entire amount spent. So unless DE is completely putting new equipment into operation throughout NC and SC while completely eliminating existing equipment, (which would still grant a partial IRS deduction to offset the Capital Expenditure), this rate increase is actually a disguise to increase profit/investment portfolios or DE salaries/bonuses at the taxpayers' expense. Both NC and SC provide DE with significant tax incentives in exchange for a decrease environment regarding competition. Thus, the rationale given is actually false, either in part or in full, and DE is requesting taxpayers to subsidize DE profit margin in some form.