Duke Energy’s SC Rate Increase May Be Less Than Anticipated
Electric customers in South Carolina may encounter a smaller than expected increase in their monthly bills in March 2024. This potential adjustment follows a proposed settlement related to Duke Energy’s rate hike plan submitted in July.
Duke Energy’s Rate Increase Proposal
According to the settlement, residential customers utilizing 1,000 kilowatt-hours (kWh) per month will see an increase of only 84 cents. This adjustment will raise their bill from $136.82 to $137.66, effective March 1, 2024. In two years, this amount is projected to increase by an additional $4.21, bringing the total to $141.87.
Reasons for the Rate Increase
Duke Energy Carolinas, the subsidiary of the Charlotte-based Duke Energy, asserts that the rate hike is essential for covering the costs associated with enhancing grid reliability and resiliency. These improvements pertain to transmission and distribution systems, as well as the capital expenses required for funding these enhancements.
- Initial bill increase: 84 cents
- Projected increase in two years: $4.21
- Current bill rate: $136.82
- Future bill rate: $141.87
Settlement Details
The partial settlement, filed on November 11, with the South Carolina Public Service Commission, represents an annual revenue increase of $74.2 million. This figure is significantly lower than the originally proposed $150.5 million. Stakeholders involved in the settlement include environmental groups, consumer advocates, and small businesses.
Kate Mixson, a senior attorney with the Southern Environmental Law Center, emphasized that the agreement features essential provisions to support South Carolinians amidst rising living costs. Customers are expected to benefit from improved energy efficiency programs and clean energy initiatives.
Future Considerations and Provisions
The settlement stipulates future proceedings to address residential protections against potential costs associated with rising energy demands, primarily driven by data centers and other large users. Additionally, enhanced energy efficiency measures such as weatherization and solar projects are highlighted.
- Future PSC proceedings to address rising energy demand costs
- Increased focus on energy efficiency programs
- Installation of solar plus battery systems
Offsetting Bill Increases
Duke Energy representatives, including spokesperson Ryan Mosier, mention two sources of credits aimed at partially offsetting these bill increases. These include:
- $100 million in federal tax credits over two years for renewable energy production
- $750,000 annual contribution from shareholders for two years
Context of Rising Costs
As the cost of living continues to rise in South Carolina, any increase in utility rates directly impacts lower-income households and those on fixed incomes the most. It is important to note that rising energy costs are a nationwide issue. However, South Carolina is projected to see some of the highest electric bill increases in the country over the next decade. This situation is exacerbated by recent changes to federal clean energy incentives.
Duke Energy’s proposed hike follows a previously approved rate increase by the Public Service Commission set to take effect in August 2024, which will be the company’s first increase in five years. This earlier increase will be implemented in two phases, with the second phase planned for August 1, 2026.
