On February 23, 2018, the North Carolina Utilities Commission (“Commission”) issued its 231- page order in the Duke Energy Progress (“DEP”) rate case. http://starw1.ncuc.net/ncuc/ViewFile.aspx?Id=d2b2a1a0-dae1-45de-af9c-c987d4aeddc8
The order accepted the settlement proposed by the Public Staff and DEP and the settlements of several other parties. These settlements reduced the amount of Duke’s requested rate increase to consumers by about half – largely the result of a slight lower capital structure (52% equity rather than 53%) and lower rate of return on equity (9.9%).
Perhaps the most notable aspects of the order was the Commission’s decision to allow DEP to recover from ratepayers most of the costs of coal ash removal – $232.4 million — but to impose a penalty of $30 million for failures in coal ash management. The recovery of the coal ash expense in this amount was contrary to the Public Staff’s testimony and the most hotly contested issue at the hearing.
This was the first rate case hearing in which new Commissioner Dan Clodfelter participated. He filed a separate 31-page opinion concurring in part and dissenting in part. Commission ToNola Brown Bland also filed a separate dissenting opinion on the issue of the allowed recovery of coal ash expenses.
The Commission also decided to consider the impact of the Tax Cuts and Jobs Act of 2017 in a separate Docket M-100, Sub 148. http://starw1.ncuc.net/NCUC/ViewFile.aspx?Id=a8b92334-5546-450b-8285-9e263adc5cd8
Due to similar issues in the Duke Energy Carolinas (“DEC”) rate case that was scheduled for hearing on February 27, 2018, the Commission has postponed the hearing in the DEC rate case until March 5, 2018.