Citizens oppose Duke Energy’s proposed rate hike

by Keith Barber

Bruce McCall, a Colfax resident, called a proposed 18.6 percent rate increase by Duke Energy “an outrage,” during a public hearing of the NC Utilities Commission at High Point City Hall last week. (photo by Keith T. Barber)

Donna Lisenby made a plea to the members of the NC Utilities Commission during a public hearing regarding a proposed rate increase by Duke Energy at High Point City Hall on Oct. 27.

“This is a rich, powerful corporate wolf attempting to fleece the flock of us poor and middle-class North Carolinians and you guys are the only ones that stand between us and that wolf that wants to fleece us,” Lisenby said. “We’re coming here tonight and asking you to please not let this rich corporation fleece the 99 percent of us. They’re the one percent — we’re the 99 percent and we don’t want to be fleeced by them anymore.”

Lisenby’s sentiments were echoed by practically all of the 49 citizens who addressed the seven-member commission.

Duke Energy Carolinas has filed a “rate case” with the NC Utilities Commission that would increase residential rates an estimated 18.6 percent and business rates by 14 percent. Duke Energy is also requesting a 12-month rider to cover $3.7 million of costs associated with its abandoned Coastal Wind Turbine Project. Betsy Conway, a Duke spokesperson, said under state law, utilities have the ability to change higher rates outside a rate case. These rate increases are known as “riders.”

The public hearing last week in High Point was one of six hearings held across the state by the commission.

Sandra Diaz, the North Carolina campaign coordinator for Appalachian Voices — a regional environmental nonprofit — passed out fliers before the start of last week’s hearing. Diaz said Appalachian Voices opposes the proposed rate increase and Duke Energy’s risky investments in coal-fired power plants.

“What [Duke Energy] should do instead of building new coal and nuclear facilities, is taking that same money and investing it in energy efficiency,” Diaz said. “It’s a win-win for everybody involved because energy efficiency reduces energy bills.”

In an e-mail, Conway rejected the notion that Duke Energy is pursuing a rate increase to finance the construction of new nuclear facilities. Duke Energy buys coal from companies engaged in mountaintop removal in central Appalachia and burns coal that pollutes the air in the Southeast, Diaz stated. Diaz said investments in energy efficiency would reduce energy use, create jobs and reduce pollution and the release of toxins such as mercury into the environment.

“The one thing it doesn’t do is increase shareholder revenue,” she said.

Duke Energy profits are up and the company’s CEO, Jim Rogers, received a compensation package worth millions of dollars last year, Diaz said. A Duke Energy filing with the Securities and Exchange Commission last month indicates that Rogers received more than $8.8 million in compensation last year including company stock, stock options and pension benefits.

“This is not about need — this is about trying to get as much money as they can out of their rate payers and having little concern for their well-being especially in these economic times that are so hard for so many people,” Diaz said. “People are deciding between medication and electricity; they’re deciding between buying food at the grocery store and their electricity bill. That’s an unfair choice that people have to make.”

Edward S. Finley Jr., chair of the commission, opened the meeting by explaining the rate case process. After the public hearings conclude, the NC Utilities Commission will issue a written order regarding the proposed rate increase. Finley advised citizens that they should limit the scope of their comments to the proposed rate increase.

“Try to persuade us with your logic,” Finley said. “I know people have emotional reactions to this increase; we need to know the facts.”

David Wolf, a Greensboro resident, asked commissioners how Duke Energy can operate as a legal monopoly with the responsibility of serving the public good while simultaneously operating as a publicly traded company that answers to stockholders.

“If they’re asking for more money, I’m real curious how they intend to use that money because their track record tends to indicate that they don’t use that money for the public good,” Wolf said.

Of Duke Energy’s four electric utility subsidiaries, only Duke Energy Ohio operates in a state that has adopted retail competition for consumers.

Davis Montgomery, a district manager for Duke Energy, stated the company’s position at the start of the meeting. Duke Energy has invested about $4.8 billion to modernize its electrical system to comply with state and federal emission standards and the company is doing all it can to control costs while maintaining electric rates that are below the national average, Montgomery said. The company has created jobs and brought millions in investment to the region, he added.

David Allen, a High Point resident, took issue with how Duke Energy spends its money. Allen said Duke Energy should stop spending tens of millions of dollars on lobbyists and “stop buying politicians.” Allen said Rogers’s compensation package in 2010 represented a 27 percent increase from the previous year.

“Given the fact that Duke Power’s stock during that time only appreciated 4.89 percent, I think someone needs to go back and look over that performance evaluation,” Allen said. “Could somebody please explain to me, in a performance job evaluation that doesn’t contain the phrase ‘cured cancer,’ does anybody do to merit $3,317.30 an hour?” Allen complained that Duke Energy’s executives are disconnected from the reality of the economic hardships their customers face in the current recession.

Jeff Miller, a Walkertown resident, complained that Duke Energy Carolinas got a requested 8 percent rate hike that began in 2010 and a 5 percent rate increase for a fuel rider. If the 18.6 percent residential rate increase is approved, it means that North Carolinians will see their power bills balloon by more than 30 percent in just two years time.

Harvey Pulliam Jr., a retired Kernersville resident, said he, like thousands of Duke Energy customers, is living on a fixed income and a rate increase would impose an unfair burden on seniors.

Carissa Joines said she works 40 to 50 hours a week to support her family but still lives at poverty level. Duke Energy recently sent her a notice of disconnection.

“I have to choose month to month if I’m going to pay water or electricity so I rotate [paying] them back and forth,” she said.

Valerie Warren of Greensboro said her family spends $300 a month on electricity in the winter, a cost that is nearly impossible to bear. She said her 6-year-old daughter suffers from asthma that she believes is linked to air pollution and the burning of coal. Warren said Duke Energy should pursue renewable sources of energy like wind and solar rather than investing in coal-fired plants.

“Even absent the rate increase, what demands are [consumers] making towards healthy energy resources?” she asked.

The Center for Global Development ranks Duke Energy’s Belews Creek plant in Forsyth County as the 28th highest CO2-emitting power plant in the nation, releasing an estimated 13.6 million tons of carbon dioxide into the local environment annually.

Sally Hirsh of Winston-Salem also spoke about Duke Energy’s environmental impact.

“I don’t think North Carolina has done its part to look into energy efficiency — that’s where the money should be going now, first and foremost,” Hirsh said. “We shouldn’t be talking about filling our air, waterways and our environment with more pollutants.”

Forsyth Tech President Gary Green praised the partnership between Duke Energy and the state’s community colleges to provide training for citizens who have lost their jobs in industries like tobacco, furniture and textiles.

“Duke Energy has been a positive partner in economic development in our communities, both here in this area and throughout the state,” Green said.

Green’s praise of Duke Energy proved to be the exception rather than the rule.

“Instead of raising the rates they should be cutting the rates,” Bruce McCall of Colfax said. “Instead of giving their investors an increase in profits during these economic times, they should be slashing their dividends, slashing their profits and the costs that they have to operate in order to provide relief for the very citizens and small companies that are working their brains out trying to make ends meet.”

The comments from critics of Duke Energy met with enthusiastic applause.

David Drooz, a member of the Public Staff of the NC Utilities Commission, said the agency had not yet finalized its position, “but it’s very clear that the Public Staff will be opposed to a large portion of the request by Duke Energy and those competing positions will be reviewed and weighed by the commission.”