Duke Energy Carolinas Obtains Proposed Agreement Relating to Rate Review Proposal in South Carolina

GREENVILLE, S.C.

, May 17, 2024 – Duke Energy Carolinas has announced a proposed settlement agreement with a majority of parties involved in its rate review request in South Carolina. The agreement will support the company’s efforts to enhance consumer experience, increase system diversity, and improve reliability.

Duke Energy Carolinas, a subsidiary of Duke Energy, filed the rate review request in January of this year, marking the first since 2018. If approved by the Public Service Commission of South Carolina (PSCSC), the agreement implies a marginal increase of around $240 million. This increase is approximately 26% less than the $323 million initially requested by Duke Energy Carolinas.

Under the proposed terms, Duke Energy Carolinas aims to accelerate the return of excess deferred income tax benefits, attributing to the Federal Tax Cuts and Jobs Act of 2017, to reduce the rate increase by approximately $84 million by July 31, 2026. This strategy results in a net increase of about $156 million.

A Positive Direction

The agreement, if enacted, will result in an increase of $12.53 per month from August 1, 2024, for an average residential customer. An additional surge of $6.42 per month will take effect from August 1, 2026, for customers using 1,000 kilowatt hours.

The proposed agreement takes into account the recovery of investments in nuclear, natural gas, solar, and hydroelectric units, and further resolves recovery of corporate headquarters, the grid, and environmental compliance costs. Duke Energy Carolinas is set to receive a return on equity of 9.94% and an equity component of the capital structure of 51.21%.

Under the proposed agreement, shareholder expenses fund $2 million, directed towards a collaboration of stakeholders focusing on enhancing support for low-income customers and investments in weatherization programs.

Supporting Parties

The agreement has received the backing of various groups, including the South Carolina Office of Regulatory Staff, the South Carolina Energy Users Committee, Southern Alliance for Clean Energy, Coastal Conservation League, Vote Solar, and the South Carolina Small Business Chamber of Commerce. Walmart and CMC Recycling, though not signatories, do not object to the proposed agreement.

Forging Ahead

Mike Callahan, Duke Energy’s South Carolina president, threw light on the implications of the agreement. “We are taking steps to keep pace with and anticipate the changes occurring in our state,” Callahan said. He added, “If approved, this agreement will support our efforts to diversify and enhance our system and continue our track record of operational excellence while keeping costs to customers as low as possible. We appreciate the parties involved thoughtfully considering the needs of our customers and our ability to continue investing in our state’s booming economy.”

The PSCSC plans to conduct an evidentiary hearing starting May 20 to review the agreement and other issues in the rate review request. Duke Energy Carolinas serves 2.9 million residential, commercial and industrial customers, owning 20,700 megawatts of energy capacity across a 24,000-square-mile service area in North Carolina and South Carolina.