Coal Ash Wednesday: NCUC Public Staff opposes Duke rate hike request

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Continuing to profit from negligent behavior is wrong:

The Public Staff recommends denying Duke’s request to bill customers for $161 million in ash-related costs at its power plants. The agency also recommends collecting remaining expenses over 26 years instead of the five years that Duke proposes. Those steps, the agency says, would have the effect of evenly splitting the costs between shareholders and customers.

Duke “had a duty to comply with long-standing North Carolina environmental regulations, and it failed that duty many times over many years at every coal-fired power plant it owns in North Carolina,” a Public Staff official said in written testimony.

This has become an annual (if not semi-annual) battle, and frankly the NCUC needs to put its foot down. Duke Energy is a financial monster, the single largest utility in the Western Hemisphere. It pays healthy dividends to stockholders every quarter, and plans to spend about $37 Billion over the next four years on new acquisitions alone:

Duke Energy has been raising cash dividend for 93 consecutive years. The current dividend yield is pegged at 4.15%, which is higher than the industry’s 2.88% and Zacks S&P 500 composites’ 1.88%. The company generated cash flow from operations of $7.19 billion in 2018 compared with $6.62 billion in 2017. Based on its financial strength, the company expects to maintain its long-term dividend payout ratio in the range of 65-75% of its adjusted earnings per share through 2023.

Moreover, Duke Energy has been making capital investments in its infrastructure and expansion projects across service territories. Currently, the company intends to invest around $37 billion in overall growth projects for the 2019-2023 time frame. This is likely to drive earnings in the combined electric and gas businesses by approximately 6% over the next five years. With further investments, the company expects to achieve earnings growth rate of 4-6% through 2023.

I shouldn't have to bring this up 2-3 times a year, this financial information is readily available. The NCUC needs to tell Duke Energy in no uncertain terms: "Before you go buying a bunch of new stuff, you need to responsibly manage the stuff you've already got."

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