Coal Ash Wednesday: Duke Energy rate increase begins June 1st


It could have been much worse, but it's still not necessary:

Duke Energy Progress electric rates will increase by an average of 4.7% across all customer groups, effective June 1. The annualized bill for a typical residential customer using 1,000 kilowatt-hours (kWh) of electricity per month will increase to $119.83 from the current $113.53 over the next two years.

The specific increase for individual customer groups will vary, depending on the rate they pay. The average rate increase will be 5.3% for residential customers, 4.7% for commercial customers and 3.6% for industrial customers.

Duke Energy pays out about 75% of its earnings in stockholder dividends, and those dividends have grown by almost 10% in the last 3 years. In actual dollars paid to investors, it's now roughly $2.8 Billion, per year. Which makes this almost laughable:

The NCUC approved several Duke Energy proposals to reduce the impact of rising costs on low- and fixed-income customers. Duke Energy shareholders will contribute $6 million over two years to the Helping Home Fund to provide energy- and cost-saving measures to North Carolina customers, $5 million over two years to the Duke Energy Carolinas Share the Warmth program and $5 million over two years to the Duke Energy Progress Energy Neighbor Fund to provide billing assistance to low-income customers.

The people who are helped by these programs probably wouldn't consider them pointless. But in the overall scheme of things, they are.



Understand, there is nothing inherently wrong

in paying quarterly dividends to shareholders. Any healthy portfolio should include dividend-paying stocks, especially for those folks who are retired with Social Security and maybe a modest pension.

That being said, Duke is a public utility, and the overall financial strength of the company should be an integral part of any rate increase decision. The state has agreed to ensure a profit, but it didn't (unless I missed it) agree to a constant increase in said profits. Duke has built into its system an annual increase of about 3% in dividend yield, something the NCUC is not obligated to facilitate.

I can't make it any plainer than that. And I shouldn't have to bring it up at all, frankly.