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Duke agrees to 6 percent rate hike

STAFF REPORTS
Published on Wednesday, November 30, 2011

Duke Energy has reached an agreement with agencies in South Carolina for an average rate increase of 5.98 percent, contingent on approval of the Public Service Commission of South Carolina.  Upon approval the rates would go into effect in February 2012.
Duke serves about 600,000 customers in the upstate.

The agreement will be considered by the PSCSC during an evidentiary hearing scheduled to begin on Dec. 7.

Under the terms of the agreement, filed with the PSCSC, Duke Energy Carolinas agrees to:

• An increase in its base rates by $90.7 million, or $92.8 million upon confirmation by the ORS that Buck natural gas-fired power plant and Bridgewater hydroelectric station are both in service

• Allowed Return on Equity (ROE) of 10.5 percent and 53 percent equity component of the capital structure

• Forgo a general rate case filing in 2012 and 2013, but the agreement establishes a two-phase process to update base rates to reflect certain current capital additions underway. In phase I the update will not exceed $45 million or a 2.74 percent increase with an effective date of Feb. 2013. The company will be able to recover the remainder or approximately 2.07 percent increase in phase II with an effective date of Feb. 2014. The two Phases would not exceed a cumulative increase of $80 million to the company's revenue requirement over the two-year period.

• Donate $4 million to AdvanceSC for economic development, low income assistance, education initiatives, and existing manufacturing support.

The list below shows the approximate average impact of the proposed agreement for each customer class. The specific increase for individual customers will vary, depending on the rate they pay and other factors.

• Residential – 7.1 percent, which would be less than $6.25 each month for customers who use 1,000 kilowatt-hours each month

• Commercial (general service) – 5.2 percent

• Industrial – 5.1 percent

• Lighting – 5.8 percent

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