RALEIGH — North Carolina’s highest court is examining whether state utilities regulators correctly weighed the consumer impact of two rate increases for a Duke Energy operating unit.
The state Supreme Court was scheduled to hear arguments Monday in two lawsuits in which Attorney General Roy Cooper argues regulators didn’t sufficiently consider the size of rate increases. The two rate cases involve Duke Energy Carolinas, a Duke Energy subsidiary serving customers in Durham and western North Carolina.
One case involves a 4.5 percent average increase approved last year for two years, growing to a 5.1 percent increase thereafter. The second involves a 7.2 percent rate increase originally approved in 2012. Consumers are already paying the higher rates.
Cooper appealed the 2012 rate increase and the Supreme Court last year ordered the North Carolina Utilities Commission to reconsider its size in light of its effect on customers. The commission did, but came to the same conclusion.
Cooper’s staff attorneys argued in court filings that regulators didn’t really make the findings of fact about the effect of changing economic conditions on customers required by the Supreme Court in last year’s ruling.
Attorneys for Duke Energy Carolinas said in court documents that regulators applied their independent judgment in setting the company’s return on equity, a measure of profit, at 10.5 percent. The utilities commission also complied with the Supreme Court’s 2013 ruling “by taking into account the consumer interest in its determination of ROE,” company attorneys wrote.
The Supreme Court last month approved an $88-a-year increase for residential customers of the former Progress Energy.
Duke Energy, the Charlotte-based corporate parent of Duke Energy Carolinas, has defended the rate increase as necessary to recover some of the $11 billion it has invested in the past quarter-century and benefiting customers in the long term by guaranteeing safe, reliable power.