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Progress Energy Seeks Rate Increase

By Staff Reports, posted Jun 6, 2011

Progress Energy is seeking a rate increase the company said is needed to recover increased costs to generate electricity and investments in energy-efficient programs and renewable energy sources.

The request was filed Friday with the North Carolina Utilities Commission. If approved, the rate for a monthly residential bill for 1,000 kilowatt-hours (kWh) would increase by $3.87, from $102.19 to $106.06, approximately the price level from 2009.

The request comes after two years of rate reductions; in 2010 the residential price for 1,000 kWh of electricity dropped $4.12. Progress Energy has not requested an increase in its base rate since 1988.

The largest portion of the proposed increase is for the fuel component in customer rates, reflecting higher costs paid for power plant fuels, particularly coal, as well as materials required for emission reductions from coal-fired power plants. The fuel component would be $2.66 per 1,000 kWh.

Additional requested increases include an energy-efficiency/demand-side management charge ($1.16 per month); in addition, the charge for renewable energy would increase 5 cents per 1,000 kWh to a rate of 63 cents per month.

Residential bills would see the lowest total increase of 3.8 percent, while commercial customers would see approximately a 4.4 percent increase, and industrial customers would see the largest increase of approximately 5.8 percent.

The fuel portion of Progress Energy’s rates is adjusted annually by the Utilities Commission and reflects the actual cost of the fuel used to produce electricity. By law, Progress Energy does not make a profit from fuel charges.

Progress Energy serves 1.5 million customers, 1.3 million of which are in North Carolina.

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