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Duke Plans To File Rate Increase Request In June

By Christina Haley O'Neal, posted May 26, 2017
Duke Energy Progress employee holds coal ash during a tour with media Friday of the ongoing coal ash operations at the Sutton Plant off U.S. 421 in Wilmington. (Photo by Christina Haley O'Neal)
Duke Energy Progress will file a request for rate increases in June to offset the cost of the $300 million price tag of coal ash removal on five sites across North Carolina.

The Sutton Plant site, decommissioned in 2013, is currently undergoing coal ash removal operations daily, according to Jeff Brooks, spokesman with Duke Energy Progress. Crews began work on the project in November 2015.

The project is the result of the Coal Ash Management Act, passed in 2014, which also required the closure and safe disposal of ash basins at 14 coal sites across the state. Duke Energy was also required to pay a $7 million fine to resolve alleged groundwater contamination at 14 sites, Brooks said. The settlement, less than the original penalty of $25 million, came in September 2015.

Crews are currently working to remove and transport 7 million tons of coal ash from the 110-acre site; 2 million tons are currently being transported by rail to Chatham County for fill of a former clay mine known as the Brickhaven Mine project, and the remaining 5 million tons will go into a 60-acre lined landfill located beside the old basin, further away from Sutton Lake.

Brooks says Duke Energy Progress is scheduled to complete the project in August 2019. The deadline, he said, is a quick turn-around, but one the company has to meet by law.

To reserve and defer some of the costs for managing ash across the utility, Duke Energy Progress will file for a utility rate increase with the North Carolina Utility Commission.

“We requested about $300 million that had been spent in 2015 and 2016, to be reserved for us to present in a future request to change costumer rates,” Brooks said.

Duke Energy plans to file that request “on or about June 1,” he said. 

Costs in the upcoming rate request are related to current activities at the Sutton Plant, which include excavating ash, moving and transporting ash to the Brickhaven Mine, construct the fully-lined landfill at the Sutton site, and possibly create a recreation site at Sutton Lake.

“Because Sutton plant was one of the first sites to begin removing ash and closing basin in the service area . . . a good bit of costs of that $300 million will be related to activities here at the site. Simply because other sites, we’re just beginning to ramp up," Brooks said during a tour of the site Friday. "But this is actually the site where the most ash activity [removal] has been going on … in addition to Asheville and the western part of the state."

The June rate filing will be Duke Energy's request. Once the application is made with the N.C. Utilities Commission, it starts a several monthlong process of the commission looking at the information Duke Energy Progress provides, along with information from other groups that will participate in the case.

The utility company will then have to “present and defend” evidence for the rate increase, Brooks said. The public will also have the chance to comment through public hearings with the N.C. Utility Commission locations across the state.

The process could go through an evidentiary hearing as early as October or November. The utilities commission will ultimately decide what rates to charge customers, Brooks said.

The actual figure for the rate increase will not be announced until the filing in June, he said, adding that if the case goes through, Duke Energy customers will not see an increase in utility rates until sometime in early 2018.

Editor's note: This story reflects a correction Duke Energy's fine and the Coal Ash Managment Act, which required the closure of 14 coal ash basins across the state.

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