From: Bill Gupton
One of the questions we've needed for our messaging is the long term
impact of an Annual Rate Hike Bill on NC electric rates. Synapse
Energy Economics has completed a report that projects that early cost
recovery for Dukes proposed Lee Nuclear Station could raise rates by up
to 46% beyond 2009 levels. The report also addresses many of the points
that we have been making for the past 2 years, "Synapse author Max
Chang wrote, The project appears less costly, but only because
ratepayers have already paid the financing costs
interest-free loan to the utility."
When you add in construction costs from the Duke Energy 2012 Integrated
Resource Plan and the projections from the Synapse report, we could see
rates almost double by 2019 with another 50% increase over the following
Please feel free to share and use widely.
Consumers Against Rate Hikes
Contact: John Runkle (919) 942-0600
December 18, 2012
Consumer Alliance Warns of a Doubling of
Electricity Rates under
Duke Energys Business Plan
Economists say a proposed annual rate hike bill to fund new nuclear
plants would be an
interest-free loan to Duke from ratepayers without saving any money.
A new study by energy economists warns that North
Carolina customers will see power bills skyrocket if legislators allow
Duke Energy Progress to begin raising rates to pay for new nuclear
reactors that would open in 2024 at best. The consumer alliance that
fought off such legislation over the past two years said today that
Dukes business plan to build unneeded power plants could almost double
rates by 2019 with another 50% increase over the following decade,
severely impacting the states economy.
Consumers Against Rate Hikes (CARH), a broad alliance formed to counter
Dukes efforts to pass the annual rate hike legislation, said today that
Duke, after the deciding to back off attempting to introduce the bill in
the two previous legislative sessions, may well be trying to line up
votes again for the 2013 legislative session. Thats because Duke CEO Jim
Rogers has repeatedly and publicly stressed that without the legislation,
which would let the utility raise rates every year with almost no
oversight, financial risks are too high for Duke to attempt building new
nuclear power plants.
Synapse Energy Economics, Inc., in the study commissioned by CARH,
rejected Dukes key talking point that the bill would somehow save
customers money by charging them as the plant is being built.
Synapse author Max Chang wrote, The project appears less costly, but
only because ratepayers have already paid the financing costs
effectively an interest-free loan to the utility.
Synapse found that early cost recovery for Dukes proposed Lee Nuclear
Station, on its own, could raise rates by 37 - 46% beyond 2009 levels,
the year Duke began raising rates to cover its aggressive expansion of
power plants. The Charlotte-based utility boosted residential rates by
16% during rate cases in 2009 and 2011 and plans to file for another rate
increase early next year. A separate analysis of the billions more in
construction costs from the Duke Energy 2012 Integrated Resource Plan and
the projections from the Synapse report shows that rates could almost
double by 2019 with another 50% increase over the following
Another analysis using other assumptions and data has projected much
higher rate increases.
Massachusetts-based Synapse reported that cost estimates for Dukes Lee
project have already doubled since 2007, and the economists warned that
the lack of transparency surrounding this project adds to ratepayer
Carley Ruff of the NC Housing Coalition speaking for CARH today noted
that, The public gets cheated if Rogers can coax our elected officials
into forcing those risks onto customers backs with rate hikes year
after year that would hit us all, and the economy, like a series of body
blows: more disconnections, more jobs lost, more foreclosures, more
stress on small business and local government budgets.
The Synapse economists said problems among current nuclear construction
projects should be heeded. The nations first nuclear project in a
generation, Plant Vogtle, gained a construction license early this year
but is already submerged in cost overruns and lawsuits between
contractors and owner Georgia Power.
A similar project in Florida by Duke-Progress has suffered a quadrupled
cost estimate to over $24 billion years before construction could
begin. That projects earlier political supporters are now fighting
to overturn the very same annual rate hike legislation that Duke wants
from NC lawmakers.
Duke customer rates could double even before the Lee plant would open,
said Bill Gupton, CARH Outreach Director, today, and then wed get
another dose of rate shock. I hope state lawmakers are wise enough
to avoid this tar pit that other states have already fallen into.
Synapse wrote, Given these facts, we find that Dukes ratepayers will be
poorly served if North Carolina adopts early ratepayer financing under
nuclear Construction Work in Progress legislation.
A May 2012 poll commissioned by CARH showed that 86% of NC voters would
oppose a law that would allow Duke and Progress Energy Corporations to
increase rates annually to pay for building nuclear power plants rather
than have these corporations take the financial risk.
Consumers Against Rate Hikes
(CARH) is a nonpartisan coalition of
nonprofit organizations, faith-based communities, businesses, and
individuals concerned about the impact of an Annual Rate Hike Bill that
would, if passed by the NC legislature, give Duke and Progress Energy
Corporations a blank check to raise our rates every year. Those rate
hikes would dramatically drive up rates for our seniors, families,
schools, towns and businesses. It would hurt our struggling economy and
cost us jobs. Duke and Progress Energy Corporations want the legislature
to pass an Annual Rate Hike Bill to shift the risk and cost burden to
consumers because they cant get Wall Street to gamble on their
financially risky power plant construction plans. For more information