CWIP in action: Duke Energy to hike residential rates 17%

And the unnecessary and overly-expensive Cliffside coal plant is partly to blame:

The increases are keyed to more than $7 billion in plant construction and other capital costs planned over that span. “We expect the next rate case to be smaller,” Carter says. That increase, which Duke would expect to see take effect in 2014, should not include as much for construction at Cliffside, for instance, although it will include the costs of another natural gas plant.

Another part of this (mismanaged) equation is proof positive that claims Cliffside opponents made, that the coal-burning monster wasn't needed, were correct:

The way rates are set in North Carolina, a utility uses the previous year’s sales as a base for estimating future sales. But the 2009 recession seriously reduced electricity demand across the board. Demand has not yet returned to 2008 levels.

In projecting where to set Duke’s in the 2009 case, the commission used projections based on 2008. With lower sales, Duke has a smaller pool to recover its fixed costs from. So part of the increase is sought to account for that difference.

In plainer terms, Duke's baseload demand has dropped. Considerably. Which is one reason why they've been trying to recruit power-hungry data centers to North Carolina, so all that surplus power generation capacity will be utilized (sold).

I can think of no better example to highlight the Legislature's lack of wisdom in bringing back Construction Work In Progress (CWIP) via SB3 a few years ago. Duke wins (and we lose) either way: They get their rate increases even when there's a power glut.

The Free Market fundies ought to be going ballistic over this, but since this money is funding dirty power instead of clean, they'll keep their mouths shut. Making them not only naive, but hypocrites, as well.

Comments

Well, damn

This all just highlights what a sad waste that new plant will be. I know Duke was making the case, when arguing for the permits for Cliffside, that they're planning to shut down some old generation and replace it with the new plant, but that just begs the question - why continue to burn coal?

The backbone for Atlantic offshore wind is in the works...how cool would it be to spend our ratepayer dollars on that instead of more planet-heating coal?

Very cool, indeed

But there's a huge vacuum in lobbying for renewables, as opposed to the lobbying machine that supports the coal/gas/petro industries. Which puts to rest another meme put forward by GW denialists, that the movement is somehow perpetrating a hoax to milk the taxpayers.

Where are the Free Marketeers indeed?

In plainer terms, Duke's baseload demand has dropped. Considerably. Which is one reason why they've been trying to recruit power-hungry data centers to North Carolina, so all that surplus power generation capacity will be utilized (sold).

Spread this quote far and wide.

A monopoly is overproducing a taxpayer-subsidized resource AND is using the government to recruit customers by throwing taxpayer money at them.

AND now the monopoly wants the government to force taxpayers to pay more to generate unsustainable production methods.

An idiot could run a business with this model.

Oh yeah. They already do.

 

NCgreenpower

for years I've been paying my NCgreenpower "carbon offset" through the Duke Energy bill. A few months ago, Duke changed my account# unaccountably (and without telling me) and ruined my perfect payment record since my billpay payments were landing in the ether. A mess. Anyway, I noticed that the green offsets were no longer being collected so I guess I have to fix that now too.

Progressives are the true conservatives.