Duke Energy and the state's consumer advocate have agreed to cut Duke's rate request by more than half just days before public hearings are set to begin in Raleigh on Monday.
Charlotte-based Duke, the state's biggest electric utility, and the Public Staff have agreed to cut the rate increase to 7.2 percent, which would add about $7 to a typical monthly residential bill of $97 a month.
The last-minute settlement aligns Duke and the Public Staff in a contentious case that has generated 1,100 protest letters from customers in the past two months alone. A number of towns and county governments have urged the N.C. Utilities Commission, which will decide the case, to consider the plight of state residents in the midst of one of the worst economic downturns in the past century.
The state's Attorney General, meanwhile, has vowed to continue fighting Duke's rate request. The Attorney General, who also represents state residents in public utility rate matters, has in the past taken a harder line than the Public Staff.
“A 7.2 percent rate increase is too much for working families and businesses during these tough economic times," according to a statement from the agency. "At the hearing, our attorneys will ask tough questions and urge the Utilities Commission to consider the impact on consumers.”
Dozens of industrial and commercial customers -- giant consumers of electricity that can pay tens of thousands of dollars a month in utility bills -- will also have to decide if they want to join the settlement with the Public Staff or continue fighting the rate request.
The matter is set for a public hearing Monday before the N.C. Utilities Commission, the state body that could accept the settleement or come up with its own determination as to what rate increase, if any, is justifiable.
Duke has 1.8 million customers in North Carolina, including about 170,000 in Durham, Chapel Hill and other areas on the western side of the Triangle.
The Public Staff had originally said it would tolerate a rate increase of only 4.8 percent. But Public Staff Director Robert Gruber said a settlement means that both sides give a little and meet somewhere in the middle.
"We reached a compromise," Gruber said.
Duke had originally requested an overall increase of 15.2 percent, but the residential component of the rate increase would have been 17.4 percent, or about $18 a month extra on a typical household bill.
Duke has argued it needed the full rate increase to cover nearly $5 billion of construction costs incurred in recent years. The company has said it plans to file for another rate increase next year as well. And Duke was granted a 7 percent rate hike in 2009.