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Utility price break for industrial customers on ice for now

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One of the least popular legacies of the Progress-Duke merger is in limbo.

Two weeks ago, North Carolina regulators rejected a price break for industrial customers in approving a 7.5 percent rate increase for Duke Energy Progress, the Raleigh utility with 1.3 million customers statewide.

On Monday, the N.C. Utilities Commission killed a similar break requested by Duke Energy in rate case that is now pending.

The price breaks would have essentially exempted manufacturing, chemical and other industrial power users from a rate increase. Progress and Duke both said a special exception should be made for industrial power users to buoy the state's economic base.

Duke Energy, the Charlotte utility with 1.9 million customers statewide, and Progress made the concession to their industrial customers last year in exchange for the industrial groups supporting the utilities' $32 billion merger.

But after the N.C. Utilities Commission rejected the Progress request to spare industrial users from a rate increase, Duke decided to withdraw the same request in its pending rate case. Duke and Progress, though merged, have separate rates for their customers.

On Monday, the Utilities Commission agreed to remove the provision from Duke's rate increase request. However, Duke wanted to keep the price break alive by setting it aside for a special hearing.

Instead, the Utilities Commission deferred the "job retention tariff" matter to an unspecified later date.

The special concessions for industrial customers were controversial from the beginning. The two power companies originally filed the terms under seal as "trade secrets," but the confidentiality was challenged and the Utilities Commission released the contracts to the public.

During the Progress rate hearings in March, critic after critic grilled Progress executives over the sweetheart deals. Duke executives were apparently wary of subjecting themselves to the same public humiliation.

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About the blogger

John Murawski has been a full-time newspaper reporter since 1991, with stints at Legal Times and The Chronicle of Philanthropy (both in Washington, DC), The Philadelphia Inquirer and The Palm Beach Post (in South Florida) before arriving at the N&O in December 2004. At the N&O he covers energy (nuclear, coal, renewable, efficiency), hydraulic fracturing (or "fracking"), public utilities and health care. His beat includes PSNC Energy, Piedmont Natural Gas, Duke Energy Progress, PowerSecure International, GlaxoSmithKline, Merck, Novo Nordisk, Pfizer, Biogen Idec and others. He has also contributed more than 30 book reviews on topics spanning botany, history, science and religion. You can reach him at 919-829-8932 or e-mail him.
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