Public hearings set to begin Monday on Duke Energy's proposed rate increase will affect 1.8 million customers in North Carolina, including about 170,000 in Durham, Chapel Hill and the western Triangle.

The N.C. Utilities Commission will consider a compromise between Charlotte-based Duke and the state's consumer advocate, known as the Public Staff, to limit Duke's rate increase to 7.2 percent.

As proposed, the compromise would raise a monthly residential bill of $97 to about $104 for a household that uses 1,000 kilowatt hours of electricity.
 

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.”

The Cities of New Bern and Rocky Mount this afternoon urged federal regulators to force Progress Energy and Duke Energy to sell off power plants as a condition of approving their merger, the most sweeping proposal to date to curtail monopoly concerns.

The filing before the Federal Energy Regulatory Commission, the agency reviewing the Duke-Progress merger, argues that the two utilities would manipulate electricity prices unless drastic measures are taken to reduce the monopoly powers of the combined company.

The federal commission's response will determine if the merger is approved in a matter of weeks, or if the $26 billion deal is delayed, which could take a year if the companies are forced to submit a new application.

The performance problems that have hobbled Progress Energy's H.B. Robinson nuclear plant will cost the Raleigh utility $24 million.

The Raleigh-based electric utility agreed not to make North Carolina customers pay $24 million in costs associated with the outages, fires and other mishaps that caused the plant to be shut down almost six months of 2010.

On Thursday Progress and the Public Staff, the state's consumer advocate, announced an agreement that will require Progress to eat those costs.

The Public Staff said that the costs associated with the outages were caused by substandard performance. As a result of the forced shutdowns at the Robinson plant, Progress had to spend extra to generate electricity at less efficient power plants and to buy power from other utilities.

State regulators slashed a rate request by Aqua North Carolina, the state's biggest private water utility with 88,000 water and sewer customers, including more than 400 subdivisions in Wake County.

The N.C. Utilities Commission approved a 5.3 percent increase for Aqua, representing an additional $2.3 million a year in sales for the company. The rate increase approved is a fraction of the 19 percent the company had originally asked for.

The rate increase will be the company's second in three years, and the request in January elicited hundreds of objections from customers who said they couldn't afford higher utility bills in the middle of a severe economic downturn.

The Public Staff, the state's consumer protection agency in utility rate cases, conducted a months-long audit of Aqua's books and concluded that the company was entitled to a puny rate increase of 1.2 percent.

The utilities commission decision, issue late Monday, essentially splits the difference between Aqua's position and the Public Staff's. Aqua had scaled back its 19 percent request to about 10 percent last month when company officials realized they had aroused intense passions from customers and skepticism from regulators.

Progress Energy and Duke Energy have reached a deal that secures key backing in this state for the companies' planned corporate merger.

The agreement disclosed this afternoon with the state's consumer advocate will require Progress and Duke to pass on millions of dollars in savings to the public in exchange for support from the consumer agency, known as the Public Staff.

A blessing from the Public Staff removes a significant obstacle to getting the merger approved by the N.C. Utilities Commission. The Public Staff has been reviewing the merger for months at a cost of $330,000 to an outside utility analyst.

However, the deal conspicuously omits terms that have been imposed on utility mergers in other states in past years -- such as rate cuts, rate freezes and guarantees to retain employees. Regulators in Kentucky, for example, are requiring a 2-year rate freeze as a condition of approval for the Duke-Progress merger.
 

North Carolina is not likely to join the growing ranks of critics who decry AT&T's proposed $39 billion acquisition of T-Mobile.

Regulators in California and Louisiana are reviewing the planned merger of the nation's second-largest and fourth-largest wireless service providers for its potential to diminish competition and customer choice.

And just today, rival Sprint has filed its opposition with the Federal Communications Commission, saying it would give AT&T and Verizon Wireless more than 80 percent of the market.

In North Carolina, Gov. Bev Perdue supports the proposed merger. In a May 31 letter to FCC Chairman Julius Genachowski, Perdue said the merger "represents another development in the marketplace which can benefit the people of my state."
 

The state's consumer advocacy agency has rejected an 18 percent rate request by Aqua North Carolina, the state's largest private water utility.

The recommendation by the Public Staff to slash Aqua's rate request sets up a hearing June 9 before the N.C. Utilities Commission.

The Public Staff filed its recommendation this afternoon in a case that has elicited dozens of protest letters from Aqua customers around the state who pleaded with regulators for support in the midst of an economic downturn that has left many unemployed and struggling with household budgets.

Rate cases are usually settled by utilities and the Public Staff, but the company and the consumer agency disagreed so strongly in this case that a compromise was never in sight.

Aqua wanted to raise rates by $7.9 million a year for its 88,000 water and sewer customers in the state. But the Public Staff said the company is entitled to raise rates by a mere $984 a year, a puny 0.002 percent. (See pages 5-6 here.)

Residents from Wake County and outlying areas made an impassioned plea Monday evening to the N.C. Utilities Commission not to allow Aqua North Carolina to raise their water and sewer rates for the second time in three years.

About two dozen people listened more than two hours to public comments challenging the rate request by Aqua, the state's largest private water utility. Aqua charges more than $100 a month for a typical residential customer in North Carolina, about twice the monthly bill charged by Raleigh, Charlotte and other municipal water departments.

The Cary-based company, with 88,00 water and sewer customers in the state, is seeking to raise bills by 20.4 percent for water service and 16.4 percent for sewer service, which would come to about $17 a month extra for a typical residential customer.

"It has gotten to the point where we don't water our lawn, we don't wash our car," Juli Williams, an Aqua customer who lives in Mallard Crossing in Raleigh, told the utilities commission. "I personally go bananas if my 10-year-old wants to fill a water gun in the summer. That's a personal story of how we have to live because of these water bills."

Less than a month after announcing his retirement, the state's top consumer advocate has changed his mind.

Robert Gruber, 67, said this afternoon that he will not step down June 1 as previously planned.

The reason: Gov. Bev Perdue called him on the phone this morning and asked him to reconsider, and Gruber agreed to stay on the job at least until the complex merger is completed between Duke Energy and Progress Energy. That means that Gruber is not likely to retire until early next year, and possibly not until the end of his appointed term in 2013.

For the past 28 years, Gruber has headed the Public Staff, an independent agency that advocates for consumers in utility rates cases involving electric utilities, natural gas companies as well as moving companies and transportation ferries. He is one of the longest-serving public consumer advocates in the nation.