Progress Energy Carolinas residential rates to fall Dec. 1 in North Carolina

Changes reflect lower costs of fuel

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Nov 29, 2012, 09:00 ET

RALEIGH, N.C., Nov. 29, 2012 /PRNewswire/ -- Progress Energy Carolinas residential customers in North Carolina will pay slightly less for electricity beginning Dec. 1.

As approved by the N.C. Utilities Commission (NCUC), the bill for a residential customer using 1,000 kilowatt-hours (kWh) per month will decrease from $105.15 to $104.06.

The decrease is similar to other decreases applied in 2009 and 2010.

In September, customers began seeing reductions in their bills related to Progress Energy's merger with Duke Energy (NYSE: DUK).

Although Duke Energy Carolinas and Progress Energy Carolinas continue to operate as separate utilities, the merger agreements allow the companies to jointly dispatch power plants to reduce fuel expenses – thereby lowering the fuel costs passed on to customers. These changes are already saving residential customers 85 cents on a monthly 1,000 kWh bill.

The additional decrease announced today reflects changes in three components of the rates N.C. residential customers pay. The changes, based on a monthly 1,000 kWh bill, include:

A decrease of $1.54 in the monthly amount customers are charged for fuels used to generate electricity;
An increase of 59 cents in the monthly charge used to pay for energy-efficiency and demand-side management programs; and
A decrease of 14 cents per month in the charge for state-mandated renewable energy.

Commercial customers will see an increase of 0.2 percent and industrial customers will see a 0.6 percent increase.

"The merger savings, coupled with declining fuel prices, mean that we are able to pass along lower costs to our customers," said Brett Carter, Duke Energy's state president -- North Carolina. "We know that even a small decrease is a help to families across the state who rely on our service. We will continue to work to ensure that we provide safe, reliable, affordable and increasingly clean energy to power North Carolina's future."

The fuel portion of the company's rates is adjusted annually by the NCUC to reflect the actual cost of fuel the utility uses to produce electricity to meet customer demand. By law, Progress Energy does not make a profit from the fuel charge.

The company also files annually to recover the costs of implementing programs designed to help reduce energy consumption and save customers money on their energy bills, and for costs associated with the utility's renewable energy investments.

Under North Carolina's energy law passed in 2007, Progress Energy must provide an increasing percentage of energy sales from renewable resources. The requirement grows from 3 percent this year to 12.5 percent in 2021. The company has signed contracts to purchase energy from a number of solar photovoltaic arrays, biofuels facilities and other renewable sources, and continues to evaluate renewable energy opportunities.

Apart from fuel, energy-efficiency and renewable energy expenses, the other main component of customer rates is the base retail rate.

In October, Progress Energy filed a request with the NCUC to increase the base rate portion of customer bills to reflect investments made to modernize the power system and other increased costs of providing service.

The NCUC has scheduled public hearings on that request in February and March 2013. If approved, the increase is expected to take effect in mid-2013.

Progress Energy encourages customers to learn all they can about using energy wisely – to save energy and money. Customers can save up to 20 percent on their energy costs by making simple changes at home. Cleaning air filters, replacing incandescent light bulbs with compact fluorescent bulbs, adjusting the thermostat and sealing windows and doors can result in noticeable savings. Customers can learn about available energy-efficiency programs and incentives at www.progress-energy.com/save.

Progress Energy Carolinas, a subsidiary of Duke Energy, provides electricity and related services to nearly 1.5 million customers in North Carolina and South Carolina. The company is headquartered in Raleigh, N.C., and maintains a diverse generation fleet of more than 12,200 megawatts in owned capacity. PEC serves a territory encompassing more than 34,000 square miles, including the cities of Raleigh, Wilmington and Asheville in North Carolina and Florence and Sumter in South Carolina. More information is available at www.progress-energy.com.

Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information is available at www.duke-energy.com.

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SOURCE Duke Energy