- Duke Energy CEO Lynn Good told analysts on Thursday that the company will seek rehearings for recent cuts approved by South Carolina regulators to rate hikes proposed for the company's utility subsidiaries.
- Good highlighted a potential appeal of the coal ash recovery costs and return on equity (ROE) percentages that the South Carolina Public Utilities Commission approved for Duke Energy Progress and Duke Energy Carolinas. Regulators voted to disallow the company from recovering more than $600 million from South Carolina customers for coal ash costs regarding the Dan River spill in North Carolina.
- The company has also filed an appeal challenging North Carolina regulators' decision to require the excavation of all its coal ash ponds in the state. The appeals process, which Good said could take nine to 12 months, takes place in addition to a legislative effort to prevent Duke from recovering coal ash costs in North Carolina.
The recent rate case decisions are expected to impact Duke's plans for growth at a time the company is planning to expand within South Carolina.
Duke is trying to acquire state-owned utility Santee Cooper, having placed competing bids with NextEra Energy and other interested parties.
"We will closely evaluate further investing in [South Carolina] in light of these directives, but those decisions are yet to be made," Good said during the Q1 earnings call.
DEP and DEC were each granted a 9.5% ROE in South Carolina, as opposed to the requested 10.5%. Attorneys participating in the rate case proceedings told Utility Dive that the regulators' decision could influence rate cases for DEP and DEC in neighboring North Carolina. Good refuted that claim during analyst questions.
"I think it's premature to reach a conclusion on cases yet to be filed in North Carolina on how South Carolina is going to invoice now," she said.
"We do intend to request a rehearing on the coal ash and the ROE item as well as potentially some others," in addition to considering an appeal of the South Carolina rate cases once the DEC and DEP orders are out, Good said.
Regarding coal ash, South Carolina regulators approved steep cuts to the amount that customers must pay for clean ups of the toxic waste. According to Office of Regulatory Staff (ORS), the percentages of allowed recovery were based on the amount of consumers in the service area.
|Utility||Requested Coal Ash Recovery
(NC & SC)
|Disallowed Coal Ash Recovery
(NC & SC)
|Allowed Coal Ash Recovery
(NC & SC)
|Estimated Coal Ash Recovery (SC retail)|
|Duke Energy Carolinas||$876 million||$470 million||$406 million||$122 million|
|Duke Energy Progress||$635 million||$333 million||$302 million||$26 million|
|Total||$1,511 million||$803 million||$708 million||$148 million|
Figures represent approximates anticipated in the order based on the disallowances announced in PSC's respective directives.
Duke is also facing coal ash challenges in North Carolina where the state legislature filed a bill in April that would prohibit the company from recovering clean up costs from ratepayers. The bill is not expected to pass, facing opposition from a Republican majority.
South Carolina regulators also voted to cut the amount that customers would pay toward Duke's executive compensation, disallowing 75% of Good's compensation and 50% of the compensation of the next three highest executives.
While Duke might contest that aspect of the order, "It’s not likely to actually result to any pay cut ... other shareholders can make up the pay," Gudrun Thompson, senior attorney for the Southern Environmental Law Center, told Utility Dive. "It's more symbolic."
CORRECTION: A previous version of this article misstated the allowed coal ash recovery. Figures were updated to accurately reflect ORS testimony.