Duke Energy Progress, LLC
Application of Duke Energy Progress, LLC, for Adjustment of Rates and Charges Applicable to Electric Service in North Carolina and for Performance Based Regulation
Docket No. E-2 Sub 1300

On October 6, 2022, Duke Energy Progress, LLC (DEP), filed an application with the Commission requesting authority to adjust and increase its rates and charges for electric service in order to produce an additional $623.5 million in retail base revenues, an increase of about 18.0% over current revenues. DEP requested approval of an application for performance-based regulation that allows DEP to adjust its base rates over three years in addition to the general base rate increase, a residential decoupling mechanism, an earnings sharing mechanism, and a performance incentive mechanism. The first-year increase would be partially offset by an $8.5 million refund of excess deferred income taxes resulting from the 2017 Federal Tax Cuts and Job Act and a reduction in North Carolina’s state-corporate tax rate.

Additionally, DEP is requesting approval of the following riders:

• Earnings Sharing Mechanism (ESM) Rider
• Residential Decoupling Mechanism (RDM) Rider
• Performance Incentive Mechanism (PIM) Rider
• Customer Assistance Program (CAP) Rider
• Customer Assistance Recovery (CAR) Rider

In its application, DEP stated that its request is driven by investments made since its 2019 rate case, E-2, Sub 1219, including:

1. investments in existing nuclear plants to enhance safety, reliability, and efficiency, and to preserve their performance and reliability over their extended life operations;
2. new investments in traditional and renewable generation and storage assets;
3. continued investments to maintain remaining coal-fired generation and hydroelectric generation;
4. the addition of three battery installations;
5. ongoing work to retire and close existing coal-fired units;
6. adding new carbon free technologies such as solar and storage; and
7. upgrading transmission and distribution systems to be more reliable, resilient, and supportive of renewable technologies.

Additionally, DEP is requesting an accounting order for approval of:

1. ongoing regulatory asset treatment of the costs for environmental compliance related to the closure of coal ash basins;
2. continued deferral of bad debt expense related to the COVID-19 pandemic;
3. deferral of a portion of the impact associated with updated depreciation rates for its coal plants;
4. deferral of costs associated with implementing customer service programs;
5. deferral of storm costs; and
6. deferral of certain costs related to a new performance incentive mechanism dashboard.

DEP also proposed a customer assistance program for eligible low-income customers, a tariffed-on-bill program, and the payment navigator program.

The Commission has scheduled five public witness hearings to receive testimony from DEP’s customers, as well as an expert witness hearing beginning May 1, 2023, for testimony and cross-examination of expert witnesses. There will not be an opportunity for public comments at the expert witness hearing, but the public is welcome to attend.

Additional Information:

• You can find information about providing testimony at a public hearing here.
• Weapons are strictly prohibited at Commission hearings, and everyone entering the building must pass through a metal detector.
• Customers can also file written statements with the Commission here or by mailing comments to the address below. In either case, be sure to put the docket number of this proceeding in the subject line. After two or three business days, written comments become part of the official record and can be viewed via this website under the docket number.
• The Public Staff – North Carolina Utilities Commission is a separate, independent agency that represents the using and consuming public in matters before the Commission, including rate change requests like this one. For more information, please visit the Public Staff’s website linked here.