CHARLOTTE — Duke Energy electric customers in North Carolina will see a new line-item charge on their bills to repay $1 billion in special bonds the company issued last week to repay the company for its infrastructure repairs after 2018 and 2019 storms.
Starting with December’s bills, a storm-recovery rider will be charged to the 3.5 million electric customers that the Charlotte-based utility serves in the state to cover $1.3 billion in principal and interest that’s now due over 20 years, Duke Energy announced Thursday.
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In late 2019, the North Carolina legislature granted Duke Energy the ability to cover the storm costs for rebuilding the electrical system, repairing transformers and completing other projects through issuing the debt.
Such borrowing will cost $300 million less than had the company’s two electric subsidiaries in the state sought repayment through conventional rate increase requests with the state Utilities Commission, the company said. That’s because the bond interest rate is less than the investment return that Duke Energy would be granted by law and the commission on its activities. Through using normal rate-paying channels, the overall cost would have been $1.6 billion for customers, the utility said.
Still, the average residential customer of Duke Energy Progress, which generally serves eastern North Carolina — including Raleigh and Wilmington — and portions of the mountains like Asheville, will see bills increasing by $2.44 per month. For Duke Energy Carolinas, which covers the Greensboro and Charlotte areas, along with far-west portions of the state, the monthly rider for the average residential customer will be 49 cents.
“Our first priority is to safely restore service to our customers, which we achieved quickly and efficiently, substantially limiting outage time,” Stephen De May, Duke Energy’s North Carolina president, said in a news release. “We are also constantly mindful of customer bills, so we’re very pleased this new cost recovery tool enabled us to drastically reduce storm repair costs for our customers.”
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The Duke Energy Progress rider is higher because the damage was greater in eastern North Carolina, particularly with hurricanes Florence and Dorian and winter storm Diego. The bonds also cover repayment of repairs after Hurricane Michael.
Customers already see line-item surcharges on their bills, such as one for renewable energy initiatives.
(Watch the video below: Duke Energy rate hikes for all NC customers going into effect)
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The Associated Press contributed to this report.