Why Duke Energy customers should expect bills to rise rapidly in years to come

RALEIGH, N.C. — Duke Energy utility bills will go up faster than inflation for the next five years and are likely to be among the largest bill increases in the nation, says a new report by analysts for Sector and Sovereign Research.

Actual rates for utilities in the nation’s largest power company, ranked by customers, are likely to go up even faster than the bills. But Duke will be able to mitigate the impact on customers because of strong customer growth, particularly in its Carolinas and Florida utilities, and other factors generally involving scale and efficiency.

Eric Selmon and Hugh Wynne, who together head the Utilities and Renewable Energy team for SSR, evaluated the capital spending plans and other factors that affect rates at 31 of the nation’s leading utility companies.

“Our forecast rates of increase in rates and bills represent a substantial acceleration from those experienced over the last five years (2013-2018),” the analysts write in Will Accelerating Rate Base Growth Hit a Barrier in Rising Customer Bills, a 20-page report issued Monday. They say that, overall, rates will increase 2.9% annually from now through 2023 and that bills will increase 2.1% each year. Over the last five years, rates increased 2% a year and bills increased just 1% annually.

Duke customers will see bills increase by 2.5% annually through 2023, according to the report. That puts Duke above the projected average increase and the 10th-highest average bill increase in the nation. While it is significantly less than the highest bill increase projected — 3.8% a year at Public Service New Mexico — it is well above the current U.S. rate of inflation of 1.6%.

Duke spokesman Jeff Brooks concedes that the company expects a string of rate hikes at its electric utilities in the Carolinas, Florida and the Midwest over the next several years.

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Cox Media Group