Duke Energy Carolinas, LLC
Application for Adjustment of Rates and Charges Applicable to Electric Service in North Carolina and for Performance Based Regulation
Docket No. E-7 Sub 1276

On January 19, 2023, Duke Energy Carolinas, LLC (DEC), 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 $833.2 million in retail base revenues, an increase of about 16.7% over current revenues. DEC has requested that this increase take place in three steps that include a general rate base increase and a multi-year rate plan (MYRP) filed pursuant to N.C. Gen. Stat. § 62-133.16 and Commission Rule R1-17B. DEC has requested approval of an application for performance-based regulation that allows DEC 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 four performance incentive mechanism. The first-year increase would be partially offset by an $10.4 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, DEC is requesting approval of the following riders:

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

In its application, DEC 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. ongoing work to retire and close existing coal-fired units;
5. adding new carbon free technologies such as solar and storage; and
6. upgrading transmission and distribution systems to be more reliable, resilient, and supportive of renewable technologies.

Additionally, DEC 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;
6. deferral of impacts related to the Inflation Reduction Act; and
7. deferral of certain costs related to a new performance incentive mechanism dashboard.

DEC 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 DEC’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.

The July 26, 2023, public witness hearing will be held remotely via Webex, beginning at 6:30 p.m. A link to view the hearing will be available at www.ncuc.gov.

Members of the public that would like to testify must register in advance of the hearing, no later than 5:00 p.m. on Wednesday, July 19, 2023.

To register, please complete the electronic Remote Public Witness Registration form located on the Commission’s website at www.ncuc.gov/hearings/remotepublicregister.html.

Only the first 20 individuals registered by 5:00 p.m. on Wednesday, July 19, 2023, will be allowed to testify at the July 26, 2023,remote public witness hearing. This hearing will be canceled if no one registers to testify by 5:00 p.m. on July 19, 2023.

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 via 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.