A group of large industrial Duke Energy Progress customers has withdrawn its challenge to an upcoming program that will provide low-income customers with monthly discounts on their electric bills.
On Wednesday, The News & Observer reported that the industrial customers were objecting to being charged $1.70 a month to help poor people. On Thursday, the industrial customers reversed that position.
An attorney for the Carolina Industrial Group for Fair Utility Rates II — known as CIGFUR — told the N.C. Utilities Commission on Thursday it had reached a settlement with advocates for low-income customers and Duke Energy Progress. The Utilities Commission approved the program as part of a rate case that will see Duke Energy Progress bills increase over the next three years.
“I’m glad that we get to get back to focusing on this pilot program and then over the next three years we’re going to work on making it better,” Claire Williamson, an N.C. Justice Center energy policy advocate, told The N&O.
CIGFUR agreed to withdraw a motion to stop the program from starting on Jan. 1 as scheduled and to strike sections addressing the customer assistance pilot from its rate case challenge to the N.C. Supreme Court.
In return, the other parties agreed that over the next four years they will not propose or support a customer assistance program that would require non-industrial customers to pay into it based on how much energy they use. Duke Energy Progress agreed to gather information about the program’s costs and benefits.
Under Duke Energy Progress’ Customer Assistance Plan, customers who are enrolled in the federally funded Crisis Intervention Program and Low-Income Home Energy Assistance Program will automatically receive a $42 monthly credit on their bill. The program was developed by the Affordability Stakeholder Group, a group that brought energy advocates, Duke and large customers together to discuss how to help customers who have a hard time paying their electric bills.
The upcoming program will be funded by a flat $1.70 monthly fee from Duke Energy Progress’ non-residential customers, as well as a fee of $1.57 per 1,000 kilowatt hours for residential customers. During the rate case, Duke officials said residential customers would pay for 86% of the program.
CIGFUR was arguing that because the assistance program solely benefits residential customers, the commission lacked the power to require non-residential customers to fund it. Advocates argued — and ultimately the commission found it possible — that helping customers avoid disconnection will likely save everybody money by keeping Duke from recovering unpaid bills in upcoming rate cases. All customers would contribute to paying those delinquent bills. The dispute was first reported by Energy News Network.
“We’re satisfied to try to put this stage of it behind us through the agreement that we’ve reached with the parties and work going forward to try to get on the same page before these issues ever get to the commission,” Preston Howard, a spokesman and lobbyist for CIGFUR, told The N&O.
The agreement to not pursue customer assistance program funding from non-residential customers based on how much power they use lasts for four years. That means it will cover the next rate case and, therefore, the potential next iteration of the customer assistance program.
Those concessions around the fee structure were important for the industrial customers, Howard said.
“If it was based on a per kilowatt charge, CIGFUR members are huge, huge electric consumers and a per kilowatt charge could be hundreds of thousands dollars,” Howard said.
Howard added that members of CIGFUR III, a group of industrial customers in Duke Energy Carolinas’ service area, have been part of the discussions about challenging the customer assistance fee and share the same concerns as CIGFUR II members.
A similar customer assistance program has been proposed for Duke Energy Carolinas customers as part of that utility’s rate case, which the commission is expected to rule on in December.
The industrial customers will not challenge that program, Howard said, if it is substantially similar to the one moving forward for Duke Energy Progress customers.
In addition to Duke and CIGFUR, parties to the agreement included the Sierra Club and the N.C. Public Staff. The Southern Environmental Law Center represented the Natural Resources Defense Council, the N.C. Housing Coalition, the N.C. Justice Center, Southern Alliance for Clean Energy and Vote Solar in the agreement.
“We know it’s going to be a real life-saver for those customers who struggle most to afford their bills, and we’ll hopefully be in a position to build off of that in the future,” said David Neal, a Southern Environmental Law Center senior attorney who represented advocates in the case.
Another stipulation in the agreement required Duke Energy Progress to track the costs and benefits of the customer assistance program, broken down by residential and non-residential customers. And as part of the ongoing Affordability Stakeholder Group, everyone agreed to try to figure out a way to track the program’s impact on arrearages and disconnections.
The parties also agreed to look for additional ways that federal funding could be used to help provide low-income customers with weatherization of their homes or to make their homes more energy efficient.
As part of its order in the rate case, the commission directed the stakeholder group to develop a tiered customer assistance program, which would potentially offer higher discounts to people with lower incomes. The commission also told Duke Energy Progress to file a report looking at the feasibility and structure of that program.
“We are at the beginning of the process. We do want to look forward and see what it’s going to say about the cost of the program but also how folks are benefiting from it and the value that it’s added,” Williamson said.
This story was produced with financial support from the Hartfield Foundation and 1Earth Fund, in partnership with Journalism Funding Partners, as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.