And the unnecessary and overly-expensive Cliffside coal plant is partly to blame:
The increases are keyed to more than $7 billion in plant construction and other capital costs planned over that span. “We expect the next rate case to be smaller,” Carter says. That increase, which Duke would expect to see take effect in 2014, should not include as much for construction at Cliffside, for instance, although it will include the costs of another natural gas plant.
Another part of this (mismanaged) equation is proof positive that claims Cliffside opponents made, that the coal-burning monster wasn't needed, were correct:
The way rates are set in North Carolina, a utility uses the previous year’s sales as a base for estimating future sales. But the 2009 recession seriously reduced electricity demand across the board. Demand has not yet returned to 2008 levels.
In projecting where to set Duke’s in the 2009 case, the commission used projections based on 2008. With lower sales, Duke has a smaller pool to recover its fixed costs from. So part of the increase is sought to account for that difference.
In plainer terms, Duke's baseload demand has dropped. Considerably. Which is one reason why they've been trying to recruit power-hungry data centers to North Carolina, so all that surplus power generation capacity will be utilized (sold).
I can think of no better example to highlight the Legislature's lack of wisdom in bringing back Construction Work In Progress (CWIP) via SB3 a few years ago. Duke wins (and we lose) either way: They get their rate increases even when there's a power glut.
The Free Market fundies ought to be going ballistic over this, but since this money is funding dirty power instead of clean, they'll keep their mouths shut. Making them not only naive, but hypocrites, as well.