Coal Ash Wednesday: Duke Energy rate increase begins June 1st

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It could have been much worse, but it's still not necessary:

Duke Energy Progress electric rates will increase by an average of 4.7% across all customer groups, effective June 1. The annualized bill for a typical residential customer using 1,000 kilowatt-hours (kWh) of electricity per month will increase to $119.83 from the current $113.53 over the next two years.

The specific increase for individual customer groups will vary, depending on the rate they pay. The average rate increase will be 5.3% for residential customers, 4.7% for commercial customers and 3.6% for industrial customers.

Duke Energy pays out about 75% of its earnings in stockholder dividends, and those dividends have grown by almost 10% in the last 3 years. In actual dollars paid to investors, it's now roughly $2.8 Billion, per year. Which makes this almost laughable:

The NCUC approved several Duke Energy proposals to reduce the impact of rising costs on low- and fixed-income customers. Duke Energy shareholders will contribute $6 million over two years to the Helping Home Fund to provide energy- and cost-saving measures to North Carolina customers, $5 million over two years to the Duke Energy Carolinas Share the Warmth program and $5 million over two years to the Duke Energy Progress Energy Neighbor Fund to provide billing assistance to low-income customers.

The people who are helped by these programs probably wouldn't consider them pointless. But in the overall scheme of things, they are.

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Comments

Understand, there is nothing inherently wrong

in paying quarterly dividends to shareholders. Any healthy portfolio should include dividend-paying stocks, especially for those folks who are retired with Social Security and maybe a modest pension.

That being said, Duke is a public utility, and the overall financial strength of the company should be an integral part of any rate increase decision. The state has agreed to ensure a profit, but it didn't (unless I missed it) agree to a constant increase in said profits. Duke has built into its system an annual increase of about 3% in dividend yield, something the NCUC is not obligated to facilitate.

I can't make it any plainer than that. And I shouldn't have to bring it up at all, frankly.