Duke Energy Carolinas LLC and several intervenors have reached a settlement agreement in the utility's North Carolina rate case that calls for limiting the duration, cost recovery and scope of its planned grid investments.
In the agreement reached with environmental groups, the Duke Energy Corp. subsidiary also committed to deploying 300 MW of energy storage on its system no later than May 2026. In addition, Duke Energy Carolinas, or DEC, committed to investing no less than $25 million in electric vehicle charging stations in its North Carolina service territory by 2021.
DEC in August 2017 filed for an overall $647 million electric rate increase, including $36 million tied to cost recovery for grid investments.
The rate case was filed after Duke Energy in February 2017 laid out a $37 billion growth capital plan tied to grid investments and smart meter deployment.
The stipulation signed by DEC, the Environmental Defense Fund, the Sierra Club and the North Carolina Sustainable Energy Association allows the utility to recover costs from its planned Power/Forward Carolinas grid modernization initiative through a pilot, three-year rider.
Costs tied to targeted undergrounding of power lines, cable and conduit replacement, and power pole replacement would be deferred until DEC's next base rate case. The utility, however, will be able to recover the costs of five demonstration projects tied to burying outage-prone overhead power lines through the pilot rider, subject to a $50 million cap. All of these expenses are subject to preapproval from the North Carolina Utilities Commission.
All costs incurred during the pilot program would be subject to a 4.5% cumulative cap of total annual electric revenue. At the end of the three-year pilot period, DEC may petition state regulators for an extension.
DEC also reached a partial settlement agreement with commercial intervenors, including Food Lion LLC, Sam's East Inc. and Walmart Stores East LP.
The commercial group said it "does not oppose nor expressly support the terms" of the settlement DEC reached with environmental intervenors. The group, however, does support the electric vehicle and battery storage projects, as well as enhancements to customer information systems for customer data access.
Duke Energy subsidiary Duke Energy Progress LLC made a separate commitment to deploy 175 MW of energy storage on its system by 2026 and invest $17 million in electric vehicle charging stations. The terms would be laid out in Duke Energy Progress' next rate case proceeding, conditional on regulatory approval of DEC's stipulation.
(NCUC docket E-7, Sub 1146)
