Duke Energy Carolinas, a subsidiary of
Duke Energy Corporation
(
DUK
), reached a compromise solution with the Office of Regulatory
Staff (ORS); the Commission of Public Works for the city of
Spartanburg, South Carolina; and the Spartanburg Sanitary Sewer
District; with respect to the utility's request to raise base rates
in South Carolina.
On conciliatory terms, Duke Energy will slash its proposed 15%
base rate increase for South Carolina to 6%. Added to it Duke
Energy will also contribute $4 million to a limited liability
company, AdvanceSC, to improve its South Carolina service area in
terms of economic development, low income assistance, education
initiatives, and existing manufacturing support.
However, the compromised agreement is pending approval from the
Public Service Commission of South Carolina (PSCSC). If approved,
the average rate increase would be 5.98%. If cleared by the PSCSC,
new rates would go into effect in February 2012. The
agreement will be considered by the PSCSC during a scheduled
hearing on December 7, 2011.
If the commission approves the deal, residential customers will
see their rates rise about 7.1%, adding about $6.25 to the average
monthly bill. Commercial customers will witness a 5.2% increase.
Industrial customers will see a 5.1% hike.
Duke Energy Carolinas owns nuclear, coal-fired, natural gas and
hydroelectric generation. That diverse fuel mix provides
approximately 19,000 megawatts of electricity to approximately 2.4
million customers in a 24,000-square-mile service area of South
Carolina and North Carolina.
Charlotte, North Carolina-based Duke Energy is a diversified
energy company with a portfolio of domestic and international,
natural gas and electric, regulated and unregulated businesses
which supply, deliver, and process energy for customers in North
America and selected international markets.
Duke Energy focuses on core utility operations to build its rate
base through capital expenditure investments. Looking forward, our
favorable opinion also stems from the ongoing merger deal with
Progress Energy Inc.
(
PGN
). The merger is expected to be completed by the end of fiscal
2011. The company presently retains a short-term Zacks #2 Rank
(Buy). We have a long-term Neutral recommendation on the stock.
DUKE ENERGY CP (
DUK
): Free Stock Analysis Report
PROGRESS ENERGY (
PGN
): Free Stock Analysis Report
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