We’ve been contacted by several members with concerns about Duke Energy’s connect fees. Below is the text from communication sent by Duke Energy representatives to AANC’s Ken Szymanski and also communication between AANC and the North Carolina Utilities Commission:
Communication from Duke to AANC:
Duke Energy Carolinas will charge a $15 non-refundable connect fee for all metered residential and non-residential customers each time a new account is established beginning September 30. This fee will include temporary and permanent service applications, as well as Revert to Owner customers.
There is a cost to Duke Energy to establish an electric service account; this cost covers field activity to install, connect or read the meter, and the administrative work for creating a new account. Currently, this cost is passed on to all customers. By charging a connection fee only to those customers who establish a new account, Duke Energy is working to keep the overall cost lower for all customers.
For more information, customers can log in their My Duke Energy Portal to learn more. Duke Energy also continues to offer turnkey lighting service and equipment, rebates and incentives, and other tools and resources at builders’ and property managers’ fingertips at www.duke-energy.com/builders-developers.
Communication from AANC to NCUC:
Our members were startled this week to learn of a new, unannounced Duke Energy Connect Fee of $15 per electricity service account. Duke Energy’s staff related that this was part of the Settlement with NCUC to hold the line on rate hikes by shifting these connection costs to the users as a user fee. I just want to make sure that you and the Public Staff knew about this; our members obviously did not. See the note below from Duke Energy’s Customer Experience Leader, John Lincoln.
We would argue that this Connect Fee is at least somewhat regressive, because of the socio-economic characteristics and relative residential mobility of the population asked to pay it.
Communication from NCUC back to AANC:
Yes, the Public Staff knew about this. It was part of the Company’s prefiled testimony, available to the public well before the hearing. Our witness felt the original change proposed by Duke could have been applied in an unduly broad manner. We recommended narrower wording to more closely limit the charge to instances where it reflected a cost initiated by the customer. Duke accepted our recommendation as part of the settlement.
The Public Staff did not contest the amount of the proposed charge (as opposed to its applicability) because it appeared to be based on actual costs incurred by the Company. Without Duke’s new charge, the cost of new service connections would be paid by all customers. This would be less noticeable on a per customer basis, but result in customers who are not causing the cost to be paying for it. In the Public Staff’s view, it is reasonable to have the customers responsible for new service connection costs to pay those costs rather than for other customers to subsidize them. To the extent that people who change their electric service more often are lower income, this would impact them. Personally speaking, I am concerned about any additional financial burden on low income people. At the same time, our ratemaking process is largely oriented toward charging utility costs to the customers responsible for those costs. With narrow exceptions the Public Staff does not recommend ratemaking for purposes of reallocating cost responsibility away from low income customers. However, in this regard, I would note that the Public Staff was able to achieve a very unusual $10 million donation from Duke shareholders toward low income energy assistance as part of the settlement in this case.
We would be glad to discuss this further if you wish.
We will continue to update you as we continue to learn more about this issue.