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North Carolina

Funding New Power Plants

Should consumers or investors pay?

 
Karen Tucker looks at bills, North Carolina AARP utility training

Karen Tucker, 54, of Reidsville, is among the AARP volunteers who will receive training on how to fight an expected legislative proposal by utility companies that could lead to higher electricity rates. — D.L. Anderson

Illness forced Karen Tucker, 54, of Reidsville into early retirement from her job as a registered nurse, but she hasn't stopped helping people. This month, she'll attend an AARP training session to learn how to fight an expected proposal that could lead to higher rates for electricity.

AARP North Carolina is concerned that the General Assembly will follow the lead of states that allow utilities to more easily pass on power plant construction costs to customers.

That would hit people on fixed incomes hardest, especially the more than 1.2 million North Carolinians who are 65 or older.

Fixed incomes but not fixed bills

Paying for essentials is already difficult for Tucker and many older adults she talks to at church and through her volunteer work.

"They'd say, 'We don't have enough money to pay our utility bills.' Or 'I'm going to have to leave my house and go live with my daughter or find someplace to go,' " said Tucker, whose electric bill has been as high as $300 a month.

Duke Energy, which increased its rates 7.2 percent in February, wants a change in North Carolina's "Construction Work in Progress" law, which requires full rate hearings before construction financing costs are passed on to consumers.

Duke wants a streamlined rate-hike process that looks only at construction financing costs, not all aspects of its rate structure. Rate hearings are lengthy, and the cost of the extensive hearings is ultimately borne by customers, according to Betsy Conway, a Duke Energy spokeswoman.

Consumer advocates worry that the shorter process would give consumers less opportunity to fully review proposed rate hikes and raise objections.

Because of its recent merger with Progress Energy, Duke Energy has not yet set its agenda for the legislature's 2013-14 session. But Conway made it clear the company will seek the change eventually.

"The ability to recover financing costs during plant construction helps keep the cost of borrowing money lower, which, in turn, lowers the overall cost of the plant," she said.

Developing new electricity-generation plants and upgrading older ones is as necessary as planning for new schools when the population is increasing, she said.

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Lark McCarthy discusses the current state and problems of energy deregulation with Ken Malloy, executive director of the policy group CRISIS & Energy Markets, and Tyson Slocum, director of Public Citizen Energy Program.

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