RALEIGH — A North Carolina Court of Appeals decision found that the North Carolina Utilities Commission improperly approved a rate increase for Duke Energy Carolinas customers in 2024, but a new law means customers can’t recover those costs.
The rate at the heart of this case is the annual fuel rider. Every year, the NCUC approves a fuel rider for our bills based on how much Duke Energy over or underspent on fuels and fuel-related costs in the previous year and how much they anticipate spending in the upcoming year.
In the 2023 fuel rider-rate case, Duke Energy reported $988M in under recoveries from 2022, a year in which natural gas costs reached a 14-year high. The 2023 rates were set in the hopes of recovering those losses but by the end of the year, Duke Energy reported an additional $8M in under recoveries.
In the 2024 fuel rider-rate case, Duke Energy requested a rate that combined the $8M in under recoveries from 2022 to $11.1M in under recoveries from 2023. The NCUC approved this request.
Public Staff, the independent representative for ratepayers in NCUC cases, appealed the decision claiming Duke Energy should not be able to look back further than one year in determining the appropriate fuel rider rate.
The Court of Appeals agreed, but while the Public Staff requested a refund for customers, the court declined, citing a 2025 law, SB 266, the Power Bill Reduction Act, that now allows Duke Energy to make multi-year recoveries. In their reasoning, the court explained if customers got a refund, Duke Energy could once again add those losses to future rate cases making up the difference again.
We spoke with Duke Energy spokesman Bill Norton, who said the case was never a matter of whether those rates were prudent for cost recovery but whether the company could change the rates at that specific time. He also reiterated that these fuel rider rates do not produce a profit for Duke Energy.
“The law is clear, customers must pay what we pay, no more, no less,” Norton said in a statement.
Matt Abele with the North Carolina Sustainable Energy Association said cases like this reveal the true cost of relying on natural gas and coal-fired power plants, when fuel prices go up, ratepayers bear the burden.
“At the end of the day, the shareholders at the at the utility bear very little risk around these decisions and you and I, the customers who are paying their utility bills every single month, are having to pay the cost for those decisions,” he said.
Norton said natural gas is and will continue to be a major part of North Carolina’s electric grid, as it provides on-demand power 24/7 that helps balance renewable sources like solar. He stressed Duke Energy works to prevent price volatility by working to diversify its power sources.
“This diverse mix includes significant investments in solar and storage, which stores energy when demand is low and can help offset fuel costs for our customers,” he said.
He also said that while the fuel rider does go up when fuel prices are high, it also comes down.
“Duke Energy Carolinas customers in North Carolina received rate reductions in 8 out of 10 years (2012-21) before the 2022 increase,” he said.
Ultimately, Abele said what matters is that in a regulated monopoly system like ours, ratepayers don’t have much of a say in how these prices rise and fall. He said he’d like to see the utility absorb some of that price shock.
“If they’re under projecting how much fuel costs for their plants, and those costs come back significantly higher than those projections, well, the utility and their shareholders should be liable for covering some of those costs,” he said.
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