Duke Energy settlement agreement paves way for smarter energy future
- Settlement includes investments in grid modernization, smart meters, solar, electric vehicle charging stations, battery storage and new programs to enhance customer choices
- Settlement avoids $4.65 per 1,000 kWh in monthly residential bills beginning Jan. 2018
ST. PETERSBURG, Fla., -- Duke Energy Florida received approval from the Florida Public Service Commission (FPSC) today to move forward with its settlement agreement that will pave the way to a smarter energy future for Florida customers. The company also received approval for its fuel, capacity, energy conservation and environmental costs.
The settlement agreement, which was filed in August 2017, includes investments in solar energy, smart meters, grid modernization projects to enhance reliability and make the grid more resilient and secure, and optional billing programs to enhance customer choices. The agreement also includes plans to install electric vehicle charging stations and a battery storage pilot program. The company will also no longer move forward with the Levy County nuclear project and customers will not pay any further costs associated with the project. More details regarding the settlement agreement are available on our News Center.
"This settlement agreement allows us to move forward and deliver what our customers and stakeholders have told us they want from their energy provider," said Harry Sideris, Duke Energy Florida state president. "We will be able to provide cleaner, more reliable energy along with more information, allowing our customers to better manage their energy needs."
Beginning January 2018, the residential rate will be $123.88 per 1,000 kWh. This includes a reduction of $4.65 per 1,000 kWh as a settlement benefit. The portion of Duke Energy Florida's typical residential, commercial and industrial customer bills associated with the settlement will increase approximately 1 to 3 percent annually in 2019-2021; about the same as general inflation rates.
The settlement agreement was developed with representatives of various consumer groups, including the state's Office of Public Counsel, the Florida Industrial Power Users Group, the Florida Retail Federation, White Springs Agricultural Chemicals, Inc. d/b/a PCS Phosphate and the Southern Alliance for Clean Energy.
The agreement will take effect in January 2018 and will include investments of nearly $6 billion over the next four years while minimizing the impact on customer bills.
Based on approvals, customers' bills will reflect the following in 2018:
- Fuel Costs – increased by $4.61 (from $33.77 to $38.38), which is a reduction from $7.14 originally proposed on August 24. The reduction is a result of the settlement, which allows for spreading the costs for under-recovered fuel of approximately $196 million over a two-year period (rather than one year). The company makes no profit from fuel.
- Capacity Cost Recovery Clause – increased by $1.43 from $11.38 to $12.81per 1,000 kWh due to an increase in purchased power costs and a 2017 under-recovery.
- Energy Conservation Cost Recovery Clause – increased by 11 cents from $3.17 to $3.28 per 1,000 kWh.
- Environmental Cost Recovery Clause – increased by 6 cents from $1.51 to $1.57 per 1,000 kWh due primarily to a smaller over-recovery included in 2018 rates compared to 2017.
- For the Nuclear Cost Recovery Clause, Duke Energy filed for a slight decrease from $1.56 to $1.52 per 1,000 kWh for the power uprate project at the Crystal River Nuclear Plant in Citrus County. Customers will see immediate benefits from the settlement agreement in 2018 with the removal of the Levy County nuclear project of $2.50 per 1,000 kWh.
About Duke Energy Florida
Duke Energy Florida owns and operates a diverse generation mix, including renewables, providing about 8,800 megawatts of owned electric capacity to approximately 1.8 million customers in a 13,000-square-mile service area.
With its Florida regional headquarters located in St. Petersburg, Fla., Duke Energy is one of the largest electric power holding companies in the United States. Its Electric Utilities and Infrastructure business unit serves approximately 7.5 million customers located in six states in the Southeast and Midwest. The company's Gas Utilities and Infrastructure business unit distributes natural gas to approximately 1.6 million customers in the Carolinas, Ohio, Kentucky and Tennessee. Its Commercial Renewables business unit operates a growing renewable energy portfolio across the United States.
Duke Energy is a Fortune 125 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.
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