Duke Energy under pressure to disclose hidden ratepayer costs
An energy watchdog group is pressuring Duke Energy to disclose what could amount to billions of dollars in costs to ratepayers that it kept under wraps until after its takeover of Progress Energy was approved.
Durham-based NC WARN has been running full-page ads in newspapers across the state accusing the Charlotte, N.C.-based company of hiding plans to spend over $2 billion in improvements to its nuclear plants until the merger was finalized. The ad calls on people to contact N.C. Utilities Commission (NCUC) Chair Ed Finley and ask him to force the company to prove the deal benefits ratepayers in open hearings.
The company sold the merger to regulators and ratepayers by making the case that it would save customers $650 million over six years -- an amount that's dwarfed by the estimated costs of the nuclear improvements. The merger created the nation's largest electric utility.
"We're buying ad space because, with a few exceptions, the news media has failed to apprise the public about the billions in hidden merger costs -- which is utterly more important than the CEO melodrama," says NC WARN Executive Director Jim Warren, referring to the controversy over the Duke board's decision to fire incoming CEO Bill Johnson, the former chief of Progress Energy, shortly after the merger was approved and to replace him with former Duke CEO Jim Rogers.
NC WARN is awaiting a ruling by the NCUC on its recently filed legal motion to reopen the merger hearings to learn more about billion of dollars in planned repairs to Progress Energy's broken Crystal River nuclear plant in Florida as well as rumors that Duke plans to invest billions in SCANA's Summer nuclear construction project in South Carolina.
Shortly after the merger was finalized, the Triangle Business Journal reported that Duke Energy was planning to spend $2 billion in nuclear upgrades. That amount includes more than $900 million to be spent on plants in North Carolina, with about $347 million of that going toward Progress Energy's Shearon Harris plant near Raleigh, which earlier this month was hit with two apparent violations from the Nuclear Regulatory Commission over maintenance issues.
Last week the NCUC ordered Duke Energy and Progress Energy to disclose some of the special deals they cut with major customers immediately prior to the merger. NC WARN and media outlets had filed motions with the commission calling for disclosure and arguing that shielding the agreements from public view violates the state Public Records Act.
The NCUC and state Attorney General Roy Cooper (D) have launched investigations into the merger. The commission has hired Anton Valukas, a former federal prosecutor, and Jenner & Block, the Chicago-based law firm he now heads, to look into whether Duke Energy misled regulators.
(Image above is a detail from the NC WARN ad, with art by Durham-based political cartoonist V.C. Rogers.)
Sign up for our free newsletter for the latest news, trends & analysis.