N.C. weighs having utilities share fuel-cost risk

Summary

North Carolina advocates want utilities to absorb part of fuel-price swings now passed fully to customers.

Why this matters

Fuel costs have been a major driver of recent Duke Energy bill increases in North Carolina. The debate could affect future utility rates, transparency for customers, and how quickly utilities shift away from natural gas.

Volatile oil and natural gas prices, driven by conflict, weather, policy changes, and pipeline outages, have renewed calls in North Carolina for utilities to absorb part of those costs instead of passing them entirely to customers.

Advocates said a policy known as fuel-cost sharing could lower bills and encourage Duke Energy to rely less on natural gas and more on wind, solar, and battery storage. Most states with vertically integrated utilities, including North Carolina, allow utilities to pass 100% of fuel costs to ratepayers.

“Fuel dependence creates vulnerability — whether it’s gasoline for your car or natural gas for your power plants,” said Josh Brooks, chief of policy strategy and innovation for the North Carolina Sustainable Energy Association. “Tying costs to volatile commodities means a lot of risk exposure for ratepayers. That’s an issue both regulators and policymakers should take up.”

Customers paid the full impact of higher gas prices after Russia invaded Ukraine in 2022. Duke does not identify fuel charges separately on bills; instead, they are included in a broader line item.

A Change.org petition calling for an independent audit of Duke and refunds for any improper charges had drawn more than 73,000 signatures.

“Unexpected and unexplainable increases in Duke Energy bills have become a major concern for many families,” the petition said. “When bills rise without reasonable justification or transparency, it impacts our ability to plan and manage our household finances effectively.”

The average Duke Energy household bill rose nearly 45% since 2020, according to an analysis by the Energy and Policy Institute. The Environmental Defense Fund said fuel costs accounted for 67% of rate increases from 2017 to 2024 in Duke’s central North Carolina territory, and 46% in the rest of the state. While fuel costs fell last year, they remained about double 2017 levels.

Duke Energy disputed the extent of the impact.

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