New analysis: If Duke Energy’s gas plant ambitions are approved, the average residential customer could pay nearly $2,100 more on power bills through 2038

(RALEIGH, N.C. — July 23, 2024) New analysis shows that if Duke Energy succeeds at getting its current plan approved by the NC Utilities Commission the company’s excessive reliance on gas-powered plants could come with a high price tag for customers. This new, forward-looking analysis comes on the heels of a retrospective look at Duke Energy’s rate hike data, which revealed that increases in gas fuel costs accounted for 67% of residential retail rate increases since 2017 in parts of Duke Energy’s North Carolina territory, and nearly 50% in others.

This analysis by leading energy analytics firm EQ Research was commissioned by Environmental Defense Fund (EDF) and comes as Duke Energy is seeking approval to build thousands of megawatts of new gas plants, representing one of the largest and most expensive investments in new fossil fuel power plants of any utility in the country.

“Duke Energy’s own data shows that the company’s reliance on gas is the culprit for 46-67% of rate hikes in the last seven years, and new analysis shows that their insistence on building expensive and unnecessary gas plants will continue to drive up customer power bills,” said Will Scott, EDF’s Southeast Climate and Clean Energy Director. “Duke missed the mark badly on gas prices in the past, and their current numbers indicate they continue to systematically underestimate the financial risks and impacts of their gas ambitions on customers.”

The new analysis used data from Duke Energy’s current proposal combined with predictive pricing modeling for costs of gas and showed that, with high gas prices, Duke Energy Progress customers would see a total increase in residential power bills of $764 from 2024-2031, and $2,094 from 2024-2038. Duke Energy Carolinas customers would see a total increase in residential power bills of $474 from 2024-2031, and $1,291 from 2024-2038.

Analysis further showed that Duke Energy’s modeling underestimates the potential price of gas, leading to an underestimation of the financial risk of their plan for customers. Duke has a track record of underestimating gas prices, specifically during the skyrocketing gas prices from 2021-2023 that are showing up on Duke customers’ bills this year.

EQ’s analysis predicts that Duke’s proposed gas plant additions would exacerbate North Carolina customers’ exposure to gas price shocks. If Duke’s proposed gas plants are approved and constructed, and North Carolina experiences a similarly volatile period for gas prices, the analysis estimates that price volatility alone may result in a typical residential customer in Duke’s DEC service area experiencing a nearly $300 rise in energy costs over a similar two-year period. Cost increases for a DEP customer due to fuel price volatility could approach $500 over two years, more than $20 per month.

“Customers bear all the risks associated with Duke Energy’s power plant fuel costs, while the utility is guaranteed to make approximately 10 percent on building the plants themselves,” added Scott. “There are more affordable, less risky, and less polluting pathways Duke can and should pursue in order to meet North Carolina’s energy needs while protecting NC households from increased exposure to volatile gas prices.”