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11/15/2011

Progress Energy Carolinas rates rise 3.7% Dec. 1 in North Carolina

Changes reflect higher costs of fuel and energy-efficiency programs

RALEIGH, N.C.  (November 15, 2011) – Following two years of price reductions, Progress Energy Carolinas customers in North Carolina will pay slightly more for electricity beginning Dec. 1, reflecting increases in the cost of power plant fuel and energy-efficiency programs.

The changes were approved this month by the N.C. Utilities Commission. For a residential customer using 1,000 kilowatt-hours (kWh) per month, the monthly bill will increase $3.81, from the current $102.19 to $106. Even with the increase, the average price is less than it was in 2008. Prices were reduced in 2009 and 2010.

The increase is the net result of changes in three components of the rates N.C. residential customers pay:

  • An increase in the monthly amount customers are charged for fuels used to generate electricity ($2.75 increase on a residential 1,000-kWh bill);
  • An increase of $1.08 in the monthly charge used to pay for energy-efficiency and demand-side management programs; and
  • A decrease of 2 cents a month in the charge for state-mandated renewable energy.

The bill for a typical residential customer will increase 3.7 percent. The increase for a typical commercial customer is 4 percent, and the increase for a typical industrial customer is 3.4 percent.

“We know every dollar counts, particularly for our customers who are struggling in this difficult economy,” said Lloyd Yates, CEO and president of Progress Energy Carolinas, which serves 1.5 million customers, including 1.3 million customers in North Carolina. “We continue to focus on keeping electricity affordable, reliable and environmentally sound for the households and businesses that depend on us.”

Progress Energy uses a diverse mix of power plant resources – including nuclear, coal, natural gas, oil and hydroelectric energy, as well as solar and biofuels – to maintain a reliable supply of electricity for the utility’s customers while keeping fuel expenses as low as possible. Progress Energy Carolinas works around-the-clock to negotiate the lowest price possible for reliable fuel contracts on behalf of customers.

The fuel portion of the company’s rates is adjusted annually by the Utilities Commission to reflect the actual cost of fuel the utility uses to produce electricity to meet customer demand. By law, Progress Energy does not make a profit from the fuel charge. The company also files annually to recover the costs of implementing programs designed to help reduce energy consumption and save customers money on their energy bills, as well as the portion in customer rates that pays for renewable energy investments.

Under North Carolina’s energy law passed in 2007, Progress Energy must provide an increasing percentage of energy sales from renewable resources. The requirement grows from 3 percent in 2012 to 12.5 percent in 2021. The company has signed contracts to purchase energy from a number of solar photovoltaic arrays, biofuels facilities and other renewable sources, and continues to evaluate renewable energy opportunities.

Apart from fuel, energy-efficiency and renewable energy expenses, the other main component of customer rates is the base retail rate. Progress Energy Carolinas has not sought an increase in the base rate since 1988.

Progress Energy encourages customers to learn all they can about using energy wisely – to save energy and money. Customers can save up to 20 percent on their energy costs by making simple changes at home. Cleaning air filters, replacing incandescent light bulbs with compact-fluorescent bulbs, adjusting the thermostat and sealing windows and doors can result in noticeable savings. Customers also can learn about energy-efficiency programs and incentives at www.progress-energy.com

Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 22,000 megawatts of generation capacity and approximately $10 billion in annual revenues. Progress Energy includes two major electric utilities that serve about 3.1 million customers in the Carolinas and Florida. The company has earned the Edison Electric Institute's Edison Award, the industry's highest honor, in recognition of its operational excellence, and was the first utility to receive the prestigious J.D. Power and Associates Founder's Award for customer service. The company is pursuing a balanced strategy for a secure energy future, which includes aggressive energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system. Progress Energy celebrated a century of service in 2008. Visit the company’s website at www.progress-energy.com.

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