Duke exec: renewable energy regulations needed

GSA Business
October 18, 2013

By Scott Miller
smiller@scbiznews.com

Regulators and utilities should move cautiously toward a plan that incorporates renewable energies, particularly solar power, into the mix of electricity delivered to consumers without raising costs, an executive with Duke Energy said Thursday.

“Getting the rules right, now, allows the economic impacts of solar to spread throughout the Carolinas. No final set of rules is going to make everyone happy, including the utilities, but doing something sooner rather than later is better,” said Lee Mazzocchi, Duke’s senior vice president and chief integration and innovation officer.

Of the utility’s 7 million customers in the Southeast and Midwest, only about 3,000 use solar power, he said.

“Yet in my typical day, solar creeps into every conversation,” he said. “The big reason: solar’s got a ton of momentum behind it.”

Well-known companies are pushing for solar power, Mazzocchi said, naming Walmart, Ikea, BMW Manufacturing and others, including Mandalay Bay Resort and Casino in Las Vegas.

“When the casinos are betting on solar, you better pay attention,” said Mazzocchi, who served as the keynote speaker at Thursday’s Energy Summit in Greenville, dedicating his 20-minute presentation to the push for solar energy.

Growth in the use of solar energy is expected to reach 50% this year nationally, he said.

“A solar panel gets installed every four minutes in this country,” Mazzocchi said.

Increasing the use of solar power will present opportunities for entrepreneurs to innovate new technologies for its generation, delivery and use, he said.

Duke is embracing renewables, Mazzocchi said, investing around $3 billion since 2007 in renewable energy projects, including wind and solar. The push to add solar, however, must be done without affecting electricity costs, Mazzocchi said.

Utilities need to advance the renewable energy conversation with regulators, he said, and adopt new ways to charge for electricity beyond just the kilowatt-hour, ways to price energy products differently.

“The current regulations, mindset and business model were designed for a different era,” Mazzocchi said.

In states with a higher use of renewable energies, customers that do not use solar power subsidize the higher costs for those that do, he said.

He pointed to service disruptions in California, Arizona and Germany related to renewable energy. In Germany, where the use of renewable energy is high, electricity cost is triple what Duke’s South Carolina customers pay, Mazzocchi said.

South Carolina regulators have long resisted the adoption of a renewable energy portfolio standard that other states have used as a way to jump-start the use of renewable energies and the development of related technologies.

North Carolina regulators, for example, adopted a portfolio standard in 2007, calling for investor-owned utilities to meet up to 12.5% of their energy needs through renewable energy resources or energy efficiency measures. Rural electric cooperatives and municipal electric suppliers are subject to a 10% renewable energy requirement in North Carolina.

South Carolina is one of only 13 states without some form of voluntary or mandatory portfolio standard, according to the U.S. Energy Information Administration. The U.S. does not have a federal standard, though efforts have been introduced in Congress.

http://gsabusiness.com/news/49229-duke-exec-renewable-energy-regulations-needed?rss=0

Another regulatory victory for the SC Small Business Chamber

The South Carolina Public Service Commission has approved the settlement reached between the South Carolina Small Business Chamber of Commerce, Duke Energy, SC Office of Regulatory Staff and other intervenors in Duke’s recent rate hike request.

This is another big victory for the work of the SC Small Business Chamber. Our track record of successfully fighting utility rate hike requests in our state has been exceptional.  In this case we negotiated a reduction of over 75 percent from Duke’s originally proposed 14 percent electric rate hike on small businesses.

Duke’s small business customers will now see a 2.29 percent increase the first year and 1.13 percent the second year for an overall increase of only 3.42 percent.

Below is a story form GSA Business.
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GSA Business
September 12, 2013

Regulators approve Duke’s rate hike

Staff Report
gsanews@scbiznews.com

Duke Energy’s $118.6 million rate increase approved by the South Carolina Public Service Commission will raise rates by 3.42% over two years for small businesses, down from the 14% first proposed by the utility.

Overall, the PSC approved an average 6.42% increase for businesses, 7.34% for industrial customers and 10.16% for residential customers.

Frank Knapp, president and CEO of the S.C. Small Business Chamber of Commerce, has described the negotiated agreement as a “very good result for small businesses in the Duke service area.”

Overall, the PSC-approved settlement that increases electricity rates for about 540,000 households and businesses in South Carolina rate case reduces Duke’s original $220 million rate request by almost half. The approved agreement also reduces Duke’s proposed 11.25% return on common equity — the maximum profit margin — to 10.2%.

The utility’s request for its third increase in three years prompted howls of opposition at a series of public hearings. About 1,700 people registered with the PSC as opponents.

Before the PSC’s July 31 hearings on the rate request, the Charlotte, N.C.-based utility reached a settlement agreement with the state’s utility watchdog agency, the S.C. Office of Regulatory Staff, and a lineup of intervenors that included the small business chamber’s leader.

Overall, instead of an average increase of 15.1% that was first proposed to generate another $220 million annually, starting Wednesday customers will pay an average of 5.53% the first year and 2.63% more starting in September 2014.

In addition to the rate increase, the PSC directed Duke Energy to use $3.5 million at shareholder expense to provide $2.5 million for public-assistance programs, manufacturing competitiveness grants, economic development and/or education-workforce training programs. Another $1 million will be allocated by the utility through the Office of Regulatory Staff to support senior outreach and public education initiatives.

Duke Energy said the increase is needed to pay for facility upgrades. Ryan Mosier, a spokesman for the utility, has said the agreement “achieves a balance between the concerns for our customers and the need to recover the investments we’ve made in the system.

https://www.gsabusiness.com/news/48844-regulators-approve-duke-rsquo-s-rate-hike

 

Small Business Chamber negotiates a 75.6 percent lower Duke rate hike for small businesses

The South Carolina Small Business Chamber of Commerce (SCSBCC) for the seventh time has chalked up another big win onproposed energy rate increases by power companies. 

Yesterday a settlement in the Duke Energy rate filing was submitted to the S.C. Public Service Commission (PSC).  All parties intervening in the case, including SCSBCC, joined Duke and the S.C. Office of Regulatory Staff (ORS) in signing the settlement.

In March Duke asked the PSC for an overall 15.1 percent electric rate hike for its South Carolina customers—16.3 percent for residential, 14 percent for small businesses and 14.4 percent for industrial.

SCSBCC officially intervened in the case saying that the proposed hike was unjustified in general and was specifically unfair to small businesses.   In my role as SCSBCC president and CEO I gave pre-filed direct testimony outlining our argument that Duke did not deserve the excessive rate hike.

As a result of SCSBCC’s negotiations with Duke, providing that the PSC agrees to the settlement, small businesses will see only a 3.42 percent rate hike spread out over two years—2.29 percent the first year and 1.13 percent the second year.  This is a 75.6 percent decrease from the original small business rate hike filed by Duke.

The overall rate increase called for in the settlement is 8.16 percent.  Residential customers would see a 9.49 percent hike and industrial 7.73 percent increase.

SCSBCC thanks ORS for its hard work in analyzing the Duke filing, a laborious and intricate accounting task, and for its commitment during the negotiations to have a fair outcome for small businesses.  While many like to disparage state workers, small businesses could not have gotten a better return on our tax dollars paying the salaries of the ORS employees.

Public Hearing on Duke Energy's Proposed Rate Hike Tonight

Public hearings on Duke Energy's proposed average 15.1% electric rate hike start tonight in Spartanburg. That hearing will start at 6 PM at the Tracy Gaines Building (auditorium) located at 800 Brisack Road, Spartanburg.

Attend the hearing and let the SC Public Service Commission know how you feel about the rate hike. The SC Small Business Chamber is intervening in the rate case to oppose the rate increase. More on that later.

June 2013 Newsletter

South Carolina Small Business Chamber of Commerce

2013 Legislative Wrap-Up

The 2013 South Carolina legislative session was not a great success for small businesses.

Affordable health insurance was rejected by the General Assembly. The health insurance premiums small businesses and individuals pay for family coverage will continue to be about $1000 more each year because both the House and Senate rejected efforts to use Federal money to expand Medicaid. A bill (S.145) that would also make health insurance more affordable by ending anti-competitive behavior by insurance companies was put off until next year.

Legislation (H.3425 and S.536) that would make solar energy equipment affordable for residential and commercial buildings was killed-off or stalled. And unfortunately a special interest bill (H.3369)that would possibly increase workers’ compensation insurance premiums for all businesses in order to benefit a handful advanced from the House to the Senate.

But there was some good news. Legislation (H.3125)that would direct the SC Department of Commerce to develop financial resources for microbusiness lenders crossed the hall to the Senate. A bill (H.3437) to establish a committee to take a big-picture look at all legislation that would impact small businesses advanced from the House to the Senate.  

The Legislature will pick up this two-year session starting in January.

Duke Energy’s Massive Rate Hike Proposal

The S.C. Small Business Chamber of Commerce is opposing Duke Energy Carolina’s proposed 15.1% average electric rate hike. By intervening in the upcoming Public Service Commission rate hearing on Duke Energy’s filing, the Small Business Chamber is a party of record and will present a witness and cross examine witnesses. This is the seventh time either the Small Business Chamber or its President, Frank Knapp, has intervened in a utility rate case but the first against Duke. For a complete review of the amazing success the Small Business Chamber and Mr. Knapp have had in dramatically reducing rate increases on small businesses to as little as 0.08%, click here.

Members Saving Money with Our Health Insurance Plan

The Small Business Chamber in partnership with Carolina Care Plan is saving our members money with our health insurance plan. Find out if our plan can make health insurance more affordable for your business by clicking here.

Listen to what our members are saying about our health insurance plan:

“Not only do we now have a plan with better benefits than our previous plan, but we also will be saving thousands of dollars in premiums during our first year,” says Bruce Fewell of Corporate Concepts in Columbia.

“I am already seeing better benefits and lower deductibles. Plus, we will save over $8,000 in premiums in the first 12 months,” says Leslie Hagan of Hagan Heating & Air Conditioning in Anderson.

Rally With Us Against Duke’s 15.1% Rate Hike

May 2^nd—9AM—Charlotte

Thursday, May 2^nd, Duke Energy holds its Annual Shareholder Meeting to explain how it plans to increase electricity rates to make more money.

Outside the building residential and small business ratepayers will explain how we plan to stop Duke’s average 15.1% rate hike in South Carolina.

Come join ratepayers from the South Carolina Small Business Chamber of Commerce, AARP-SC, Consumers Against Rate Hikes and many other organizations who are standing up against being gouged by Duke Energy.  The company just had a 6% rate hike earlier last year.  Another 15.1% would mean a 21% increase to us in a little more than a year!

Raise your voice with us at 9AM this Thursday, May 2^nd, at 526 S. Church Street in Charlotte. 

The fight against this Duke rate hike starts Thursday.  Let the company know that you are willing to stand so that their rate increase will not.

Please call us with questions at 803-252-5733.

Thank you for your support.

Frank Knapp Jr.
President & CEO
South Carolina Small Business Chamber of Commerce

Yesterday: Big business wins two, small business picks up one

It was a busy day yesterday for the S.C. Small Business Chamber of Commerce.  Two Senate subcommittees and the House Ways and Means Committee held meetings on legislation we supported.  Unfortunately two of these bills did not get the favorable votes we wanted.

The morning started out with a Senate subcommittee on S.145, a bill that would outlaw most favored nation clauses in contracts between health insurance companies and healthcare providers.  These contracts are used to guarantee that one carrier always gets the best provider reimbursement rates forcing the provider often to charge other insurance companies more for the same services.  The result is that other insurance companies have a harder time competing with the company that has the most favored nation clauses in their contracts.  This leads to lack of competition in our health insurance market which drives up rates for everyone.

Only two people testified at the hearing—a representative of Blue Cross, Blue Shield and myself.  The BC-BS argument against the bill was that they are a major employer in the state, they are the only domestic health insurance company in the state and that the Legislature shouldn’t do anything that would hurt even if that means allowing them to maintain uncompetitive practices. 

One Senator totally bought into that BC-BS pitch and threw the free-market and reduced insurance rates for small businesses and individuals under the bus.  The other Senator didn’t think the state should make any changes in our insurance laws until the Affordable Care Act goes into effect.

So don’t look for this bill to see the light of day again until January, 2014, if then.  Congratulations to BC-BS for having their way once again with our Legislature.

Then a Senate subcommittee met to discuss S.536, a bill that would make it legal for third parties to finance and own solar panels installed on homes and commercial buildings and sell the electricity produced to the occupant.  This practice has worked well in other states and results in the financing company to make money and the building occupant to save money.   After lengthy testimony, including mine, on the merits of allowing the free market to reign, the subcommittee voted to hold another public hearing.  The reason—they wanted to hear from the energy companies (Duke, SCE&G and Progress Energy). 

The question is why would the Senators give these companies another chance to be heard?  The energy lobbyists were sitting in the room but simply chose not to testify in public.  The answer is pretty simple.  By having another meeting probably after the Senate deals with the budget, the deadline for moving any legislation from the Senate to the House this year is lost.  Congratulations to the big utility companies for winning once again over the consumers.

But there was a ray of sunshine yesterday.  The House Ways and Means Committee voted to send H.3125, the Microenterprise Development Act, to the full House.  This bill will empower our Department of Commerce to help our non-profit microloan organizations obtain more money to lend to very small businesses (4 or less employees).

Duke Energy files for 15.1% electricity rate hike—WOW!

Last week Duke Energy told the SC Public Service Commission that it wants its 540,000 customers to give it more money…a lot more money.  $220 million more a year to be exact.

Duke’s filing is for electricity rate increases for residential (16.3%), small businesses (14%) and industrial (14.4%).  In February of last year Duke received a 6% average rate hike.  If Duke’s gets the hike it wants, that would mean a staggering 21% increase to customers in about a year.

While Duke wants its customers to pay more, it is fighting in the Legislature to stop them from being able to pay less.  Duke and the other energy utilities successfully derailed a bipartisan bill just several weeks ago in the House that would have allowed third parties to finance and own solar panels on buildings and sell the electricity generated to the owners of the buildings.  Other states have successfully gone this route and taken away the biggest obstacle to more use of solar energy by residential and commercial buildings—the upfront cost to the building owner.

But Duke says no to this great free-market idea and instead wants it to be “studied” more.  Fortunately the idea will get more study in the Senate where 15 Senators on both sides of the aisle have filed the same bill (S.536).  The act is called the “Energy System Freedom of Ownership Act”. 

For those keeping score, 15 Senators is 33% of the entire Senate.  Duke and its energy buddies will have a lot harder time burying this bill.

But back to Duke’s massive rate hike request.  The South Carolina Small Business Chamber will be intervening to fight the increase.  We have the experience and a solid track record (from my personal participation with SCE&G rate cases) to take a hatchet to this over-stuffed filing. 

Stay tuned.  It’s going to be fun.