A powerful consortium of pulp mills, pipe foundries and other manufacturers has moved to block an aid program for Duke Energy’s poorest residential customers — provoking dismay among the clean energy advocates who had championed it.
Set to begin early next year, the Customer Assistance Program would give a $42 discount for 12 months to customers struggling to pay their electric bills, more than offsetting coming rate hikes. Large industrial customers would help pay for the program with a $1.70 monthly fee.
The Utilities Commission this summer greenlit the initiative for Duke Energy Progress, covering eastern and parts of western North Carolina, and had been expected to do the same for Duke Energy Carolinas. Some 124,000 households were predicted to benefit.
But in a pair of Oct. 17 filings, the Carolina Industrial Group for Fair Utility Rates claimed regulators lacked authority to order the program and said it violated the principle that one class of customers shouldn’t subsidize another.
“No party to this proceeding would be prejudiced by entry of a limited stay of the Order,” the industrial group said in its motion.
In a flurry of responses filed this week, numerous parties said otherwise.
“Staying implementation of the [program] while the matter is appealed could result in irreparable harm to otherwise eligible low-income ratepayers,” wrote Robert Josey, an attorney with Public Staff, the state-sanctioned customer advocate.
And in a press release, a chorus of advocates including the state NAACP and the North Carolina Housing Coalition said it would be “shameful” if factories with monthly bills in the tens of thousands of dollars toppled the program over a fee that amounted to a rounding error.
“While large industrial and manufacturing customers are up in arms about an additional $1.70 a month, there are people all across our state struggling to keep the lights on,” said Mikaela Curry, field manager with the Sierra Club.
The notion that no one would be negatively impacted by the program’s suspension caused special alarm.
“It’s just not true,” said David Neal, senior attorney with the Southern Environmental Law Center, in an interview. “Tens of thousands of people would be prejudiced. It would be dreadful.”
‘Misguided and irrational’
Beyond its potential harm to low-income families, Neal says the industrial group’s legal challenge doesn’t make financial sense: It could easily cost more than its members’ $1.70 monthly charges. “It’s misguided and irrational,” he said.
Manufacturing customers will already see lower rate hikes than other customer classes, advocates pointed out to the commission. While Duke requested residential increases in the 20% range, they proposed 11% for some of their largest industrial customers.
Far from representing a cross-class subsidy, the $1.70 fee is most likely a bargain for large customers, who would otherwise chip in for unpaid bills from disconnected residential accounts.
“There’s great evidence in the record that it’s going to reduce the amount of bad debt otherwise recovered from all customer classes,” Neal said. “If you didn’t have any contribution from industrial customers, they would be getting a benefit without having paid the cost.”
He also dismissed the idea that the Utilities Commission needs explicit direction from the state legislature to implement the program.
For one thing, a 2021 law allows the panel to consider whether multi-year rate increase applications — such as that submitted by Duke — reduce low-income energy burdens. What’s more, Duke Energy Carolinas has run a much smaller assistance program for older, low-income customers since 1978, and the General Assembly has never objected.
“The idea that there’s something unlawful here,” Neal said, “doesn’t fit with the commission’s broad authority to set rates that are in the public interest and fair and reasonable.”
Still, the industrial group’s appeal, which the Republican-controlled state Supreme Court must hear by law, has high stakes. “They’re saying the commission does not have the authority to ever institute a low-income bill payment assistance program,” Neal said. “That’s really aggressive.”
‘Good corporate citizens’?
The members of the Carolina Industrial Group for Fair Utility Rates are not publicized, but they originated with the pulp and paper industry and are separated according to which utility serves them.
While the Duke Energy customer groups have formed alliances with clean energy and low-income advocates before, executives at the prominent member Charlotte Pipe and Foundry Company have also denied climate science and decried renewables.
Christina Cress, the attorney representing the group’s entities before the Utilities Commission, declined to comment for this story, citing the pending case for Duke Energy Carolinas.
For now, consumer and clean energy advocates are looking to regulators to save the customer assistance plan.
“This program has the support of the public staff, Duke Energy, the utility commission, and advocacy groups across the state,” said Reggie Shuford, the executive director of the North Carolina Justice Center, in a release. “It should not be derailed by a group of faceless corporate entities.”
But Neal also holds out hope that the industrial group itself will reconsider its decision and reverse course.
“I really believe that most industrial customers in North Carolina want to be good corporate citizens,” he said. “If they really looked at this, they would be happy to pay $1.70 knowing that they’re contributing to something that improves the lives of the people of this state.”
He added, “that’s why I’m hopeful that there’s a path forward.”
Clarification: This story has been updated to remove a reference to a member of the Dominion Energy customer group. The Carolina Industrial Group for Fair Utility Rates is divided into separate organizations based on utility territories, and the company named in an earlier version of this story is part of a division not involved with the challenge.