CHARLOTTE, N.C. (WECT) – Over $1 billion of Duke Energy’s storm recovery costs incurred during the catastrophic hurricanes Florence, Michael and Dorian, and Winter Storm Diego in North Carolina in 2018-19 are to be paid for by customers over the next 20 years.
Beginning in December, bills will feature a “storm recovery charge” line item.
Duke Energy Progress (DEP) residential customers using 1,000 kWh per month will see bills increase by $2.44 per month.
“Our first priority is to safely restore service to our customers, which we achieved quickly and efficiently, substantially limiting outage time,” said Stephen De May, Duke Energy’s North Carolina president. “We are also constantly mindful of customer bills, so we’re very pleased this new cost recovery tool enabled us to drastically reduce storm repair costs for our customers.”
The devastation caused by these catastrophic storms required a complete rebuild of parts of the electrical system in order to restore power to customers Duke Energy reported.
In the aftermath of Hurricane Florence alone, the company had 142 substations and 53 transmission lines out of service, as well as more than 220 miles of downed wire, approximately 5,700 downed poles and 2,200 damaged transformers across the Carolinas system.
The unexpected costs that arose during these extraordinary circumstances would have been about $1.6 billion if repaid using traditional storm recovery methods; however, Duke Energy has secured savings for customers by financing $1 billion in storm recovery using 20-year bonds.
Senate Bill 559, passed in November 2019, allowed Duke Energy to securitize the costs to fund storm repairs by issuing low-interest bonds that save customers $300 million.
Using this form of securitization reduces the overall costs to customers resulting in a total repayment cost, including principal and interest, of $1.3 billion over 20 years.
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