The US-Israel war in Iran has negatively impacted economies all over the world, but North Carolinians have mostly seen those effects through rising costs at the pump. The situation has highlighted once again that fossil fuel prices can be incredibly unstable. Whether because of war in the Middle East, a hurricane in the Gulf of Mexico, or a burst pipeline in the Midwest, the costs of oil and natural gas can shoot up at a moment’s notice and take their time coming back down.
In North Carolina, recent spikes in fuel prices have prompted a growing number of people to push for change in a surprising place — their electricity provider.
Fuel-Cost Sharing
Advocates are asking North Carolina leaders to join a small group of other states that require power companies like Duke Energy to absorb a small portion of fossil fuel costs. Currently, they say, Duke Energy can just push all of those costs onto its customers instead.
Fuel-cost sharing would have two main benefits, according to those advocating for its adoption. It would bring down the monthly cost of electricity for working families facing higher prices in every other area of life, and who are increasingly angry about Duke Energy rate hikes despite record profits. Fuel-cost sharing would also create an incentive for Duke Energy to transition to cleaner and more stable energy sources.
The thinking is that if Duke Energy’s shareholders risk a hit to their bottom line when fuel prices swing up and down unexpectedly, the company would be more likely to shift away from dependence on unstable sources like high-emission natural gas in favor of various renewable and price-stable sources.
Thanks to recent changes made by the Republican-controlled North Carolina General Assembly, Duke Energy’s lobbying arm wields more influence over North Carolina lawmakers and regulators than ever before. But proponents of fuel-cost sharing say that it’s still worthwhile for the public to have this conversation.
“Fuel dependence creates vulnerability — whether it’s gasoline for your car or natural gas for your power plants,” said Josh Brooks, chief of policy strategy and innovation for the North Carolina Sustainable Energy Association. “Tying costs to volatile commodities means a lot of risk exposure for ratepayers. That’s an issue both regulators and policymakers should take up.”
North Carolina, like most states with vertically integrated utilities – when a single company handles the generation, distribution, and transmission of power – allows Duke Energy to pass 100% of fuel costs to customers. This protects their shareholders from feeling the consequences of price swings in the roller coaster that is the fossil fuel market. North Carolinians get no such protection, so when natural gas prices rose after the height of the COVID-19 pandemic shutdowns, an extra 12.8% was added to household bills.
“Ratepayers cover all the fuel risk in North Carolina,” said Matt Abele of the North Carolina Sustainable Energy Association. “When prices swing, customers absorb that cost.”
Confusion and Outrage
Looking at a Duke Energy power bill, you wouldn’t see any mention of fuel prices. The extra charges get lumped in with a nonspecific line item. This vague language has caused a lot of confusion among customers who want to know why their electric bill can increase even when their usage goes down.
This confusion has compounded with prior outrage after a court found that regulators let Duke charge customers $19 million more in fuel costs than the law allowed. Duke was not ordered to refund customers. As households again see nondescript charges appearing on their monthly bills, an online petition has been started that calls for Duke to submit to an independent audit and refund its customers for any improper charges. More than 73,000 people have signed the petition so far.
“Unexpected and unexplainable increases in Duke Energy bills have become a major concern for many families,” the petition begins. “When bills rise without reasonable justification or transparency, it impacts our ability to plan and manage our household finances effectively.”
Fuel Costs Drive Rate Increases
According to an analysis from the Energy & Policy Institute, a Duke Energy customer whose electricity usage has remained the same now pays 45% more per month than in 2020. Fuel costs are a significant reason why.
While Duke Energy tries to downplay the role natural gas prices have on rate increases, an independent analysis of publicly available data from 2017 to 2024 showed a very different story. The rising price of natural gas drove 46% of Duke’s rate increases in the eastern portion of the state, while in the western portion, where power plants are more reliant on natural gas, it drove 67% of rate increases.
“The analysis, using Duke Energy’s own data, is clear,” said Will Scott, the EDF director of southeast climate & clean energy. “Building gas comes with an ongoing, volatile price risk that is borne not by Duke Energy shareholders, but entirely by ratepayers.”
Scott went on to warn that Duke’s plans to construct even more natural gas power plants would only worsen the problem.
“Despite story after story this year from Duke Energy Carolinas customers about the burdens of high power bills, Duke continues to pursue one of the most aggressive proposals for new fossil power-plant construction in the nation.”
“Deeper investment in affordable, clean energy alternatives would speed our state’s progress in reducing climate and health-harming pollution, and also help protect ratepayers from unpredictable fuel price shocks.”
What’s Happening Now?
Last summer, the state legislature overturned North Carolina Governor Josh Stein’s veto and passed SB 266. The new law allows Duke Energy to pass along construction costs to customers for power plants that have not been built yet.
Duke is currently requesting a 16-18% increase to their base rate for NC households, due in large part to anticipated AI data centers. North Carolinians are pushing back against Duke in public hearings held before the Utilities Commission.
Most recently, the company announced they want to pass along an additional $800 million in fuel costs to customers.
If you are interested in speaking out against Duke Energy’s rate hike proposal, find a public hearing near you by visiting NCUC: Public Hearings
