Analysis: Duke Energy Carolinas’ rate plan is unfair to residential customers

Fair rates, more clean energy, and reducing excessive shareholder profits could save residential customers millions

CHAPEL HILL (June 1, 2026) – Duke Energy Carolinas could save residential customers millions by making moderate changes to its rate practices, according to two new analyses in response to the company’s request to raise residential customer’s rates 18.1%.

The first analysis, by John Wilson of Grid Strategies, found that ensuring large energy users, including data centers, pay their fair share would prevent the disproportionate shifting of costs onto struggling residential customers. Currently, Duke Energy Carolinas residential customers pay for much of the cost of power plant and transmission upgrades needed for energy-hungry industrial customers. The report also shows that incentivizing large customers to pay for their own low cost, clean energy sources, like solar and battery storage, would reduce upward pressure on residential bills, hedge against gas price spikes, and lower air pollution.

A second analysis revealed that Duke Energy Carolinas’ request to raise its return on equity or profit rate to a breathtaking 10.95% is patently unreasonable, as it is a far higher return than what investors would expect for comparatively safe public utilities. The analysis, which was prepared by corporate finance and utility regulatory expert Steve Kihm of the Narrative 804 firm, found that a more moderate 9.10% return on equity would reduce customer costs by $370 million, while preserving Duke Energy Carolinas’ ability to secure necessary shareholder investment.

“We are in an affordability crisis. Measured, forward looking actions are necessary to help keep utility bill spikes under control,” said Munashe Magarira, a senior attorney at the Southern Environmental Law Center. “Fair bills, low-cost, clean energy, and more reasonable utility profits are commonsense changes that level the playing field for families.”

The North Carolina Utilities Commission is currently reviewing Duke Energy Carolinas’ general rate case application and multi-year rate plan, which includes residential customer bill increases as well as a jump in the monopoly utility’s guaranteed profits. On behalf of the North Carolina Justice Center, North Carolina Housing Coalition, Southern Alliance for Clean Energy, and Vote Solar, the Southern Environmental Law Center intervened in the commission’s general rate case proceeding. Both analyses were submitted as expert testimony by the Southern Environmental Law Center.

Clean energy groups and advocates statements are below:

“Low-income households cannot afford more inaction,” said Claire Williamson, senior energy policy advocate at the North Carolina Justice Center. “We need utility rate policies that center affordability, deliver cost savings, and pull in more low cost, reliable clean energy.”

“While Duke’s proposal would be a boon for shareholders who would reap immense profits; it comes at the expense of ordinary folks struggling to make ends meet,” said Samuel Gunter, executive director of the North Carolina Housing Coalition. “A lower return on equity would significantly reduce costs for households, providing them with the needed breathing room to afford the basic necessities of life.”

“This case represents an important opportunity for the North Carolina Utilities Commission to protect residential ratepayers and enable large new corporate customers to bring clean energy onto the grid,” said Eddy Moore, decarbonization director at the Southern Alliance for Clean Energy.

“During these uncertain times, solar, storage and other renewables are increasingly valuable resources,” said Jake Duncan, senior southeast regulatory director, at Vote Solar. “As new data centers and large energy customers connect to the grid, fairness demands they pay their fair share and bring their own clean energy — not leave the costs to everyone else. The policy proposals we have brought forward in this rate case are the best tools to protect communities and help North Carolina meet its climate goals and power needs.”

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FOR MORE INFORMATION, CONTACT: Kathleen Sullivan, Senior Communications Manager (NC), 919-945-7106, ksullivan@selc.org