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A couple of weeks ago, I received an email from a reader who tracks his Duke Energy bill closely — “religiously,” by his account. I’m talking spreadsheets recording line-item costs.
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That specificity is how the reader noticed that the “summary of rider adjustments” part of his bill in June was more than double the May amount. The costs increased over the summer, and August’s rider adjustments cost $47 more than May’s.
The reader acknowledged that his energy use was up, but still couldn’t explain the sharp cost increase for riders.
Duke Energy says riders “allow for the recovery of variable costs like fuel needed for the generation of power, or for the administration of programs designed to lower energy costs and demand through greater efficiency.” They can also be used to apply credits, such as for a tax code change.
The reader’s situation piqued my curiosity, and upon checking my own electric bill, I noticed the same trend.
Duke Energy Progress charged me $12.06 for “summary of rider adjustments” in the billing period ending May 14. The next month, it was $20.38. And then it was $32.06, and for the billing period ending Aug. 14, $25.54.
The amount charged for riders is based on energy usage, measured in kilowatt-hours, Lucy Edmondson, chief counsel for the North Carolina Utilities Commission Public Staff, told me in an email.
I was paying more for rider adjustments over the summer, and I was using more energy — even though I wasn’t trying to. I used 572 kWh in the billing period ending in mid-May, 803 kWh in May-June, more than 1,000 in June-July and closer to 800 in the period ending mid-August.
But something else happened this summer. At the beginning of June, there were two rider changes, Edmondson said.
These two changes caused the rider adjustments charge to increase from 2.108 cents per kWh to 3.144 cents per kWh.
It’s just about 1 cent more, but that’s an increase of more than 50%. And when your energy use spikes, it apparently makes a big difference.
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And why would your energy use spike? Edmondson laid it out for me when I asked why the reader’s rider charges had gone up: “Most likely, the customer’s increased consumption of energy with warmer weather in June contributed to the higher summary of rider adjustments amount.”
According to the North Carolina State Climate Office, the statewide average temperature of 78.6 degrees made last month the fourth-hottest August North Carolina has seen since 1895. July was the 10th warmest since 1895, with a statewide average temperature of 79.3 degrees, the climate office reported.
We’ve all seen gas prices rise over the past few months. Just this week, a gallon of regular unleaded surpassed $4, on average, in North Carolina, and diesel crossed the $6 per gallon threshold.
But Duke Energy says the rider changes aren’t the result of these recent upticks.
“The June 1 fuel adjustment was driven mostly by higher winter costs, when extreme cold increased electricity use and required us to buy extra power to meet customer demand,” Caroline Fountain, communications manager for Duke Energy, told me in an email.
The utility files a quarterly fuel update, as required by state law, but a filing will only change rates if the updated costs — of natural gas, nuclear fuel, coal and power Duke buys from other providers — are at least 10% higher or lower than what is already built into customer rates.
Duke filed the July 15 quarterly update, and the costs did not meet the 10% threshold. The next update is due Oct. 15, and if there is a change, it would take effect Dec. 1.
“While an increase could happen in more than one quarter, it would be unlikely because each update looks at actual costs, updated forecasts and fuel purchases we make ahead of time to help reduce customers’ exposure to sudden market swings,” Fountain said in the email.
Duke says it doesn’t profit from fuel or power it buys for customers.
Duke Energy has pointed to higher demand for air conditioning as the primary reason for increased energy use and consequently, higher bills.
But not everyone accepts that as the whole story.
NC WARN, a nonprofit that advocates for a transition to clean energy and promotes energy and climate justice, previously told me that our more expensive utility bills can be tied to profits for Duke Energy executives and investors.
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