By Ray Gronberg for BUSINESS NORTH CAROLINA
Duke’s latest rate increase filing includes a request for a 10.95% return on equity, which the Environmental Defense Fund says is the third-highest of 53 similar proposals by U.S. power companies since November 2024.
The environment group says that is asking too much of the utility’s customers and too little of its stockholders.
The highest request was from Florida Power & Light, which like Duke operates in the Sunshine State. Last year, the utility owned by NextEra Energy asked for an 11.9% ROE. Regulators approved a 10.95% rate.
Duke, which operates in six states, had an overall return on equity of more than 9% in 2025.
The EDF is among several groups that have lined up to weigh in with the N.C. Utilities Commission about Duke’s proposed North Carolina rate increases. Many represent industry or large-scale power users such as Walmart.
Duke’s proposed rates would boost average residential power bills by about 13%, starting in 2027. The commission is expected to rule late this year.
The utility reported a $4.9 billion profit in 2025, and is “asking to be rewarded at a time when there’s a lot of frustration over what people’s bills have been,” says Will Scott, the EDF’s North Carolina policy director.
Duke’s argument for a 10.95% return rests in part on its assessment of the broader economy. Consultant James Coyne told the commission the cost of capital for utilities has increased, thanks in large part to inflation, Federal Reserve decisions and Trump administration tariff policies.
“There has been a fundamental change in economic and capital market conditions,” Coyne said in his written testimony.
Determining the allowed return on equity is “often one of the most contentious issues” in power-company rate cases, the Utilities Commission has said.
In late 2023, at the end of the last multi-year pricing review, it allowed Duke Carolinas a 10.1% return; the company had sought 10.4%. Industry groups like the Carolina Utility Customers Association still criticized the 10.1% level as too high.
Scott notes that the Utilities Commission is made up of mostly new members versus 2023. Lawmakers have downsized the panel, with a majority of the five members now appointed by the Republican-dominated legislature and state treasurer.