South Mecklenburg News

Duke Energy in North Carolina is feeling the impacts of the COVID-19 pandemic, but if state regulators suspend the minimum demand charges for commercial and industrial customers, the company warned that it could weaken the utility finances. 

Duke Energy told North Carolina regulators that suspending demand charges would result in "negative consequences" that could amount to approximately $28 million lost in revenue for three months, the Charlotte Business Journal reported in April. 

The Carolina Utility Customer Association (CUCA) is petitioning that the demand charge portion of power bills be suspended for large power consumers during the coronavirus crisis, but Duke Energy filed a formal response to the petition and met before the North Carolina Utilities Commission with CUCA, according to the Charlotte Business Journal. 

“Everybody’s taking a hit here,” CUCA Executive Director Kevin Martin told the Charlotte Business Journal. “We are asking Duke and Dominion to step in and help out. And we are hoping the [North Carolina Utilities Commission] can see fit to  implement this temporary waiver.”

But Duke told the Charlotte Business Journal that it “[recognizes] the economic impact that the pandemic has on North Carolina  families and businesses," but "the companies themselves are not  immune from these financial challenges.” If Duke were to suspend the charges, it would be affected by the loss of revenue, the Charlotte Business Journal reported. 

Suspending the charges could also shift the burden onto those who can't afford it, like small commercial customers, the Charlotte Business Journal reported. 

“We are concerned that granting CUCA’s request would shift cost to those who can least afford it,” Duke Energy spokeswoman Meredith Archie told the Charlotte Business Journal. “Now,  more than ever, we have to be able to provide reliable service to our customers and this charge enables us to keep the system ready,” she told the publication. “To characterize this as a ‘windfall profit’ for Duke Energy is  simply not true.”

Gildan Yarns is also asking the Commission to suspend the charges in agreement with CUCA, according to the Charlotte Business Journal. Keith Nicholson, a plant manager for the company, asked the commission to “waive those provisions during this State of Emergency for our suppliers, customers,and my own business. In these times, we are all hurting and we will need a little help from the utilities to make it through," the Charlotte Business Journal reports. 

The commission said it couldn't take a position in the matter until CUCA answered some questions in the filing, according to the Charlotte Business Journal. 

While Martin would like Duke Energy to help out during the pandemic, he also said he understands why Duke doesn't want to suspend the charges, but asks the company to think of its customers, the Charlotte Business Journal reports. 

“Generally,  I am a supporter of utility perspectives,” Martin told the Charlotte Business Journal. “I think here Duke is being short-sighted and not supporting its customers. I implore  the utility leadership to look long term.”

While the commission has yet to take a position in the matter, it said that Duke is already feeling the effects of the pandemic with schools and businesses closing and reducing the amount of power used, according to the Charlotte Business Journal. 

[Duke is] no exception and during March 2020 encountered difficulties in borrowing in the commercial paper market to meet their daily and short-term capital needs," the commission said, according to the Charlotte Business Journal. "[And the] negative consequences to the companies from these  load and financial challenges, combined with the uncertainty of their  duration during and after the COVID- 19 state of emergency, should also be considered in the context of CUCA’s petition.”