The South Carolina Public Service Commission (PSC) issued its conclusions for Duke Energy’s proposed fee hike this week, which amounted to a victory for customers. Though the Commission’s order is not perfect, customers’ participation ultimately led to very positive outcomes.

The fee hike initially proposed by Duke was to more than triple the current monthly fee that South Carolina customers must pay before using any electricity–from $8-9 per month to $28-29 per month. This would have meant that customers would pay at least $336 per year before even flipping on a light switch, and if it were approved, it would have been the highest mandatory monthly fee of any investor-owned utility (IOU) in the nation. See our blog post on the proposal here.

The problem with hiking the mandatory monthly fee is that as proportionally more of the utility bill is put into the mandatory fee rather than the amount charged for actual electricity (kilowatt hours) used, it takes away customers’ ability to control their energy bills, disincentivizes energy conservation, and most heavily harms low energy users–namely seniors, renters, low-income families, and solar households. Customers recognized these problems with the fee hike immediately and responded in force by alerting the PSC Commissioners, which must approve rate hikes for regulated utilities like Duke, to their concerns.

SACE and partner groups began a campaign to raise awareness among customers about the egregious fee hike and ensure they were able to voice their opposition in written comments and at public hearings. And did they ever voice their opposition! More than 1,100 Duke customers submitted written comments to the PSC opposing the fee hike! Read some of the customers’ comments that we helped deliver in the blog series here.

South Carolina AARP requested five public hearings throughout Duke’s service territories, which the PSC granted. The hearings took place in Spartanburg, Anderson, Greenville, Florence, and Sumter, nearly all of which turned out to be beyond-capacity crowds (more than 1,000 customers total), with dozens of customers articulately explaining how the proposed fee hike would have done harm. The primary themes that came out in the customers’ testimony were: 1) hiking the mandatory monthly fee would have a terrible impact on low-income and fixed income customers 2) hiking the mandatory monthly fee would unfairly punish customers who reduce their energy use through energy efficiency or solar; 3) customers suffer while Duke shareholders profit and executives enjoy lavish compensation, and 4) [at the Florence and Sumter hearings] that farmers would be negatively impacted by the fee hike. Read more about the public hearings and customers’ testimony in the blog post here.

Under intense pressure, Duke Energy scaled back their proposed fees from $28-29 per month to $11.78 for Duke Energy Progress (DEP) customers and $11.96 for Duke Energy Carolinas (DEC) customers. These amounts were ultimately adopted by the PSC in their orders this week.

Did customer input make a difference? I cannot say “YES” enough! The PSC took its job seriously of listening to customers and incorporating their input into the final decision. Take for example their language from their orders, highlighted at the conclusion of this blog post, which specifically mentions the impact from customer testimony at the public hearings.

Duke Energy took its customers’ comments seriously as well. In the company’s letters announcing the downscaling of their proposed fees, Duke attributed much of the reason for the changes to “testimony heard at the public hearings” (DEC letter here; DEP letter here). Additionally, when justifying the appropriateness of the changes to the proposed fees, Duke Energy’s letters to the PSC cited the 1,000+ written customer comments to the PSC as justification for their change in the monthly fee (DEC letter here, DEP letter here).

The scaling back of the proposed monthly fees is a victory for customers and shows the power of public input in the decision-making process. However the Commission’s decisions are not totally good for consumers. Several experts participating in the rate case testified that the method by which Duke calculated the monthly charge to customers was inappropriate and assigned far too great of a cost on each customer, which resulted in the exorbitant proposed fees. While it is the standing policy of the PSC that customers’ monthly fee should only be comprised of the costs for checking the meter, billing, customer service, and providing a service drop from the distribution line, Duke’s proposed fee hike rests on the idea that customers also should be charged for an equal share of much of the equipment used to generate and deliver power to customers, regardless of how much power they actually use.

The fee that was settled upon for DEC territory of $11.96 is in line with the more accurate cost calculation method, but the DEP fee is still $2-3 higher than it should be, which means that Duke is charging customers more for basic access to electricity than it actually costs to provide that access (see our op-ed on this topic here). Moreover, the PSC did not explicitly reject the use of Duke’s flawed accounting method, which leaves customers vulnerable to similar outrageous fee hikes in the future. We and other advocates would have preferred that the Commission expressly reject Duke’s cost calculation method and limit the fee increase to the same percentage as the overall rate hike.

Nonetheless, the Commission’s decisions show that the power of public input made a massive difference and customers have a significantly better outcome than if they had not fought Duke’s outrageous proposal. Customers should be proud of the difference they have made in this fight and heartened that when they participate, their voices make an impact!

Excerpts from PSC orders, highlighting the impact of customers’ testimony at the public hearings: