Here’s why Apple, Facebook and Google lined up against Duke Energy’s rate hike plan

This 2010 file photo shows construction on Apple’s data center site in Maiden.
This 2010 file photo shows construction on Apple’s data center site in Maiden. Bloomberg

As it seeks higher rates in North Carolina, Duke Energy is generating opposition from some of the biggest names in Silicon Valley.

Tech giants Apple, Facebook and Google are the latest companies to challenge subsidiary Duke Energy Carolina’s plans to raise electricity bills for businesses and residents in Charlotte and other parts of the state.

If the North Carolina Utilities Commission give its approval, rates would rise 13.6 percent on average across residential, commercial and industrial customers in central and western portions of North Carolina.

The tech firms, which weighed in on the issue this week, are the most prominent corporations yet to line up against the rate request filed last year by the Charlotte-based utility.

All three firms are Duke customers and operate big data centers in North Carolina towns: Apple in Maiden in Catawba County; Google in Lenoir in Caldwell County; and Facebook in Forest City in Rutherford County.

In separate testimony to the commission, experts speaking for the tech firms criticized Duke’s request – specifically its push for customers to foot costs for an abandoned nuclear project near Gaffney, S.C., and for a project to upgrade the state’s electric system.

Some of the strongest language is directed at the upgrade project, a $13 billion effort Duke announced last year to modernize the state’s electric infrastructure. Duke has said the 10-year initiative, which includes burying power lines to reduce outages and other efforts, will lower bills and boost the state’s economy.

But a study cited by Duke on the program’s benefits fails to account for the negative economic impacts of making residential customers pay higher electricity rates, according to the expert testimony.

Duke is “painting it as a jobs plan that will have rippling effects through the economy,” but the utility’s cost/benefit analysis of the project is flawed and incomplete, the testimony says.

“DEC’s evidence is missing key data,” the testimony says. “DEC has not assured interested parties that there is, in fact, a problem.”

As for the nuclear project, Duke filed with its rate proposal a request to scrap the planned Lee plant in South Carolina.

Duke said the cancellation stemmed from last year’s bankruptcy filing by nuclear-reactor supplier Westinghouse, the primary contractor on the project. In its rate request, Duke wants customers to pay about $636 million for costs associated with the plant.

But Duke has substantially exceeded spending caps set by the NC Utilities Commission for the project, according to expert testimony. In addition, Duke does not appear to have commission approval to recover certain costs, such as those related to site preparation for the project, the testimony says.

Duke spokesman Jeff Brooks told the Observer that Duke continues to review all of the comments submitted to the commission as part of the rate case. At this time, Duke is not commenting on specific testimony, he said.

“We disagree with some of the positions,” he said. “We’ll be submitting our replies in the coming weeks.”

On Tuesday, a public hearing on the rate request is scheduled for 6:30 p.m. in Mecklenburg County Courthouse, 832 E. Fourth St., Charlotte.

If the commission signs off, it would be the first Duke rate hike approved for Charlotte and the central and western portions of the state since 2013.

Duke has asked the commission to decide on the request no later than May 1.

In a separate request awaiting commission approvals, subsidiary Duke Energy Progress is seeking to raise rates in eastern North Carolina.

Deon Roberts: 704-358-5248, @DeonERoberts