Dive Brief:

• A proposed $79 million rate increase filed by Duke Energy in South Carolina would raise rates significantly, and includes a small charge to begin cleanup of the utility's coal ash ponds in the state. 
• It is the first time the utility has sought cost recovery in the Palmetto State for cleanup of the coal ash ponds, according to Triad Business Journal.
• The $1.5 million request could be the first of many; the outlet reports cleanup costs for the utility have already reached $500 million.

Dive Insight:

Duke Energy has proposed a significant rate increase, potentially raising the average customer's monthly power bill to more than $121, an increase of $16.60. It would be "the first such request by the company in 28 years," Duke says on a web page detailing the plan.

The overall rate request includes a modest amount to begin cleanup of coal ash ponds, an issue which Triad Business Journal notes has yet to make too many waves in South Carolina. Earlier this year, the S.C. Gov. Nikki Haley (R) has signed a bill requiring coal ash disposed in the state to be stored in a Class 3 landfill. The bill was aimed at outlining guidelines for out-of-state parties for coal ash disposal.

But in North Carolina, it has become a contentious issue, in part because of a 2014 Dan River spill that brought the issue to the forefront.

"The proposed increase in bills is primarily driven by investment in our generating facilities, including solar generation, used to produce and efficiently deliver reliable and safe energy to 168,000 customers," Duke explained. And the company said Duke Energy Progress has, in recent years, invested about $1.7 billion to complete three gas-fired plants in North Carolina.

The company has also made investments in four solar sites; the rate request also includes a portion of the Duke Energy Progress acquisition of the North Carolina Eastern Municipal Power Agency’s generating assets in 2015. All of the investments, though located in North Carolina, also serve customers to the south.

And Duke is quick to add that if its rate request is approved, the impact would be muted by a $16 million decrease in fuel charges that took effect during the summer "which reflects the benefit of the new, highly efficient natural gas generation plant additions."

The fuel charge reductions drop overall bill impacts from 14.5% to 11.6%, the utility says.

While the rates include a small charge to begin coal ash cleanup, the issue has already been in the headlines in North Carolina. 

The North Carolina Department of Environmental Quality in May directed Duke Energy to excavate coal ash from all of its holding ponds in the state by 2024. But now, a new law would allow for cap-in-place solutions, so long as Duke can provide permanent drinking water solutions for residents, and agrees to repair dams holding the ponds in place.

According to Triad Business Journal, Duke's estimates to clean up coal ash ponds in six states could reach $3.5 billion, with the bulk of that being spent in North and South Carolina.