STATE OF NORTH CAROLINA ex rel. UTILITIES COMMISSION; DUKE ENERGY CAROLINAS, LLC, Applicant; PUBLIC STAFF -- NORTH CAROLINA UTILITIES COMMISSION, Intervenor
ATTORNEY GENERAL ROY COOPER, N.C. WASTE AWARENESS AND REDUCTION NETWORK, N.C. JUSTICE CENTER, and N.C. HOUSING COALITION, Intervenors
Heard in the Supreme Court September 8, 2014.
Counsel Amended January 7, 2015.
N.C. Utilities Commission. No. E-7,SUB989.
TROUTMAN SANDERS LLP, Charlotte, NC, by Kiran H. MehtaMr., Primary Attorney, Attorney at Law; Mr. Christopher G. Browning, Jr., Primary Attorney, Attorney at Law, TROUTMAN SANDERS LLP, Raleigh, NC; Heather Shirley Smith, Primary Attorney, Deputy General Counsel and Mr. Charles A. Castle, Primary Attorney, Associate General Counsel, Duke Energy Corporation, Charlotte, NC; Kendrick Fentress, Primary Attorney, Associate General Counsel, DUKE ENERGY CAROLINAS, LLC, Raleigh, NC; Mr. Robert W. Kaylor, Primary Attorney, Attorney at Law, LAW OFFICE OF ROBERT W. KAYLOR, PA, Raleigh, NC, for Other Appellee - Duke Energy Carolinas, LLC.
Dianna W. Downey, David T. DroozMr., Primary Attorneys, Staff Attorneys, Lucy E. Edmondson, William E. Grantmyre, Staff Attorneys, Mr. Robert S. Gillam, Attorney at Law, Antoinette R. WikeMs., Primary Attorney, Chief Counsel, Raleigh, NC, for Intervenor Appellee - PUBLIC STAFF - NC UTILITIES COMMISSION.
Mr. Kevin Anderson, Primary Attorney, Senior Deputy Attorney General, Phillip K. WoodsMr., Assistant Attorney General, Mr. John F. Maddrey, Primary Attorney, Solicitor General, Ms. Margaret A. Force, Mr. Michael T. Henry, Primary Attorneys, Assistant Attorneys General, N.C. DEPARTMENT OF JUSTICE, Raleigh, NC; Mr. Christopher J. Ayers, Primary Attorney, Attorney at Law, POYNER & SPRUILL, LLP, Raleigh, NC, for Intervenor-Appellant - Attorney General Roy Cooper.
Sherri Zann Rosenthal, Primary Attorney, Senior Assistant City Attorney, Durham, NC, for Intervenor-Appellant - City of Durham.
Julie Nepveu, Primary Attorney, Attorney at Law, Washington, DC; Mr. M. Jason Williams, Primary Attorney, Attorney at Law, Washington, NC for AARP, Amicus.
Law Offices of F. Bryan Brice, Jr., Raleigh, NC, by Matthew D. QuinnMr., Primary Attorney, Attorney at Law; and John D. RunkleMr., Primary Attorney, Attorney at Law, Chapel Hill, for Intervenor-Appellant - NC Waste Awareness And Reducation Network.
On direct appeal as of right pursuant to N.C.G.S. §
§ 7A-29(b) and 62-90(d) from a final order of the North Carolina Utilities
Commission on remand from this Court entered on 23 October 2013 in Docket No.
E-7, Sub 989.
In this case we consider whether the order of the North Carolina Utilities Commission (" the Commission" ) authorizing a 10.5% return on equity (" ROE" ) for Duke Energy Carolinas (" Duke" ) contained sufficient findings of fact to demonstrate that the order was supported by competent, material, and substantial evidence in view of the entire record. See N.C.G.S. § 62-94 (2013). Because we conclude that the Commission made sufficient findings of fact regarding the impact of changing economic conditions upon customers, we affirm. See id. § 62-94(b).
On 1 July 2011, Duke filed an application with the Commission requesting authority to increase its North Carolina retail electric service rates to produce an additional $646,057,000, yielding a net increase of 15.2% in overall base revenues. The application requested that rates be established using an ROE of 11.5%. The ROE represents the return that a utility is allowed to earn on the equity-financed portion of its capital investment by charging rates to its customers. As a result, the ROE approved by the Commission affects profits for shareholders and costs to consumers. State ex rel. Utils. Comm'n v. Cooper (" Cooper II" ), 367 N.C. 430, 432, 758 S.E.2d 635, 636 (2014) (citations omitted). " The ROE is one of the components used in determining a company's overall rate of return." Id. (citation omitted).
The proceedings before the Commission are set forth in our opinion in State ex rel. Utilities Commission v. Cooper (" Cooper I " ), 366 N.C. 484, 739 S.E.2d 541 (2013). In pertinent part, we explained that
[t]he Commission entered an order on 28 July 2011, declaring this matter to be a general rate case and suspending the proposed rate increase pending further investigation. . . . The Attorney General of North Carolina and the Public Staff--North Carolina Utilities Commission intervened in this matter as allowed by law.
On 28 November 2011, the Public Staff and Duke filed an Agreement and Stipulation of Settlement with the Commission that " provide[d] for a net increase of $309,033,000" for annual revenues and an allowed " ROE of 10.5%." The Settlement addressed all issues between Duke and the Public Staff, but was contested by some of the other parties, including the Attorney General.
Id. at 486, 739 S.E.2d at 542-43. Subsequently, the Commission conducted six hearings to receive testimony from public witnesses and an evidentiary hearing for receiving expert testimony. Id. On 27 January 2012, the Commission entered an order (the " Rate Order" ) approving ...