Duke Energy reduced its rate hike request from 18% to 11.6% after regulator pushback, but coal retirement pressure remains.

Duke Energy has reduced its proposed residential rate increase to 11.6% from an initial request of 18%, following pushback from customers and state regulators. However, hearings this week have revealed significant ongoing concerns about the utility's spending plans and how costs are being allocated between customer classes.

The company's $103 billion capital spending plan—which Duke describes as the largest spending plan ever filed by any regulated U.S. utility—has become the central point of contention. Ratepayers and regulators have demanded greater justification for the massive investment and its corresponding rate impact.

Duke executives have also revised their requested return on equity (ROE) downward, from 10.95% to 10.48%, citing affordability concerns. Company representatives have argued that this figure represents "the low end of what we can absorb and maintain the long-term financial health of the utility," and have warned that a more aggressive ROE reduction risks triggering a credit downgrade. Such a downgrade would increase borrowing costs for the company and, ultimately, require higher equity returns to attract future investment in the utility.

State Attorney General Jeff Jackson, while acknowledging Duke's agreement to lower the rate hike, has called the new 11.6% figure "still too high." He has pressed the utility to ensure that residential customers are not bearing a disproportionate share of costs relative to large commercial users like data centers.

This concern has gained traction among expert witnesses. Justin Brant, a regulatory consultant testifying for the state's energy office, argued that Duke's proposal "shifts significant costs and risks onto other ratepayers." Testimony also revealed stark disparities: grid improvements included in Duke's $100 billion capital plan would generate financial benefits almost entirely for non-residential customers, with approximately 98% of identified benefits accruing to large load customers rather than residential ratepayers.

The state commission must issue its decision by September 20.