We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Duke Energy (DUK) Set to Raise Natural Gas Rates in Winter
Read MoreHide Full Article
Duke Energy Corp’s (DUK - Free Report) subsidiary, Piedmont Natural Gas, recently revealed that its customers in North and South Carolina will witness higher bills this winter. It also unveiled tools, tips and assistance programs to help customers deal with higher winter bills.
Rationale Behind the Rate Hike
Commodity costs of natural gas prices have been soaring globally this year, resulting in higher prices for natural gas. Warmer-than-usual summers that led to higher electricity consumption, on account of air conditioning, and increased liquid natural gas exports have collectively contributed to low levels of inventory build-up for winters. Also, the economic recovery fueled the demand for natural gas owing to its increased commercial and industrial usage.
Moreover, the natural gas prices are expected to remain high in winters primarily due to lower inventory and higher demand. Evidently, the U.S. Energy Information Administration (EIA) indicated in its latest energy outlook report that the inventories will end 5% below the five-year average in the 2021 injection season (October end).Moreover, the U.S. industry is suffering from lower production of natural gas due to Hurricane Ida, with 77.3% of Gulf of Mexico production still shut in, as stated by a CNBC report on Sep 9.
The aforementioned factors are likely to drive the natural gas prices going forward, resulting in higher utility bills for Piedmont Natural Gas customers in North and South Carolina.
Benefits of Rate Hike
The aforementioned rate increase will result in a North Carolina residential customer of Piedmont Natural Gas witnessing a hike of $11.34 per month or $136 per year in cumulative monthly bills beginning Nov 1. While customers in South Carolina can expect an increase of approximately $11 per month or $132 per year.
This rate hike should take Piedmont Natural Gas a step closer toward achieving its request for a 10.4% revenue hike, originally filed in March 2021.
Looking Ahead
Duke Energy aims to fulfill its objectives by investing heavily in infrastructure and expansion projects. To this end, it is imperative to mention that the company has a robust five-year capital plan and currently intends to invest $59 billion in its overall growth projects, including an investment of $ 5.7 billion in its Gas Utilities & Infrastructure growth projects, during the 2021-2025-time period.
The aforementioned rate hikes will enable Duke Energy to make such hefty investments, thereby boosting its generation and distribution systems, and customer reliability.
Peer Moves
Duke Energy’s latest rate hike decision is not an oddity; other major utility companies such as NextEra Energy’s (NEE - Free Report) , NorthWestern Corporation (NWE - Free Report) and Ameren Corporation (AEE - Free Report) have also proposed an increase in gas rates for their customers.
For instance, in August, NextEra Energy’s subsidiary, Florida Power & Light Company, in collaboration with other customer groups filed a request to increase energy rates by $3 billion over the next four years.
Similarly, in April, Ameren filed a proposal to increase rates for its Missouri natural gas residential customers by $4 per month.
In July, NorthWestern Energy announced that electric utility regulators have approved a rate hike of $2.28 for its average residential customer monthly bill.
Duke Energy (DUK - Free Report) Set to Raise Natural Gas Rates in Winter
Teaser- Duke Energy Corp’s (DUK - Free Report) subsidiary, Piedmont Natural Gas, to hike electricity rates for its North and South Carolina customers this winter.
Duke Energy Corp’s (DUK - Free Report) subsidiary, Piedmont Natural Gas, recently revealed that its customers in North and South Carolina will witness higher bills this winter. It also unveiled tools, tips and assistance programs to help customers deal with higher winter bills.
Rationale Behind the Rate Hike
Commodity costs of natural gas prices have been soaring globally this year, resulting in higher prices for natural gas. Warmer-than-usual summers that led to higher electricity consumption, on account of air conditioning, and increased liquid natural gas exports have collectively contributed to low levels of inventory build-up for winters. Also, the economic recovery fueled the demand for natural gas owing to its increased commercial and industrial usage.
Moreover, the natural gas prices are expected to remain high in winters primarily due to lower inventory and higher demand. Evidently, the U.S. Energy Information Administration (EIA) indicated in its latest energy outlook report that the inventories will end 5% below the five-year average in the 2021 injection season (October end). Moreover, the U.S. industry is suffering from lower production of natural gas due to Hurricane Ida, with 77.3% of Gulf of Mexico production still shut in, as stated by a CNBC report on Sep 9.
The aforementioned factors are likely to drive the natural gas prices going forward, resulting in higher utility bills for Piedmont Natural Gas customers in North and South Carolina.
Benefits of Rate Hike
The aforementioned rate increase will result in a North Carolina residential customer of Piedmont Natural Gas witnessing a hike of $11.34 per month or $136 per year in cumulative monthly bills beginning Nov 1. While customers in South Carolina can expect an increase of approximately $11 per month or $132 per year.
This rate hike should take Piedmont Natural Gas a step closer toward achieving its request for a 10.4% revenue hike, originally filed in March 2021.
Looking Ahead
Duke Energy aims to fulfill its objectives by investing heavily in infrastructure and expansion projects. To this end, it is imperative to mention that the company has a robust five-year capital plan and currently intends to invest $59 billion in its overall growth projects, including an investment of $ 5.7 billion in its Gas Utilities & Infrastructure growth projects, during the 2021-2025-time period.
The aforementioned rate hikes will enable Duke Energy to make such hefty investments, thereby boosting its generation and distribution systems, and customer reliability.
Peer Moves
Duke Energy’s latest rate hike decision is not an oddity; other major utility companies such as NextEra Energy’s (NEE - Free Report) , NorthWestern Corporation (NWE - Free Report) and Ameren Corporation (AEE - Free Report) have also proposed an increase in gas rates for their customers.
For instance, in August, NextEra Energy’s subsidiary, Florida Power & Light Company, in collaboration with other customer groups filed a request to increase energy rates by $3 billion over the next four years.
Similarly, in April, Ameren filed a proposal to increase rates for its Missouri natural gas residential customers by $4 per month.
In July, NorthWestern Energy announced that electric utility regulators have approved a rate hike of $2.28 for its average residential customer monthly bill.
Image: Bigstock
Duke Energy (DUK) Set to Raise Natural Gas Rates in Winter
Rationale Behind the Rate Hike
Benefits of Rate Hike
Looking Ahead
Peer Moves