Duke Energy’s (DUK - Free Report) subsidiary — Duke Energy Carolinas — applied for new rates to the North Carolina Utilities Commission (“NCUC”). The company will pass the savings from recent federal tax reform to all customers groups.
The new electric rates will be phased out over the next four years and will decline by average 1.34% post NCUC’s approval and adjust to a 0.22% fall in August 2022
However, residential customers will experience a marginal increase in utility bills. A customer using 1,000 kilowatt-hours (kWh) of electricity per month will see an increase to $104.69 from the current level of $103.85 once new rates are approved.
Benefits to Customers and Shareholders
Duke Energy is committed to help customers manage electricity costs through lower bills and energy-efficiency programs. The company intends to pass on $142 million in annual tax savings to electric bills of Indiana-based customers.
Moreover, the board of directors has approved a quarterly cash dividend of 93 cents per share on its common stock. This will mark a quarterly increase of 3.75 cents or 4.2%.
The company has an energy assistance fund — Share the Warmth — which was formed in 1985 to help low-income customers to manage winter heating bills. Its shareholders will contribute $4 million to the fund.
Tax Reform Benefit Customers
The latest tax reform has lowered the accrued tax expenses for the utilities. The companies are passing on this benefit to customers, which lowered utility rates and bills. Duke Energy along with other utilities like Avangrid, Inc (AGR - Free Report) , NextEra Energy, Inc (NEE - Free Report) and Southern Company (SO - Free Report) are transferring the federal tax savings to the customers.
In the past three months, shares of Duke Energy have outperformed the industry. The stock has gained 3.5% compared with the industry’s rise of 1.6%.
Duke Energy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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