Duke Energy Corp.’s (DUK - Free Report) subsidiary — Duke Energy Progress — recently announced that North Carolina Utilities Commission has approved new lower electric rates for North Carolina customers.
The approval will reduce residential customers’ energy bill by nearly 3.2%, commercial customers’ cost by 4.5% and the same for industrial customers by 1.6%.
The approved rate also includes annual changes in costs associated with fuel, compliance with the state's renewable energy portfolio standard (REPS), cost recovery under the Joint Agency Asset Rider (JAAR). The new fuel, REPS and JAAR rates went into effect from Dec 1, 2019. The commission also requested to implement changed rates of energy efficiency (EE) and demand-side management (DSM) programs, which will be effective from Jan 1, 2020.
The primary reason driving the electric rate cut is the decline of the cost of fuel used to power North Carolina homes and businesses. The company makes no profit from the fuel component in its energy prices and passes the impact of decline or increase in fuel prices to customers.
Customers to Benefit From Rate Reduction
Utility companies are mostly regulated and require systematic investments for its infrastructural investments. Maintained and upgraded infrastructure enables these companies to provide reliable services to their customer bases. The utilities recoup the invested amount through rate revisions approved by the commissions. However, usage of cheaper fuel and introduction of new technology in generation and distribution systems enable the utilities to reduce rates.
Courtesy of the rate revision, a typical residential customer that consumes 1,000 kilowatt-hours of electricity will receive reduction of $3.81 per monthly bills for North Carolina customers to $116.63.
Zacks Rank and Price Movement
Duke Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of the company have inched up 1.1% in year to date compared with the industry’s growth of 17.8%.
Some better-ranked stocks from the same industry are Eversource Energy (ES - Free Report) , Edison International (EIX - Free Report) and FirstEnergy Corporation (FE - Free Report) . All the three stocks hold a Zacks Rank #2 (Buy).
Long-term earnings growth of Eversource, Edison International and FirstEnergy is pegged at 5.63%, 5.27% and 6%, respectively.
Eversource, Edison International and FirstEnergy delivered an average positive earnings surprise of 2.39%, 0.09% and 2.87% in the last four quarters, respectively.
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