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-21- <br />EXHIBIT NO. P -2 <br />PAGE 7 OF 12 <br />APPENDIX A <br />PAGE 1 OF 6 <br />NOTICE OF PUBLIC HEARINGS <br />PROGRESS ENERGY CAROLINAS, INC. <br />DOCKET NO. E -2, SUB 1023 <br />BEFORE THE NORTH CAROLINA UTILITIES COMMISSION <br />NOTICE IS GIVEN that on October 12, 2012, Carolina Power & Light Company, <br />d /b /a Progress Energy Carolinas, Inc. (PEC or the Company), filed an application with <br />the Commission requesting authority to adjust and increase its rates for retail electric <br />service in North Carolina. <br />In this application, the Company is requesting authority to increase its rates and <br />charges to produce additional overall annual North Carolina retail base revenues of <br />approximately $387, an increase of approximately 12% over current revenues: PEC is <br />seeking approval of a return on common equity of 11.25 %. The Company serves <br />approximately 1.5 million retail customers in North and South Carolina. <br />In support of the requested increase, PEC has stated that approximately $257 <br />million, or over 70 %, of its request for a rate increase, is attributable to the <br />approximately $2.3 billion of capital invested in the Company's modernization program <br />that consists of replacing, upgrading, and retiring' generation plants and transmission <br />and distribution systems. PEC indicated that the remainder of the request is generally <br />the result of increased expenses relating to nuclear operations, the Company's adoption <br />of a cyclical -based vegetation management program, lower usage per customer and <br />slower growth, increased pension costs, and other miscellaneous costs. PEC has offset <br />the additional revenue requirements requested with $9 million of net savings expected <br />from the merger of Duke Energy Corporation and Progress Energy, Inc. <br />Additionally, PEC has proposed transferring the costs of its Distribution System <br />Demand Response (DSDR) program from its Demand -Side Management and Energy <br />Efficiency (DSM /EE) rider into its base rates. The increase to the Company's base <br />rates associated with the transfer will be offset by a corresponding reduction to PEC's <br />DSM /EE rider in the amount of $28 million.. When this transfer of the DSDR program <br />into base rates -is considered in conjunction with the application for an increase in base <br />rates, the net additional overall annual North Carolina retail revenues requested by PEC <br />are approximately $359 million, a net average increase of 11 %. <br />VJi <br />