July 20, 2012

Update:  On July 9, 2012, Duke filed an application for increase of its natural gas rates in which it seeks an increase in the amount of $44.6 million.  Duke is currently earning a 4.9% rate of return and is seeking an 8.13% rate of return.  Duke proposes that the increases take effect in January 2013.  The proposed rate increases (on average, depending on usage and not including the cost of gas) are as follows:

GS-S (General Service-Small):    3%-41%
GS-L (General Service-Large):    20%-31%
FT-S (Firm Transportation-Small):    3%-41%
FT-L (Firm Transportation-Large):    20%-31%
IT (Interruptible Transportation):    14%

Duke also proposes to continue its Accelerated Main Replacement Program (“AMRP”).  This program was initiated in 2001 to replace bare steel and cast iron mains that were installed many years ago and have high leak and breakage levels.  Duke proposes to also use the AMRP to continue replacing risers that are prone to fail and to move inside meters outside.  Duke anticipates spending $211 million between 2012 and 2015 to complete this program.

Duke also is proposing a new program, the Accelerated Service Replacement Program (“ASRP”), to replace both pre-1971 coated steel main-to-curb and curb-to-meter service lines and other unprotected metallic service lines that are not covered under the AMRP.  Duke expects to spend $307 million between 2013 and 2022 on the ASRP program.  The estimated annual average amount of this revenue increase (not rate increase) per customer class is: $20.3 million average annual for residential customers, and; $1.8 million average annual for general service and firm transportation customers.

Additionally, Duke plans to continue its Advanced Utility (“AU”) rider, which recovers costs of grid modernization, including Advanced Metering Infrastructure (“AMI”).  Duke expects to spend $31 million between 2012 and 2014 to complete this program.