Apr 3 - McClatchy-Tribune Regional News - Christopher D. Kirkpatrick The Charlotte Observer, N.C.

Power bills are the latest consumer expense set to increase as Duke Energy moves to pass on skyrocketing coal prices to its customers.

The average monthly bill will likely increase this fall by about $3 in North Carolina as coal prices post never-before-seen highs.

It's another example of how rising energy costs are stressing family budgets as the national and local economies continue to slow.

Earlier this week, the region's two biggest natural gas utilities asked N.C. regulators for permission to hike rates. And gasoline and diesel prices, though stabilized recently, still hover at record levels, with the effect rippling through the economy.

Higher diesel prices mean higher costs for food and other retail goods delivered by truck. And summer is coming, when fuel prices usually spike.

Lee Tabor, a married mother of two who owns USMortgage in the SouthPark area, said her family is feeling the energy crunch. To battle high gasoline prices, she upgraded on fuel efficiency in December from a gas-guzzling Chevy Tahoe (14 mpg), to a Honda Accord (28 mpg).

But on the home utility front, she and her family just have to take it, she said. It would cost too much to make their 1930s stone home in Myers Park more energy efficient by reinsulating or replacing windows, she said. "Who has an extra $10,000 to throw at that problem?"

The Tabor power bills have exceeded $300 a month in the summer and natural gas bills $400 a month in the coldest winter months, she said. "That chokes you."

"From a mom's viewpoint and a businesswoman's viewpoint, there's an extra fee on everything you do these days. You go to the grocery store, and it's higher. It costs a fortune to fill up your car. Families have to find their own way to conserve."

Most families should be able to absorb rising energy costs, if they plan ahead, said Mary Quinn, director of Charlotte Saves, a nonprofit that counsels families on how to save money.

"It does make it difficult when energy prices go up. But when you're not keeping track of your expenditures to begin with, it makes it that much more difficult," she said. "Most people, they don't change any of their behaviors."

One reason this energy price spike doesn't feel as bad as the 1970s and 1980s oil shocks: Energy costs now make up a smaller percentage of household expenses. In the early 1980s, at the height of the last energy crisis, energy accounted for about 8 percent of household spending. In December, energy's share of disposable income stood at 6.1 percent.

Coal, burned to generate more than half of Duke's power in the Carolinas, has more than doubled in price since October. And ratepayers will feel the pinch, said James McLawhorn, a director with the public staff, the consumer advocacy arm of the N.C. Utilities Commission.

Rapid power plant construction in China has "put pressure on domestic supply. And coal prices have risen across the board," he said.

ENERGY CRUNCH:

--Duke Energy has filed a request with the N.C. Utilities Commission for a fuel price adjustment to compensate the utility for the rising price of coal that provides about half of the power for its Carolinas customers. Fuel costs are passed to consumers through an annual adjustment to power bills. The last time it was adjusted downward was in 2002. The request, if approved, would increase the average residential bill 4 percent. That translates to $3 added to the average N.C. power bill of about $80 a month. The Charlotte-based company plans to ask for an increase in South Carolina of up to 10 percent, or about $8 a month. Commercial customers in the Carolinas would see even bigger percentage increases. The N.C. adjustment would take effect in September, and the S.C. adjustment in October.Duke's fuel rate is separate from its base rate, which is meant to cover day-to-day expenses, major project costs and a built-in profit margin. Duke decreased its base rate in January as part of a special deal with state regulators.

--Piedmont Natural Gas, based in Charlotte, and Gastonia-based PSNC Energy, filed separate requests Monday with the N.C. commission to raise their base rates. Piedmont wants to increase the average N.C. bill by 4 percent, which would tack on an extra $48 a year. The company cited the higher cost of doing business as Charlotte and the state's population expands. PSNC asked for a 3 percent increase, which would add an extra $36 a year to the average bill.

COAL PRICES SKYROCKETING: Coal prices have been increasing for about two years. They've touched record highs this year, in the $100-a-ton range on the commodities markets and doubled since October. Last week, prices were hovering in the $85-$110 range, depending on the type of coal, according to the U.S. Energy Information Administration. They were less than $50 a ton in October. Duke Energy relies heavily on coal, burning it to produce about half of its electricity in the Carolinas and nearly all of it in its three Midwest states of Indiana, Kentucky and Ohio. About 46-48 percent of Duke's power in the Carolinas comes from nuclear plants.

The New York Times contributed.