Duke Energy and North Carolina League of Municipalities

Outdoor Lighting Forum / Oct. 19, 2017

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Outdoor Lighting Rate Case Summary

Duke Energy Carolinas – North Carolina

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Key Points

Lighting rates proposed increase is less than the retail average (10.6% v. 13.6%)

Proposed to update and lower HID transition fees

Proposed to add a new LED to LED transition fee

Schedule PL Proactive Mercury Vapor Program targets completion by end of 2023

Schedule NL (Non-Standard Pilot) will not be available to new applicants

Schedule FL (Floodlight) is merged into other schedules

Traffic Signal Service is requested to increase by 29.0%

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Proposed Lighting Rate Changes

Proposed Revenue Increase for Outdoor Lighting is 10.6%

8.6% decrease to GL

12.8% increase to OL

6.3% increase to PL

Fixture rates under each schedule are increased by an equal percentage

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Proposed Transition Fees

DEC Transition Fees

Transition fees to replace High Pressure Sodium (“HPS”) or Metal Halide (“MH”) to Light Emitting

Diode (“LED”) are lowered.

Impact on Net Book Value from early replacement continues to be a concern.

Proposed Transition Fees impacting governmental customers:

Standard HPS/MH to LED: from $54 to $40 (GL and PL) / from $78 to $57 (OL)

Floodlight HPS/MH to LED: from $142 to $112

Decorative: Retained Loss Due to Early Retirement Calculation due to product variability

Added new LED to LED Transition Fee of $40

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Proposed Mercury Vapor Modernization Plan

Schedule PL - Proactive replacement beginning in 2020 and completing by the end of 2023.

Schedule OL - Proactive replacement is continuing with completion by 2019.

MV lamp lumen output is significantly reduced after six years; but, the lamp failure rate occurs

after approximately 22 years.

MV fixtures should be considered to be “failed” as their light output fades, even though they are

still operating but this isn’t happening.

Company will alert the municipality of the replacement schedule to aid in budgeting.

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Other Changes

North Carolina League of Municipalities Future Engagement

A collaborative exchange of ideas regarding lighting with the League is valued

How can this discussion best be facilitated?

Meet with the League upon request

Meet as new issues of interest arise

Attend the League’s annual meeting

DEC Tariff Administrative Changes

On Schedule OL, the contract term is increased from one year to three years for standard

products

On Schedule FL, the floodlight products are moved to Schedules GL and OL aiding customers in

identifying their fixture options.

On Schedule NL, the Nonstandard Lighting Service Pilot will not be available to new

installations.

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QUESTIONS?

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Duke Energy Progress

Outdoor Lighting Rate Case Summary

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Duke Energy Progress Rate Case – Outdoor Lighting Changes

Requested lighting rate increase is less than the retail average (6.1% vs. 14.9%)

No significant structural changes are being requested

The contributory option for additional/extra facilities related to nonstandard options is removed due to

lack of interest

LED and pole/post rates are increased more than HID fixtures due to lower incremental returns

Common fixture rates requested for area and street lighting schedules

Continues common rates for LED fixtures

Avoids even higher street light rates

Street lighting has a higher increase than area lighting (9.6% vs 4.7%)

Street Lighting continues to have lower pole rates

As of August 2017, 75% of NC street lights use LED technology (was 69% in December 2016)

Traffic Signal Service is requested to increase by 16.3%

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QUESTIONS?

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Lunch Presentation

Local Regulation of Small Cell Wireless Systems by Erin Wynia of NC League of Municipalities

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Duke Energy and Duke Energy Progress

New Product Update

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Consumer Focused: Outdoor Lighting & Communications Infrastructure

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Consumers are driving the need for massive communication density

The assets required are numerous compared to macro sites

The assets follow population and require an intersection of:

Open air, electric power, and fiber backhaul

Utilizing streetlight poles for such assets can help

communications infrastructure achieve scale, speed, and cost

Smart infrastructure requires smart deployment

It requires greater collaboration to achieve mutual benefit

Duke Energy understands that municipalities have critical priorities, like aesthetics, for economic

development

Outdoor lighting assets can and will be used for multiple other interests beyond communications :

security, sensors, cameras, traffic management, etc.

Both networks must be safe and reliable

There’s a Better Way: Lighting Integrated Multi Use Assets

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Poles designed for multi use (lights, small cell, electric, sensors, etc.) serve the needs of all

stakeholders. Integrated poles can improve the overall reliability, cost, and aesthetics, benefitting the

community.

Three poles at one corner - who wins? Integrated asset to serve all

More is Coming Soon: This is Not Just About Communications

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As smart technologies become available, cities and towns will look to

these to ensure their communities are vibrant and appealing for

economic development. The platform for these capabilities is the same as for communications infrastructure.

Wireless Attachments Summary and Next Steps

Duke Energy strongly supports expanded broadband and wireless deployment

The NCLM and Duke have a rare opportunity to increase reliability, reduce cost (multi-use pole vs. multiple poles), and benefit their communities through more integrated planning of outdoor lighting and communications infrastructure

Smart infrastructure requires integrated platforms that move beyond the traditional discussion of pole attachments

Utility lighting assets are non-distribution, unique assets, that will serve multiple community needs beyond communications, need to be aesthetically sensitive, and have economic benefit to multiple parties

Such integration requires policies that promote innovation and collaboration

Duke has created a framework to accommodate communication colocations on its Outdoor Lighting assets and wants the NCLM’s input so we can achieve a common vision of aesthetically pleasing, integrated lighting assets serving our communities

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Upcoming New Products: LED Lighting Controls

Features under consideration:

24/7 Monitoring of LED lights

Simple and quick process to request

change to LED lighting system schedule

Potential upgrade options

Portal to view status of LED luminaires

Periodic system performance reporting

Dimming

Testing & performance validation

have been extended

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Re-organized Outdoor Lighting Structure

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QUESTIONS?

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