Duke Energy’s Indiana regional headquarters is shown in Plainfield.
A state agency that advocates in the interest of Indiana consumers has recommended slashing Duke Energy Indiana’s requested rate increase by more than 60% and keeping the utility’s monthly residential and small commercial customer service charges unchanged.
The Indiana Office of Utility Consumer Counselor (OUCC) on Friday released its recommendation that Duke’s request of a 16.2% base rate increase for electricity customers be reduced to an increase of 6.1%.
Duke sought an increase that would generate $491.5 million, but the OUCC’s recommended increase would instead raise an additional $184.7 million, the agency said. Among other things, Duke has sought the increase to clean up toxic coal ash remaining from burning coal to generate electricity.
The Indiana Utility Regulatory Commission (IURC) ultimately will decide on any rate increase for Duke, Indiana’s largest investor-owned utility, which provides service to more than 813,000 customers in central and southern Indiana, including Bartholomew and surrounding counties.
The OUCC said its analysis shows is based on the case’s evidence and applicable law. Ten OUCC witnesses filed testimony with the IURC this week, following a three-month legal and technical review of the testimony, exhibits, and work papers filed by the utility. The OUCC’s testimony notes that most of the increase requested is due to capital projects that received IURC preapproval and are now being included in rates as is provided by state law.
“The significant reduction we recommend to Duke Energy’s request is based on a thorough analysis by our attorneys and technical staff, and it balances the need for reliable service with the affordability concerns raised by our staff and by the hundreds of customers who have spoken out on the request,” said Indiana Utility Consumer Counselor Bill Fine.
The OUCC’s testimony recommends:
- Keeping Duke Energy’s monthly residential customer service charge at $10.54. The utility proposes raising the charge to $13.70 in this case. OUCC recommendations would also hold small commercial customer service charges at their current levels.
- Reducing the utility’s authorized return on equity (profit) to 9%. Duke Energy Indiana requests a 10.5% return. Its current authorized return of 9.7% received IURC approval in 2020.
- Decreasing the utility’s proposed depreciation expense and reducing numerous line items from the utility’s proposed amounts for operating and maintenance expenses.
- Denial of Duke Energy’s request to recover $92.1 million in coal ash remediation costs. The Indiana Court of Appeals found Duke was not entitled to recover these costs. The utility is requesting recovery now under a different legal theory.
The OUCC included nearly 3,000 written consumer comments and petition signatures in this week’s filing with the Commission. In addition, 74 Duke Energy customers spoke at the three public field hearings the IURC held in this case in June.
Among organizations opposing Duke’s proposed rate increase are the Citizens Action Coalition, Earthjustice and the Hoosier Environmental Council.
“If Duke’s request is approved as filed, a residential customer using 1,000 kWh per month would see their bill increase from $128.60 as of April 2024, to $170.67 by March 2026, or an increase of $42.07 (32.7%),” Citizens Action Coalition said in a news release Friday.
“… Duke’s proposal would impose extreme rate shock and unfairly burden its residential customer base, which has experienced significant and worsening affordability challenges,” declared Ben Inskeep, CAC program director.
In a statement Friday afternoon, Duke Indiana spokesperson Angeline Protogere said the utility was still reviewing testimony.
“There will be extensive hearings before state utility regulators beginning in late August, and all the parties involved will present evidence to support their positions. State regulators will carefully weigh all the information before they make a decision early next year,” Protogere said.
“Our request centers on the $1.6 billion in improvements we’ve made in a modernized electric grid to reduce power outages, hundreds of miles of new power lines, environmental responsibilities, investments in reliability at our power plants, and increased electric grid security in the wake of attacks nationally. We made these long-term investments while keeping our daily operating expenses flat since 2020,” the utility said in a statement.
Rebuttal testimony from Duke Energy is due on Aug. 8, with an IURC evidentiary hearing scheduled to start on Aug. 29. A final commission order is expected in early 2025.
The OUCC is posting case updates online at https://www.in.gov/oucc/electric/key-cases-by-utility/duke-energy-rates/duke-energy-rate-case/. Case updates are also available through the agency’s monthly electronic newsletter. Consumers can subscribe at www.in.gov/oucc/news. The rate case is IURC Cause No. 46038.
Editor’s note: This article has been updated with comments from Duke Energy.
