Duke Energy and Electric and Utilities

Duke plans $1.9B in upgrades, seeks rate hike

August 29, 2014

Duke Energy Indiana wants to spend $1.9 billion over seven years to modernize the electricity grid that delivers power to more than 800,000 Hoosier homes and businesses.

The utility said Friday that its customers would see a gradual rate increase due to the project averaging about 1 percent per year between 2016 and 2022.

Under a plan submitted to the Indiana Utility Regulatory Commission on Friday, Duke would embark on a combination of technology and infrastructure upgrades that would reduce power outages to customers, it said.

Using so-called “self-healing” systems, the grid could automatically detect problems such as a downed power line and then reroute the power to minimize the number of customers affected.

The reliability of the system also would be improved by updating and replacing infrastructure such as substations, utility poles, power lines and transformers.

Other advantages would include advanced meters that can report customer usage automatically, eliminating the need for in-person, walk-by meter reading and estimated billing when homeowners’ properties can’t be accessed.

The new meters also would provide more data to customers about their usage, which could be used to better manage their consumption.

The IURC is expected to set a schedule of hearings for Duke Indiana’s plans in coming months.

Consumer advocacy group Citizens Action Coalition did not have any immediate objections to the plan, Executive Director Kerwin Olson told IBJ on Friday. The group will study it over the coming weeks.

“As always, the devil is in the details,” Olson said. “This is a significant amount of money, and we have some significant concerns on the impact this will have on ratepayers.”

The group plans to examine elements such as whether some infrastructure targeted by Duke actually needs to be replaced or still has a useful life.

One element of the advanced metering system that gives consumer advocates pause is the ability for Duke to connect and disconnect service remotely, instead of sending a technician to activate or deactivate service.

Advocates would want to make sure Duke adequately works with customers struggling to pay their bills before remotely disconnecting them, Olson said.

Duke Energy Indiana generates, transmits and distributes electricity in central, north-central and southern Indiana—with the exception of Indianapolis and portions of some surrounding communities, which are covered by Indianapolis Power & Light Co.

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