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Duke plans $1.9B in upgrades, seeks rate hike

Mason King
August 29, 2014
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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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  • IOWA
    Wind and solar seems to be working pretty well in other markets MrGadget. Iowa now gets > 10% of all power from wind. Why can't Indiana keep up? Iowa isn't exactly California if you know what I mean yet they're still running circles around us.
  • can we remember Marble Hill
    Seems like they keep wasting money, maybe some competition is in order, from out of state or perhaps contract to out of the U.S. companies
  • let Duke pay for it
    If they want to do this, what do the customers get. To what benefit, why charge the customer for their profit.
  • Wasted time on facts
    EPA? Gun to the head? Ummm is this about their coal ash polluting groundwater? The Dan River coal ash spills? Following the EPA mandated to reduce Utility Mercury and Air Toxics that were issued for all coal-fired electricity producing plant (regardless of the corporate ownership?) The diesel fuel spill into the Ohio River? The Edwardsport coal gasification plant cost overruns -- ooops that one is not EPA. Sorry MrGadget, Duke is not interested in core improvements unless it benefits their shareholders. From earlier the 2014Q2 SEC 10Q filing Duke Energy reported earnings of $609 million for Q2 2014, up 80% over earnings of $339 million for the same period last year. Duke's regulated utilities drove the increase in earnings and posted adjusted earnings of $689 million for Q2 2014, up over $590 million for the same period last year. The regulated utilities' earnings increase was due to higher customer rates, warmer-than-usual weather that drove greater electricity consumption and a tax settlement. The smart meter project (as proposed so far) is a method to reduce labor costs and further hide actual usage readings by the consumer. The smokescreen of "grid" improvements does nothing to resolve the normal outage issues that occur in the delivery last mile. Maybe it will permit them to build more lines to their wind farms that are insufficiently sourced with collection lines. The net of this proposed rate increase is to keep the operational status quo and keep shareholder dividends high. To think there is a corporate conscious attempt to really improve the grid infrastructure is to be painfully unaware of the evolving utility industry.
  • Forfeit some profit?
    If they want to hike the rates, I assume they are going to be forfeiting some of their profits as well to pay for the investment?
  • Wasted on Wind and Solar
    Ask Duke what they spent on wind and solar, both in infrastructure and in triple rate, under Federal mandate, and what little they got for it. Perhaps if the EPA hadn't put a gun to their heads for that mess they'd have the money for their core improvements.
    • Florida anyone?
      http://www.abcactionnews.com/news/duke-energy-customers-angry-about-money-for-nothing
    • You want what?
      Why should citizens rates increase forever to basically reduce Dukes cost to operate in the future? They will have no meter readers, no connect/disconnect personnel and will need fewer lineman to handle the same number of customers. Add to that the ability to replace customer service by giving detailed information electronically. Why do we have to subsidize the cost cutting measures of a Public Utility?
    • Duke has trust issues
      With all the past shady actions of Duke with utility regulators, one wonders do they really need such a huge amount? Concerned regulators not protecting ratepayers from the aggressive Duke monolith.
    • Planning
      Much like a homeowner needs to plan for needed maintenance and future renovations, why shouldn't the Utility companies do the same? Save each year to accommodate the upgrades instead of just increasing rates and charging more. Duke Energy pulled a nearly $3 Billion profit last year.

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