Regulators deny Duke Energy's proposed rate hike

May 8, 2015

Indiana regulators denied a request by Duke Energy to raise rates over the next seven years, saying the request didn't provide enough detail to justify the $1.9 billion cost.

Ratepayer advocates, who argued that Duke's transmission and distribution system improvement plan went beyond what's allowed by law, applauded the Indiana Utility Regulatory Commission decision. The IURC denied a similar request by Indiana Michigan Power in a ruling also handed down on Friday.

“The IURC orders denying the requests from Duke Energy and Indiana Michigan Power (I&M) are significant victories for consumers. They also send a strong statement to utilities that when they seek higher rates, they must clearly justify their requests with sufficient cost support,” Utility Consumer Counselor David Stippler said.

If approved, Duke customers would have seen rates rise1 percent per year, on average, from 2016 through 2022.

Duke spokeswoman Angeline Protogere said one option the utility might pursue is to file a revised plan and address issues the IURC raised.

“Our electric grid is aging and many components need to be updated and replaced,” she said.

Protogere said Duke would like to take advantage of advanced technology that can pinpoint power outages, speed service restoration and provide for better, faster communication with customers.

Citizens Action Coalition pointed out that Duke hoped to recover costs for items that wouldn't be considered part of the transmission and distribution system, such as a $1.5 million customer contact software system and $48.5 million in tree trimming.

CAC opposed Duke's proposal to include the installation of “smart” meters in homes and businesses at a cost of $177 million. CAC pointed out that Duke hoped to continue earning a return on investment for the old meters while simultaneously recovering costs and earning a profit on the new meters.

Duke's plan represented one of the first times that a new law, passed in 2013, allowing utility companies to recover costs on an expedited basis has been interpreted, Protogere said. The Indiana Court of Appeals recently ruled on a similar case for NIPSCO, so the law is being clarified for all utilities, she said.
CAC Executive Director Kerwin Olson said the IURC's decision points to the need to repeal the 2013 law, advocated by utility companies.

“Duke thought they could cram through this expensive, unnecessary plan after they paid for the passage of this dangerous legislation,” he said.


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