Indiana regulators side with Duke Energy on rate-hike paperwork case

In a victory for Duke Energy Indiana and a setback for several customer groups and consumer activists, Indiana regulators have rejected a motion that would have required the utility to refile thousands of pages of paperwork in a rate case to make it easier for outsiders to verify the company’s forecasts.

The Indiana Utility Regulatory Commission ruled Monday that Duke Energy had met its obligations to provide relevant information, and said the outside parties waited too long to file their motion.

The ruling was a disappointment for numerous large groups and customers that had urged the IURC to order Duke Energy to make its information more accessible online, so they could check the company’s forecasts and assumptions.

Duke Energy wants to raise electricity rates, saying it needs more revenue to improve the reliability of electric service, offset costs of generating cleaner energy and serve a growing customer base.

Under its request, more than 800,000 customers could see their monthly bills jump—but by different amounts. A typical residential customer using 1,000 kilowatt hours a month could see a monthly increase of 20.4%, or about $23. A commercial business would see an average increase of 18%. A heavy-industrial consumer, such as a steel mill, would see rates climb about 13%, while a light-industrial customer, such as a metal shop, would see an 18% increase.

Several outside experts hired to double-check Duke Energy’s figures had told the IURC that the utility’s information was incomplete and confusing. Some said the company’s work papers in the rate case did not contain any formulas they could analyze—just tens of thousands of rows of data pasted in from a proprietary software model they could not verify. They said Duke could not explain how the model worked or where to find supporting information.

“In my experience, I have never seen a rate filing that compares to this in terms of the unsupported, inadequate, unorganized and undocumented presentation of evidence,” Jonathan F. Wallach of Resource Insight Inc. in Boston wrote to the IURC on Oct. 11.

Duke Energy said it has responded to more than 80 sets of discovery requests, comprising more than 1,000 individual data sets. It said it has provided even more information through conference calls and emails, exceeding the state’s rules in order to help outside parties.

State regulators ruled that Duke Energy made its “cost of service study model”—software that contained data and formulas—available to other parties in the case at its Plainfield office.

“However, it does not appear that any of the parties availed themselves of this opportunity,” the IURC said in its order.

In addition, the parties waited too late to file their motion, regulators said.

Those asking for more information included the Indiana Office of Utility Consumer Counselor, Citizens Action Coalition of Indiana, the Sierra Club and large customers Walmart Inc., Kroger Co. and Nucor Steel-Indiana.

“It’s simply astonishing that the very agency created to hold monopolies accountable has chosen to do anything but,” said Kerwin Olson, executive director of Citizens Action. “When faced with an extraordinary rate increase, the consumers of Duke Energy deserve better. We are beyond disappointed by today’s ruling. We are reviewing our options.”

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