Duke Energy, the Indiana Office of Utility Consumer Counselor (OUCC), industrial customers and other stakeholders recently reached a settlement agreement on costs and rate increases that will let Duke Energy proceed with its planned infrastructure improvement project.
The project will require periodic rate increases for customers, who will experience $400 million less in rate hikes under the agreement over the next seven years. The Indiana Utility Regulatory Commission (IURC) must sign off on the agreement.
Duke Energy has come to the IURC twice now with a seven-year plan that aims to fall within Indiana's Transmission, Distribution, and Storage System Improvement Charge (TDSIC) statute.
If the settlement is accepted, Duke Energy can pursue rate increases that total no more than $1.4 billion. Customers should expect to see Duke's original $192 million plan for an advanced metering system revoked, as the OUCC did not consider it feasible under a 2013 law. Duke also plans to cut $175 million in transmission projects, as well as $30 million from distribution costs. Furthermore, Duke seeks to lower its original proposed 10.5 percent return on equity (ROE) to 10.0 percent ROE.
“I am pleased that the OUCC has been able to negotiate a compromise with Duke Energy regarding its pending infrastructure plan. Indiana Utility Consumer Counselor David Stippler said. "Building upon the experience that our office and the utility have gained since Duke Energy’s earlier TDSIC case, the parties were able to attain a reasonable balance between Duke Energy’s need to modernize its infrastructure and the rate impact such a proposed plan would have on its customers. This agreement enables Duke Energy to continue to provide safe, reliable service to its customers while doing so in the most cost-effective way possible.”
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