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Duke Energy Proposes Rate Increases, Major Grid Upgrades

By Gretchen Frazee

Posted August 29, 2014

Duke Energy is proposing a $1.9 billion upgrade to its electricity grid in Indiana.

The company submitted the initial petition to the Indiana Utility Regulatory Commission this morning.

The company's officials say the state's electricity grid desperately needs to be modernized, and it now makes more economical sense to upgrade the entire grid instead of making constant fixes to the current system.

"If Thomas Edison were alive today and took a look at the electric grid, he would say that it looks about the same as it did when he was alive a hundred years ago," Duke Energy spokesman Lew Middleton says.

Middleton says the current grid does a good job getting electricity to people, but there are some problems with it. When a tree falls on a line for example, it cuts off electricity to anyone connected to the line.

The new grid would be able to reroute the electricity around the problem area so not as many people are affected by the outage.

Another advantage of the new system is that Duke Energy would be able to connect and disconnect service from a building or home remotely instead of needing to send an engineer, which costs the company more money.

The upgrades will be paid for with a rate hike of about 1 percent per year from 2016 to 2022-or about a dollar extra each month.

But Citizens Action Coalition Executive Director Kerwin Olson says, first, utility cost estimates are typically lower than actual costs.

"Secondly, every filing that utility companies make, it's a dollar hear, fifty cents there. These utility companies are filing something several times a month at the Utility Regulatory Commission and before you know it you're bill has increased 10 percent from last year," Olson says.

Duke Energy's costs to consumers have increased 10 percent since 2013, according to the IURC.

Olson says he also has concerns about Duke Energy being able to remotely turn off electricity. He says problems could arise if Duke Energy starts turning off electricity on low-income customers who can't afford to pay their bills.

"There are long-standing consumer protections and rights that folks have that are in place in law that require utility companies to take certain steps before disconnecting a customer from the utility system, so we're certainly hopeful that these protections will remain in place," Olson says.

Duke Energy has already used similar technology that would be used in their proposed upgrades in Ohio and in North and South Carolina.

The Indiana Utility Regulatory Commission still has to review the proposal and will hold public hearings later this year before making a final decision.

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