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Utility consumer counselor recommends reducing Duke's rate request

By Ethan Sandweiss

Posted July 12, 2024

Duke Energy, which enjoys a monopoly in many parts of Indiana, is requesting permission from the state to increase base rates by 16.2 percent, effectively raising $491.5 million in profits. (Pixabay)

The Indiana Office of the Utility Consumer Counselor (OUCC) wants to reduce Duke Energy’s proposed rate hike by over 60 percent. It filed testimony against the power company’s request this week.

Ultimately the Indiana Utility Regulatory Commission will make that decision, which is supposed to be based on impartial fact finding. The OUCC is also a government office, but its role is to represent and advocate for public interests.

Duke Energy, which enjoys a monopoly in many parts of Indiana, is requesting permission from the state to increase base rates by 16.2 percent, effectively raising $491.5 million in profits. As a public utility, it needs approval from the IURC to do so.

Duke said that increase will pay for grid upgrades, like storm resistant power lines. It also wants to increase its return on equity for shareholders from 9.7 to 10.5 percent.

The OUCC said that only a 6.1 percent base rate increase is warranted, around a $184.7 million increase. It also wants Duke to decrease its return on equity instead raising it.

Utility Consumer Counselor Bill Fine released a statement Friday after reviewing almost 3,000 consumer comments and feedback at public hearings.

“The significant reduction we recommend to Duke Energy’s request is based on a thorough analysis by our attorneys and technical staff, and it balances the need for reliable service with the affordability concerns raised by our staff and by the hundreds of customers who have spoken out on the request,” Fine said.

The office also wants the IURCC to deny Duke’s request to raise customer service charges and recover $92.1 million in coal ash cleanup costs.

The Citizens Action Coalition also filed testimony with the IURC this week against the proposed increase. Program director Ben Inskeep said consumers already struggle to afford bills at current levels.

“Duke Energy is not proposing any meaningful help for these customers who are struggling with affordability, and this free proposal is only going to exacerbate those existing problems,” he said.

Duke Energy spokesperson Angeline Protogere emphasized that the company’s request centers on its $1.6 billion investment in grid improvements since 2020. She added that operating costs have remained flat in the same timeframe.

“It’s not uncommon in legal proceedings such as this for there to be differing viewpoints,” she said. “There are going to be extensive hearings at the end of August before state utility regulators where all parties will present evidence to support their position.”

The IURCC will begin those evidentiary hearings on Aug. 29, but its final decision won’t be out until early 2025.