Duke Energy requests rate increase

(THE REPORTER) — A modernized electric grid more resistant to power outages, hundreds of miles of new power lines, environmental responsibilities, increased electric grid security and new systems for customer convenience are some of the key parts of Duke Energy’s Indiana rate request submitted to state utility regulators.

“Since our last base rate increase in 2020, we’ve invested $1.6 billion in our electric grid, power plants and overall system on behalf of our customers, including advanced technology that has helped prevent more than 185,000 power outages,” Duke Energy Indiana President Stan Pinegar said. “We know that utility costs can be a major part of a household and business’s budget and that customers expect us to do our part to keep bills as low as possible. We have kept our day-to-day operating costs flat since 2020 while we make long-term investments to serve customers. We also are proposing voluntary, ‘time-of-use’ rates to help manage customer bills. Fortunately, fuel costs for our electricity production have declined, and residential customer bills are about 25 percent lower than they were in late 2022.”

Filed on April 4 with the Indiana Utility Regulatory Commission, the request is for an overall average bill increase of approximately 16 percent, which, if approved, would be added to bills in two steps, approximately 12 percent in 2025 and about 4 percent in 2026. The annual revenue increase would be $492 million.

The increase will vary among consumers depending on the cost to serve different types of customers, such as residential and business. The total monthly impact of the two steps for a residential customer using 1,000 kilowatt-hours a month would be about 19 percent, or $27.63.

As a regulated business, Duke Energy’s rates can only be changed after approval from state utility regulators, so there is no immediate impact from this request. There will be extensive public proceedings, including opportunities for customer input. A regulatory decision is possible in early 2025.

To help customers manage their electric bills, Duke Energy is proposing time-of-use rates where customers can shift some of their power use to times of day when energy is less expensive. If the program is approved, it would be voluntary for residential, commercial, and industrial customers interested in participating.

Investments, improvements & upgrades

Some of the components of Duke Energy’s request include:

• Duke Energy is adding state-of-the-art sensors to its Indiana power lines. Much like the GPS in a car that can identify an accident ahead and reroute a driver around the incident, the technology can quickly identify power outages and alternate energy pathways to restore service faster for customers when an outage occurs. Click here to see a video of how the technology works.
• The company is hardening its system against severe weather to reduce power outages, including changing wood poles to steel, undergrounding power lines in targeted, outage-prone areas, and rebuilding miles of overhead lines. When last spring’s tornadoes ripped through Indiana, steel structures on Duke Energy’s Indiana system withstood the weather.
• In the wake of physical attacks to the electric grid nationally, the company is taking steps to improve physical security and protections at some of its key infrastructure delivering power to Indiana communities.
• Indiana’s economy is growing, and Duke Energy expects to have more than 60,000 new residential and business customers by 2025. The company is adding 345 miles of new power lines and infrastructure to serve them.
• Federal rules require changes to the management of coal ash generated from electricity production and stored at power plant sites. Duke Energy is closing its Indiana ash basins responsibly and in compliance with environmental regulations.
• The company needs to keep pace with evolving customer needs and expectations and has installed new systems, such as the ability for customers to initiate service at a new location online and receive service the same day.

Energy assistance & bill management

In addition to the proposed time-of-use rates, Duke Energy has more than a dozen energy assistance and bill-lowering tools, including:

• Usage Alerts that send customers a notification of how much electricity they are using and its cost so they can make adjustments before their billing period ends.
• Free Home Energy House Calls, where energy professionals assess a home for efficiency and provide homeowners with a toolkit of energy saving devices.
• Budget Billing, which helps ease the impact of higher seasonal bills by leveling out monthly payments.
• Interest-free payment plans for customers needing flexibility.
• Share the Light program funded by Duke Energy shareholders for qualifying customers who may be struggling to pay their energy bills.

For more information about these programs and others, visit duke-energy.com/LowerMyBills. There is also more information on this rate request at duke-energy.com/IN-Rates.

Reporter asks for clarity

After receiving a press release from Duke Energy about their April 4 request to the state for a 16 percent rate increase over the next two years, The Reporter reached out to Duke Energy Senior Communications Manager McKenzie Barbknecht for some clarity on how the “voluntary time-of-use rates” will work.

“When energy demand is low, meaning fewer people are using electricity, your rate would be lower,” Barbknecht said. “Alternatively, when electricity is in high demand and the grid is working hard, then prices are higher. By shifting your energy use to times of less demand, you could save on your bill.”

On-peak hours are defined by Duke as 6 to 8 a.m. and 5 to 9 p.m. in winter months and as 5 to 9 p.m. in summer months. During this time, you would pay more per kilowatt-hour (kWh) used if you opt in to the program.

The discount period will be 10 p.m. to 4 a.m.

“The discount period would provide customers an even lower kWh charge than standard off-peak hours,” Barbknecht told The Reporter. “While anyone can save by shifting usage to these hours, customers with electric vehicles who charge overnight can greatly benefit from this time period.”

Off-peak hours are defined by Duke Energy as “all other times of the day not designated as on-peak or discount hours when there is less demand on the system and electricity prices are lower and well-suited for energy-intensive tasks.”

According to Barbknecht, this would be an entirely voluntary program. Customers would need to opt into the program to participate.

When asked how Duke expects people to shift their electric demand to off-peak hours, she offered the following suggestions:

• Program your thermostat so you use less during on-peak hours.
• Set your dishwasher timer to run overnight.
• Run your washer and dryer during off-peak and discount hours.
• Have an EV? Charge your electric vehicle at night when energy is less expensive.
• Have a pool? Schedule it to run during off-peak and discount hours.

“Again, this would be a voluntary program that’s designed to give customers more control over their energy use, if they choose to participate,” Barbknecht said.

In the last several years, Duke Energy has taken several steps to strengthen the electric grid and increase reliability as the demand increases and the county grows. Some of those include:

• Upgraded power line circuits along Olio Road in Fishers to improve reliability, reduce power outages, and support growth in the region.
• Upgraded power line circuits fed through its substations in Westfield and Noblesville. Crews have installed modernized equipment and automated technologies along the power line circuits that can automatically restore power (like the circuit breakers in your house) or reroute power to other power lines to help mitigate outages.
• Upgraded physical security measures at key substations, including in Hamilton County. These new technologies will help the company proactively identify threats and potential issues before a bad actor is able to damage critical assets.

As far as The Reporter can tell, those did not come with rate increases.

“In addition to the examples I provided earlier – Duke Energy is investing, on average, $25 million each year in infrastructure in Hamilton County to meet the increasing energy needs of the community,” Barbknecht said.