More than 800,000 customers of Duke Energy Indiana could see their monthly bills increase by an average of 15% if the utility receives state permission to increase rates for the first time in about 15 years.
The Plainfield-based company on Tuesday asked the Indiana Utility Regulatory Commission to allow it raise rates in two steps: by 13% in mid-2020 and an additional 2% in 2021. That would generate an additional $395 million in annual revenue, the company said.
The exact amount of the increase would vary among customers. A typical residential customers using 1,000 kilowatt-hours a month could expect a monthly bill increase of about $23 as a result of both steps of the increase, the utility said.
The utility said it is seeking a rate increase to offset the costs of generating cleaner electricity, improving the reliability of electric service and making “investments to serve a growing customer base.”
“We’ve made investments to meet the needs of a customer base that has grown by more than 100,000 since our last full-scale rate review,” Stan Pinegar, president of Duke Energy Indiana, said in a written statement.
Duke Energy had its last rate case in 2004, when the company was known as PSI/Cinergy. It merged with Duke Energy Corp., based in Charlotte, North Carolina, in 2005.
But some consumer groups quickly criticized Duke Energy’s request, saying it represents a steep, sudden increase in rates.
“Asking their customers for an extra $23 every month is an alarming and extraordinary request, especially for households living on low and fixed incomes who have realized little to no increases in income in recent years,” said Kerwin Olson, executive director of Citizens Action Coalition of Indiana. “It’s Hoosier ratepayers struggling to make ends meet that need relief, not Duke Energy, a monopoly who is financially healthy with enormous market value.”
Others pointed out that Duke Energy, the largest electric utility in Indiana, is still relying too heavily on coal. Nearly 90 percent of the power it produced in Indiana last year was coal-fired.
Under pressure to modernize its coal-fired generating fleet, Duke Energy said earlier this week it plans build two natural gas plants and step up its use of solar and wind power. But that could take years to put in place. In detailed plans filed with state regulators, the utility said it wants to keep most of its coal-fired plants in Indiana running through much of the next decade, and some until 2038.
“It is ridiculous that they even talk about clean energy as a rationale for this rate increase when they plan to burn coal for two decades and replace it with fracked gas. They should be ashamed of themselves,” said Wendy Bredhold, senior campaign representative for the Sierra Club’s Beyond Coal Campaign in Indiana.
The Indiana Office of Utility Consumer Counselor, which aims to protect utility consumers, said it will study Duke Energy’s rate request extensively.
“Our team of technical experts and attorneys will commit substantial time and resources as we scrutinize Duke Energy’s proposal on behalf of the utility’s ratepayers,” spokesman Anthony Swinger said in an email. “With Duke Energy seeking a base rate increase for the first time in more than 15 years, the OUCC looks forward to doing a complete review of the utility’s finances and its customers’ needs over the next few months.”
Duke Energy said its overall average electric rate is currently below state, regional and national averages and is the lowest overall electric rate average in Indiana.
The utility serves about 840,000 electric customers in 69 of Indiana’s 92 counties. That includes suburban areas near Indianapolis, Louisville and Cincinnati, along with the cities of Bloomington, Terre Haute and Lafayette.