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Duke Energy Indiana received approval Wednesday from state regulators to increase its base electricity rates, but at a lower amount than the utility initially proposed.
The Indiana Utility Regulatory Commission, or IURC, gave approval for an increase of $395.7 million a year for rates and charges, down from the $491.5 million hike requested by Duke—a decrease of 19.5%.
Plainfield-based Duke said the new rates are expected to take effect in late February.
The state’s largest electric utility filed a request with state regulators in April for permission to raise rates by about 16% over two years.
Under the original request, Duke sought to add the rate increase in two steps: approximately 12% in 2025 and about 4% in 2026.
The increase will vary among consumers depending on the cost to serve different types of customers, such as residential and business. The original request estimated that the total monthly impact of the two steps for a residential customer using 1,000 kilowatt-hours a month would be about 19%, or $27.63, but that amount will be lower under the approved increase.
“The decision follows an extensive review process that included public input from a variety of customers and stakeholders,” Duke spokesperson Angeline Protogere said Wednesday in written remarks. “The rate request centered [on] investments in a modernized electric grid more resistant to power outages, increasing reliability at our power plants, constructing hundreds of miles of new power lines, complying with evolving environmental responsibilities, increasing electric grid security and providing new systems for customer convenience.”
The move comes more than four years after Duke had its last base rate increase, which was $146 million a year, or about 60% less than it originally sought.
In July, the Indiana Office of Utility Consumer Counselor, which acts on behalf of utility customers, recommended the Plainfield-based utility should get a rate increase of only $184.7 million.
“We just received the Commission’s 137-page order late this morning,” Olivia Rivera, director of external affairs for the Indiana Office of Utility Consumer Counselor, said in an email Wednesday. “Our attorneys and technical staff will need time to review the order before we comment.”
Duke Energy Indiana serves about 900,000 customers in 69 of 92 Indiana counties, including every county surrounding Marion County.
Last year, the city of Westfield joined the case opposing the rate hike, joining several other intervenors, including Citizens Action Coalition, Nucor Steel, River Heritage Property Owners’ Association Inc., Rolls-Royce Corp., Sierra Club (Hoosier Chapter), Steel Dynamics Inc., The Kroger Co., Wabash Valley Power Association Inc. and Walmart Inc.
“While we were pleased with the IURC not giving Duke the profit margin, or [return on equity], they were asking for, the IURC still awarded Duke an increase in their ROE from its current level of 9.7% to 9.75%,” Kerwin Olson, executive director of Citizens Action Coalition, said in an email Wednesday evening. “We fail to understand how increasing the ROE of an extremely financially healthy monopoly is consistent with Indiana’s mandate on affordability.”
In a news release Wednesday, Westfield said that the IURC largely sided with Duke on many issues but also noted reductions to some of the utility’s requests, such as lowering employee bonuses from $29.6 million to $15 million.
“We remain committed to ensuring affordable utility rates for all residents of Westfield,” Westfield Mayor Scott Willis said in written remarks. “While this ruling may not have addressed every concern we raised, the IURC’s decision to lower Duke’s profit margin is a positive step forward. We will continue to fight for fair utility rates and policies that protect consumers.”
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