State board OKs small rate hike for utility provider

For the next five years, you can expect an increase in your Duke Energy bill.

A state board approved allowing the utility that serves 36,000 customers to increase its rates by about $1 per month for the average customer. And that increase will repeat each year for five years. That means by 2022, you will be paying about $5 more per month than you do right now.

Duke Energy is beginning a project to upgrade its power grid and replace infrastructure, such as power lines and poles throughout Indiana, that are decades old. The company will replace the old lines and poles with new, technologically advanced equipment over the next seven years, Duke Energy spokeswoman Angeline Protogere said.

The new poles and lines will allow Duke Energy to pinpoint exactly what caused an outage and where it occurred, and restore power to customers much quicker, Protogere said.

For example, if a tree falls into one of the new power line or poles and causes an outage in Greenwood, the new equipment can tell Duke Energy the exact street where a line was damaged, allowing technicians to get the power back on sooner.

“Some of our infrastructure, such as poles and lines is decades old,” Protegere said. “The new technology will create a smarter, more reliable system that helps us identify the problem faster and get lights back on faster for everyone that lost power.”

In order to pay for that work, Duke Energy asked for a rate increase.

During the next five years, the company anticipates an average rate increase of .75 percent. The increase could be slightly lower, or higher, based on the work completed, Protegere said.

The average bill for a homeowner who used 1,000 kilowatt hours per month is about $114. And the company estimates the average bill will increase about $1 per month, starting in 2017, she said.

That increase will continue each year for five years.

Duke Energy will review the cost of the work that has been completed around September of each year and propose how much the rate should increase to the Indiana Utility Regulatory Commission, a state board that oversees utilities, Protegere said. The board would have to approve any increase each year, she said.

The project to replace infrastructure across the state initially was proposed to the Indiana Utility Regulatory Commission in 2015, but the plan was denied after the board wanted more information and a lower overall cost, Protogere said.

Duke Energy reduced the overall total that would be collected in a rate increase from $1.8 billion to $1.4 billion and agreed to reduce its return on equity for investments from 10.5 to 10 percent, according to a news release from the company.

Part of the cost reduction came from the utility holding off on a plan to spend $192 million on new, digital meters.

Duke Energy is currently conducting a study in Terre Haute, monitoring about 200 digital meters, and will use that information to determine whether it should invest in the digital meters and replace old ones throughout the state, Protogere said.

At a glance

A state board approved allowing Duke Energy, which serves 36,000 customers in Johnson County, to raise its rates. Here is a look at how that will impact your bill:

Average monthly bill: $114

Rate increase: .75 percent per year for the next five years

Impact on bills: About $1 per month more each year. At the end of the five-year period, customers will be paying about $5 more per month than they do now

Corey Elliot is a reporter at the Daily Journal. He can be reached at or 317-736-2719.