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Duke Energy Ohio's Rate Increase Request

Why, and why now?

Duke Energy Ohio has notified the Public Utilities Commission of Ohio (PUCO) that it intends to seek permission to increase the distribution rates customers pay for their electric and natural gas service.

The increase will be approximately 5.1 percent, on average, for electric rates and 6.6 percent, on average, for natural gas distribution rates.

Rates paid by Duke Energy Ohio customers are among the lowest in the state, and will continue to be under the new rates.

Electricity costs actually going down

In Ohio, the rates Duke Energy charges its customers for electricity have a generation component and a distribution component.

The increase to be requested is for distribution, which covers the cost of substations, wires, meters and equipment to deliver electricity to customers. These rates are set by the PUCO.

It has been four years since Duke Energy Ohio last filed for new electric distribution rates. Meanwhile, the company’s costs to build, maintain, and operate the electric infrastructure have increased.

However, generation prices have been coming down. So even if the proposed electric distribution rate increase is approved, a typical Duke Energy Ohio residential customer who uses 1,000 kilowatt hours of electricity each month will pay 5.3 percent less than in June 2011.

Natural gas prices offset increase

Duke Energy Ohio last filed for new natural gas distribution rates five years ago. Since then, the company has invested more than $500 million to upgrade the pipes and equipment used to transport natural gas to our customers.

This increase is not related to the price of the natural gas our customers use, which has been steadily decreasing. Overall, natural gas bills for Duke Energy Ohio residential customers are on average 45 percent lower today than they were in 2006 and 18 percent lower than 2011. If the natural gas distribution rate increase is approved, the typical customer who uses 70 CCF a month will pay about $75.

What’s next?

The company will file applications and testimony beginning in early July. After that, the PUCO will hold public and evidentiary hearings, and rule on the cases. New rates would likely be implemented in early 2013.