DEI 2019 Rate Case

Generating cleaner electricity, improving the reliability of our electric service, and investments to serve a growing customer base are some of the key factors behind an electric rate increase request Duke Energy recently filed with the Indiana Utility Regulatory Commission on July 2, 2019.

The request is for an overall average rate increase of approximately 15.6% averaged across all customer groups. If approved, the new rates will be phased in over two years, with a proposed 13.6% increase in 2020 and a 2% increase in 2021. Timing will depend on state regulatory commission approval.

The increase will vary among consumers depending on the cost to serve different types of customers. If approved by the commission, the company's average residential customer using 1,000 kilowatt-hours a month can expect a monthly bill increase of approximately $22, or approximately 75 cents per day, which includes both phases of the increase.

To help customers save on their electric bill, we are proposing a pilot program with time-of-use rates where customers can shift their power use on days of high electric demand to times of day when energy is less expensive.

We understand that utility rate increases are never popular; however, we have worked hard since our overall rates were last evaluated to keep our rates reasonable. Today Duke Energy's overall average Indiana electric rate is currently below state, regional and national averages and is the lowest overall average electric rate in the state.

State utility regulators will review our request in public hearings, including field hearings where the public can comment.

If approved, the IURC will ultimately determine what's appropriate for customer rates based on a long-standing and very transparent public process for reviewing rate requests.

How a rate case works

Working today for a smarter tomorrow

The company is making strategic, data-driven investments to improve reliability and harden the grid against severe weather, protect against cyber and physical threats, use more renewable energy and provide customers the information they need to make better energy choices and save money. These investments will reap benefits now and in the years to come.

The proposed new rates will be used to cover a range of upgrades, improvements and innovations that customers value, including:

Accommodating growth

• The largest part of the increase covers core utility investments such as adding miles of new power lines and substations to serve the more the 100,000 customers we have added to our customer base since just prior to our last full-scale rate review.

Transitioning to cleaner energy

• Nearly 90% of the power Duke Energy produced in Indiana in 2018 was generated from coal. While it is a relatively low-cost energy source, we need to continue to prepare for the likelihood of future greenhouse gas regulations, and we have proposed accelerating the retirement dates for some of our Indiana coal-fired power units. It's a moderate plan that staggers generating unit retirements over time and spreads out the customer cost impact.
• Coal ash from electricity production has been stored at power plant sites for decades. Federal rules are changing the way the company manages coal ash, and we are closing coal ash basins at our power plants responsibly and in compliance with stricter regulations.

Improving reliability and reducing power outages

• We are a society that is dependent on the 24/7 flow of electricity to our homes, businesses and schools. We are replacing and upgrading equipment to reduce power outages and modernize the electric grid for the type of information and services that consumers have come to expect, such as better communication during power outages. Additional improvements include line sensors that detect problems and limit the number of customers affected by outages when they do occur. Since our Indiana electric grid improvement initiative began in 2016, it has helped prevent more than 73,000 customer power service interruptions, saving more than 9 million customer outage minutes.
• Trees and vegetation are a primary cause of power outages, and the cost to trim trees per mile on our system has more than tripled, mostly in the last two years due to higher contractor costs. Our rate plan includes increases to reflect this reality.
• We've been strengthening our system against storms by replacing wooden poles that support some of our major power lines with more resilient steel and concrete structures.

Providing customers with more convenience

The company is deploying a new customer information system to give customers more information and options, and improve the overall customer experience; installing smart meters to give customers intelligent information to help them make smart choices to save energy and money before their bill is due, as well as improve the company's outage response when an outage occurs. We're also proposing to eliminate individual credit and debit card fees for residential customers when paying bills.

There is strong interest in electric vehicles, but infrastructure is needed to meet growing market needs. An electric vehicle transportation program, including fast-charging stations, an electric school bus program and a residential electric vehicle rebate program are part of the request before state utility regulators.