Local residents could see higher electricity bills next year after Duke Energy Tuesday submitted a request to increase rates by 19% for residential customers.
The company, which is the largest electric utility in the state, said the rate hike would generate around $395 million every year. Duke Energy said the extra revenue would help pay for generating cleaner electricity, improving the reliability of electric service and serve a growing customer base.
The company submitted the rate request to the Indiana Utility Regulatory Committee, which must vote to approve the increase after reviewing the proposal. The committee could choose to deny the request or approve a lower rate increase.
The company said the increase will vary among consumers depending on the cost to serve different types of customers. The overall average rate increase would total about 15% across all customer groups.
If approved, the increase will be added to bills in two steps – around 13% in mid-2020 and 2% in 2021, but exact timing will depend on state regulatory commission action.
If approved at the requested rate, the company’s typical residential customer using 1,000 kilowatt-hours a month could expect a monthly bill increase of about $23, which includes both steps of the increase.
Duke Energy’s proposed new rates would be used to cover a range of innovations, upgrades and improvements.
That includes accelerating the retirement dates for some of its Indiana coal-fired power units to prepare for the likelihood of future greenhouse gas regulations. Nearly 90% of the power Duke Energy produced in Indiana in 2018 was generated from coal.
The company said federal rules also require changes to the way it manages coal ash stored at power plant sites, so it’s closing ash basins at its power plants in compliance with stricter regulations.
The rate hike would also help pay for replacing and upgrading equipment to reduce power outages and modernize the electric grid, the company said. These improvements include line sensors that detect problems, reduce power outages and limit the number of customers affected when outages do occur.