Plainfield-based Duke Energy Indiana has reached an agreement with the Indiana Office of Utility Consumer Counselor and other parties regarding a proposed $1.83 billion infrastructure improvement plan. The OUCC says the agreement will reduce costs to consumers for the seven-year project by nearly $400 million.
The agreement will allow Duke to continue with the plan, with periodic rate increases to be capped at approximately $1.4 billion. If approved, the plan would result in an average rate increase of 0.75 percent each year between 2017 and 2022.
The deal includes the removal of Duke’s $192 million proposal to install advanced meters can be read remotely and will provide the utility an opportunity for quicker fixes. It also includes reductions of $175 million in transmission project costs and $30 million in distribution project costs under the terms of the proposed plan, as well as a reduction on Duke’s return on equity on plan investments from 10.5 percent to 10 percent.
"I am pleased that the OUCC has been able to negotiate a compromise with Duke Energy regarding its pending infrastructure plan,” said Indiana Utility Consumer Counselor David Stippler. "The parties were able to attain a reasonable balance between Duke Energy’s need to modernize its infrastructure and the rate impact such a proposed plan would have on its customers. This agreement enables Duke Energy to continue to provide safe, reliable service to its customers while doing so in the most cost-effective way possible."
Some of the upgrades that will be performed if the plan is approved include "self-healing" grid technology, which Duke says would lead to fewer and shorter power outages. The utility says the work will also help boost reliability and safety. It involves replacing aging components within the grid like substations, utility poles, power lines and transformers.
"This plan is about creating an energy network that makes it easier for us to prevent and respond to power outages while strengthening an electric grid that has served the state for more than a century," said Duke Energy Indiana President Melody Birmingham-Byrd. "Besides replacing aging equipment, the plan modernizes the electric grid for the type of information and services that consumers have come to expect."
The plan still requires approval from the Indiana Utility Regulatory Commission. The OUCC says the parties involved in the agreement will file testimony supporting the agreement. Duke says a decision is expected by mid-2016.