Updates

JULY 2024 UPDATE: CAC filed testimony in the Duke rate case, making numerous recommendations to the IURC intended to mitigate the impact of this obscene proposal on captive ratepayers.

CAC's recommendations include that the IURC do the following:

• Reduce Duke’s authorized Return on Equity (ROE), or profit
• Reduce or eliminate punitive charges and fees such as deposits, late fees, reconnection charges, and payment transaction charges.
• Prohibit Duke from charging customers for costs related to Gulfstream jets and a private helicopter for executive travel, utility association membership dues that primarily benefit shareholders, filing and litigating this rate case, unidentified economic development projects, corporate restructuring, studying carbon capture and storage (CCS) at the Edwardsport IGCC boondoggle, certain proposals regarding coal ash, and alleged lost revenues resulting from implementation of voluntary Time-Of-Use (“TOU”) rates.
• Deny Duke’s proposal to raise the monthly fixed charge.
• Deny Duke’s request to continue using declining block rates and instead, order Duke to replace those rates with a flat per-kWh rate.
• Require that Duke establish a Residential Affordable Power Rider to provide immediate direct bill-assistance to low-income and vulnerable households.
• Impose a temporary moratorium on disconnections to allow time for Duke and interested stakeholders to establish and implement affordability and health/safety measures.
• Direct Duke to develop a new Distributed Generation (“DG”) Tariff to address existing barriers that consumers face in installing and benefiting from rooftop solar and other DG technologies.

Duke Energy is the largest electric utility in Indiana, and its parent company is one of the largest energy holding companies in the United States. The Charlotte based Fortune 150 company raked in over $2.87 billion in profit last year and has 10 million electric and gas customers in 7 states. Duke Energy Indiana raked in $497 million in profit in 2023, and more than $2.7 billion in total profit from 2017 to 2023. Clearly, this large monopoly utility is not hurting for profit.

In contrast, significant increases in the cost of housing, food, and healthcare force Hoosier households to make tough decisions daily. It is immoral and unjust that Duke is requesting such a dramatic increase as so many of their customers struggle to make ends meet.

In this case, Cause Number 46038, Duke wants:

• To collect $500 MILLION more from their customers every year. Duke is requesting a 16.2% increase in its annual revenue requirement. If approved, Duke will collect $3.5 billion annually from their Indiana customers - residential (households), commercial (big retailers), and industrial (large manufacturers).

• The highest profit margin out of all electric utilities in Indiana. Duke wants to increase their profit (return on equity, ROE) from 9.7% to 10.5%. Right now, 4 of Indiana’s big utilities have ROEs under 10%, and only one has a profit margin above 10% (CenterPoint at 10.4%).

• To increase your fixed monthly charge from $10.54 to $13.70, a 29.9% increase. The fixed charge is the fee you pay every single month regardless of how much energy you use.

• To continue using declining block rates, a regressive rate structure that forces those who use the least energy to pay the highest rates per kilowatt hour.

High fixed charges and declining block rates disproportionately impact low- and fixed-income households (seniors, people with disabilities, households with children, and other vulnerable populations). They also penalize households that conserve energy and make their homes more efficient.

(Click on the image above to view the spreadsheet.)

Dirty Duke doubles down on coal to the detriment of our wallets and our environment. 

Duke is already Indiana’s biggest slacker when it comes to the energy transition, with almost 90% of their electricity coming from fossil fuels. Coal is a key driver of Duke’s rate hike, with the monopoly protecting their profits at the expense of consumers and our environment.

This is especially true when it comes to coal ash - a toxic byproduct of using coal for electricity. For decades, Duke has been improperly disposing of coal ash by dumping it in unlined pits at their power plants. This toxic sludge, which contains neurotoxins like arsenic and lead, is already leaching into our groundwater and much of it sits next to critical waterways like the White, Wabash, and Ohio rivers.

With this rate case, Duke wants to shove decades of coal ash clean up costs onto their customers. Duke is asking for a whopping $223.5 MILLION for coal ash clean up costs, including $92 million in costs that the Court of Appeals previously told Duke they couldn’t collect from customers. Duke didn’t like that, so they successfully lobbied at the Statehouse for SEA 9 (2023) to enable them to charge customers for it. Truly unparalleled greed. 

Making matters worse, this $223.5 million doesn’t even cover ALL of Duke’s coal ash clean up costs. Duke had a separate coal ash case approved by state utility regulators in May 2024 to the tune of $327 MILLION, and has had millions of other coal ash closure costs approved by the IURC prior to that.

The Bottom Line:

The quicker Duke reduces its coal consumption, the quicker we can lower costs - and risks to our health and our environment - associated with coal ash. The more coal Duke burns, the higher our bills. That’s why it’s deeply concerning to see Duke double down on coal in a number of ways with this rate case, including: 

• Burning dramatically more coal in 2024 and 2025 than they have in the last few years.

• Delaying the retirement of four of their coal plant units, including Gibson Unit 5, a Super Polluter, and Cayuga Unit 2, which has a history of groundwater contamination.

• Charging customers more so Duke can profit from their overstock of coal. In 2021 and 2022, Duke entered into some bad long-term coal supply contracts for far more coal than they needed, and now has a huge overstock of coal at their power plants. In this rate case, Duke is requesting for customers to bail them out for their bad coal supply strategy and reward them for having far more coal inventory than is necessary for them to operate their coal plants reliably.

Adding insult to injury, Duke also wants $9 MILLION to study carbon capture and sequestration at the already expensive, inefficient, and scandal ridden Edwardsport power plant. Over a decade ago, Duke studied a slightly different version of CCS at Edwardsport. At that point, CCS would have increased the plant’s construction cost by 37% and decreased its energy output by 20%.