Duke Energy Indiana has reached a settlement with some of the state’s key consumer groups on the company’s plan to modernize its aging electric grid that delivers power to more than 800,000 Hoosier homes, businesses and industries.
The company reached agreement with the Indiana Office of Utility Consumer Counselor, the Duke Energy Indiana Industrial Group, Companhia Siderurgica Nacional, Steel Dynamics, Wabash Valley Power Association, Indiana Municipal Power Agency, Hoosier Energy Rural Electric Cooperative and the Environmental Defense Fund on a seven-year plan using a combination of advanced technology and infrastructure upgrades to improve service to customers.
“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.”
In May, the Indiana Utility Regulatory Commission denied Duke Energy Indiana’s original plan proposed in August 2014, asking for more details and more focus on electric grid projects. In December, the company filed a revised plan addressing the commission’s issues.
As part of the settlement, Duke Energy will reduce the level of capital investments recovered through the plan’s customer bill tracker from approximately $1.8 billion to approximately $1.4 billion. Part of the reduction comes from $192 million earmarked for new advanced digital meters, but the company retains the ability to pursue the meters and defer their costs for consideration in a future rate case rather than through a monthly bill tracker as other items in the plan.
The company also agreed to reduce its return on equity on plan investments from 10.5 to 10 percent for investments that flow through the plan’s bill tracker. This does not impact the company’s 10.5 percent allowed return on equity on its other remaining investments.