NEW ALBANY — If a proposal is approved by the state, Duke Energy's Indiana customers would see a significant rate increases over the next couple years.
The Indiana Utility Regulatory Commission (IURC) presented a public field hearing Tuesday at the New Albany-Floyd County School Corporation's administrative building to gather public input on Duke Energy's pending request to increase rates starting next year. The energy company requested an overall rate increase of 17 percent for all customer groups to cover increases in operating and maintenance costs, as well as capital improvements.
At the meeting, a number of people voiced their thoughts and concerns about the proposed rate increase, including Southern Indiana residents and others from around the state. No decision was made at Tuesday's meeting, but the IURC commissioners will consider the public input as it reviews Duke Energy's request, and the agency will continue gathering consumer comments until Oct. 23. The IURC will make a decision in 2020.
The Duke Energy request would raise the rates in two phases. Increases of 15 percent would go into effect after the IURC’s order is issued in 2020, and another 2 percent increase would go into effect in April 2021.
The rate increase would raise a typical 1,000 kilowatt-hours (kWh) monthly residential electrical bill from $120.30 to $142.59 when fully implemented. The rate increase would raise Duke Energy’s annual operating revenues by $393 million, or an increase of about 15.4 percent.
According to Duke Energy spokeswoman Angeline Protogere, the company's proposal to raise rates will help the company cover infrastructure investments to address a growing customer base, help the company transition to cleaner power and replace, upgrade equipment to reduce power outages and install smart meters for customers.
The largest part of the increase will go toward new miles of new power lines and substations, she said. The rate increase would help support parts of its 2018-2037 Integrated Resource Plan to transition to cleaner energy. Although about 90 percent of the power Duke Energy produced in 2018 came from coal, it is preparing for the "likelihood of future climate regulations," and it is speeding up retirement dates of a number of Indiana coal-powered units.
Many expressed opposition to Duke Energy's request for several reasons, including worries about the potential financial effects on residents. A number of people also voiced their concerns that the company's proposals for transitioning to cleaner power would not be effective enough in reducing carbon emissions and addressing the issue of climate change.
Ronna Papesh, who has been a customer of Duke Energy since 1998, urged the IURC to deny Duke Energy's request. She uses solar energy, and she claimed she has recently faced charges from Duke Energy for electricity she did not use. She also expressed worries about how the increase would affect Indiana residents such as her mother, who is on a fixed income and cares for two sons with disabilities.
"She's not a wasteful person and has implemented as many energy conservation measures as she can afford, and still, my mother's electric bill is a full 10 percent of her yearly income, and that does not include the cost for heating — she uses natural gas," she said. "According to the U.S. Energy Information Administration, the average consumer energy expenditures today are 5.5 percent of income — my mother's electricity costs alone are almost double the national average for all energy consumption. She truly cannot afford even one penny more for electricity."
Stan Pinegar, president of Duke Energy's energy operations, said "it's not lost on us" that the rate increase will affect low income customers.
"We do a lot in that space, actually," he said. "You didn't hear a lot about that tonight, but we have billing opportunities, we have budget billing where we can put our customers on a budget program to help spread out the payments of the bills over the course of a year so you don't have spikes in the summer and winter. It has proved to be an effective tool for our customers. We have programs in the winter in particular where we are assisting our customers through donations that either our customers have made or we have made corporately to folks like you heard tonight."
Batesville resident Michael Cambron expressed disapproval of the proposed rate increase. He said he doesn't see Duke Energy's approach to transitioning to clean power as sufficient to address climate change, and he would like to see greater transparency from the company.
"I noticed that Duke Energy did consider scenarios that relied more on renewable energies, particularly wind, solar and battery storage," he said. "They claim these technologies are more expensive, but I can't find in their somewhat redacted report really how much more expensive they are than they recommended, and I think as citizens in Indiana and as customers of Duke Energy, we have a right to understand those cost differences to weigh in our own minds, do we think if makes more sense to pay maybe a few more cents more to move more aggressively to the rapid decarbonization plan."
Pinegar said he views the potential rate change as the beginning of its transition to cleaner energy, but "it's not going to happen overnight."
"Over time, we feel like it's a reasonable transition and the most cost-effective approach for our customers," he said. "We can't switch to renewables overnight — we can't do it. We understand over time that we can diversify our portfolio adding renewables as well as natural gas, and that's our goal."
Doug Drake, a New Albany resident and the president and CEO of Personal Counseling Services, discussed his approval of Duke Energy's plan. He said while he doesn't want to pay more money, he wants "the service we deserve to get," including infrastructure improvements.
"Customer service is extremely important to me, and they have the best customer service I've ever seen," he said. "They respond when electric's out very quickly, they give us updates and texts. I've never worked with an organization or company that's as customer friendly as Duke Energy, and as a resident paying taxes, I would be proud to pay, because I know that our infrastructure needs to be improved, and if it isn't improved, we might wake up one morning and not have electricity."