In response to higher fuel prices, the Indiana Utility Regulator Commission this week approved a 16% rate increase for Duke Energy.
At the end of April, Duke filed for a fuel adjustment clause increase. Major Indiana electric utilities are allowed to adjust rates every 3 to 6 months for changes in generating fuel costs.
Under the increase, the typical residential customer who uses 1,000 kilowatts per month will see an increase of $22.59 on their monthly bills. The new rate takes effect in July and will last through September.
Duke Energy stated the increase was needed due to higher wholesale natural gas costs, which are affecting electric utilities throughout the country. The utility company also pointed to supply chain issues, global fuel demand and a tight labor market as reasons why the rate hike is needed.
The Indiana Utility Regulator Commission ordered that Duke Energy Indiana is authorized to recover the $105,254,919 of under-collected fuel costs experienced in December 2021 through February 2022 over a six-month period, instead of the normal three-month recovery period.
The Indiana Office of Utility Consumer Counselor had sought that paid over a 12 month period. The IURC did not approve that recommendation.
The IURC will review fuel adjustments for Duke Energy again in the next quarter.
In a statement, the energy company said it “is seeing the highest sustained prices for fuel that we have witnessed in a decade. Global demand and tight fuel supplies as well as labor shortages at coal mines and railroads are affecting the cost of the power we produce as well as what we purchase in the energy markets. These are not permanent increases,” the company stated.
“Fuel costs rise and fall, and we pass those costs to our customers with no profit, so customers pay what we pay. Our priority is to purchase fuel at the best possible price, through steps such as long-term contracts and using a diversity of suppliers. To lessen the impact on customer bills, we are spreading recovery of some of these fuel costs over a longer period to reduce the rate impact. If you are financially struggling to pay your electric bill, contact us at 800.521.2232. We can discuss payment plans and resources for help.”
Duke Energy Indiana supplies electrical service to 810,000 residential, commercial and industrial customers across the state, according to its website.