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Duke Energy requests additional 7.2% rate hike, citing rising fuel prices

Request would add onto already-approved 16% increase
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Posted at 6:33 PM, Aug 01, 2022
and last updated 2022-08-02 07:43:03-04

INDIANA — Duke Energy has applied for approval from the Indiana Utility Regulatory Commission to raise what it charges customers by an additional 7.2%, citing rising costs for fuel.

The increased rate translates to about $11.71. If approved, it would add to the already higher-than-normal prices Duke charges its customers since the IURC approved Duke's request to raise prices by 16%, or about $22.59, in June.

The 7.2% increase would be in effect from October through December, according to Duke Energy spokeswoman Angeline Protogere.

The request was filed July 8, IURC records show.

Utility companies in Indiana are able to negotiate rate changes with the IURC four times a year.

"A large part of a customer’s electric bill is related to fuel,” said Protogere. “It can be as much as 30% of a bill. So, when you have volatile markets, it can have a big impact on a customer’s bill."

Protogere also said it's normal for costs to fluctuate as fuel costs do.

On Monday, Duke Energy released the following statement after the rate increase was requested:

Duke Energy is seeing the highest sustained prices for fuel to produce that electricity 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 rate increases. 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 have proposed spreading recovery of some of these fuel costs over a longer period to reduce the rate impact. If you are struggling financially to pay your electric bill, contact us at 800.521.2232. We can discuss payment plans and resources for help.

A letter from Stan Pinegar, the president of Duke Energy's Indiana operations, wrote in a letter that costs for coal and gas have increased significantly since mid-2021, marking the highest sustained prices for fuel in a decade.

It's being driven in part by global demand, tight fuel supplies and labor shortages at coal mines and railroads, according to the letter.

"Fuel accounts for a significant portion of our electric costs, averaging as much as 30% of a total bill. That’s why when there are volatile energy markets, it can have a big impact," the letter states.

"These are not permanent rate increases. Fuel costs rise and fall, and we pass those costs to our customers with no markup, 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," it continues.

Protogere said Duke is adding $100,000 to its Share the Light Assistance Funds. These funds are distributed to eligible customers through community action agencies statewide. Eligible customers can receive up to $300 in energy bill assistance.

Additionally, customers have the option to pay their bills over an extended period if they're struggling to keep up.

Customers may also enroll in billing alerts, which notify them if their bill will be higher than normal before they receive it.

More information on managing bills is available here, and more on what's driving the increase can be found here.