Westfield challenges Duke Energy proposal that would raise electricity rates for consumers

By 2026, some Hamilton County residents could be paying $42 more per month for electricity, according to the City of Westfield.

That’s if state regulators allow a proposed rate increase from Duke Energy Indiana. The rate hike would bring in an additional $492 million in annual revenue, according to the company .

Westfield is the only municipality to file an appeal asking state regulators to deny Duke Energy’s request to raise its rates, but several environmental advocacy groups and private corporations are also challenging the proposed rate increase.

Duke Energy Indiana is the state’s largest electric supplier.

Indiana ratepayers are represented by the state’s Office of Utility Consumer Counselor in this rate increase case and all other decisions that impact utility rates and services.

The Indiana Utility Regulatory Commission will hear additional evidence from Duke Energy and the groups challenging the rate increase. It's expected to make a decision in this case early next year.

The additional revenue from the rate increase would help pay for a modernized electric grid that is more resistant to power outages, hundreds of miles of new power lines, environmental responsibilities and increased grid security, according to Duke Energy Indiana .

“I do recognize that we are growing very rapidly and that requires investments in infrastructure ... that doesn't hold water in my eyes for the increase they are asking for,” Westfield Mayor Scott Willis said.

How much more would Duke Energy customers pay under the proposed rate increase?

Duke Energy’s request is for an overall average bill increase of about 16%. If approved the rate hike would be added to bills in two steps, approximately 12% in 2025 and about 4% in 2026.

According to Duke Energy, the monthly impact by 2026 for a residential customer using 1,000 kilowatt-hours a month would be about a 19% or $28 increase per month. The City of Westfield has said that an average Westfield family would be hit harder and pay $42 more per month for electricity by 2026.

Why is Westfield pushing back against the proposed rate increase?

Willis points out that state regulators allowed Duke Energy to move forward with a rate increase just four years ago in 2020, which increased the company’s annual operating revenues by $146 million.

Higher electricity bills would hit Westfield residents hard as the mayor expects trash service fees to increase next year and inflation is impacting the entire country , Willis said.

“Residents are seeing property taxes skyrocketing, assessed values of homes are skyrocketing and groceries are getting more and more expensive,” he said. “We have a lot of retirees that live on a fixed income, and we need to be looking out for all of our residents.”

The rate increase would also impact commercial customers, such as schools, businesses, houses of worship and local government operations and raise the cost of living across the board in the city, the mayor said.

Willis said the energy company would use profits from the increased rates to cover expenses that he believes should not be covered by ratepayers, including the cost of lobbying and the cost to litigate the rate increase case.

Westfield also has concerns that the rate increase could prolong the energy company’s reliance on coal as the proposal does not include any new investments in clean energy.

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“Duke’s prolonged reliance on coal is keeping energy bills higher than they would be if they transitioned to renewables,” information from the city reads . “Wind and solar have lower capital and operational costs compared to fossil fuels and are not subject to fuel price volatility associated with coal, oil and gas.”

Finally, Willis points out Duke Energy’s parent company, North Carolina-based Duke Energy Corp. , reported a 17% increase in profit last year.

“I'm not afraid to charge the hill and fight,” Willis said. “When I see something I don't think is right, I'm not afraid to stick my nose out there and fight for it.”

Duke Energy Indiana has invested $1.6 billion in its electric grid, power plants and overall system since the last rate increase in 2020, according to information the company sent in response to questions from IndyStar.

"Hamilton County — in particular Westfield — is the fastest-growing area of our 69-county area," said Angeline Protogere, a spokesperson for Duke Energy Indiana via email. "In recent years, we have invested approximately $25 million annually in Hamilton County alone to keep pace with the county’s substantial growth. This includes grid investments to serve new residential and business customers, including power lines and subdivision infrastructure. In addition to accommodating growth in the county, we’ve also been making investments in the reliability of the grid to reduce power outages. Those improvements are part of this rate request."

Investments in advanced tech by Duke Energy have helped avoid more than 3,200 customer outages in Hamilton County since 2020, saving more than 9,000 hours of total outage time, according to the company.

Environmental groups, corporations also challenging Duke Energy’s proposed rate increase

Besides the City of Westfield, there are 12 other entities who have filed with the Indiana Utility Regulatory Commission to push back against the energy company’s proposed rate increase.

This includes the Office of Utility Consumer Counselor, private corporations, including Kroger and Walmart, and environmental advocacy groups, including the Sierra Club and Citizens Action Coalition Of Indiana.

A key concern, according to the action coalition, is that most of Duke Energy's electricity comes from fossil fuels and the group believes the increase in profits would further the company’s reliance on burning coal.

“They’re asking to establish and create base rates that customers pay that are based on current and projected future costs,” said Kerwin Olson, executive director of the coalition. “Those current and projected future costs include operating and maintaining coal plants, the cost of fuel, the inventory of that coal, the cleanup of that coal — all that stuff.”

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Burning coal is both environmentally destructive and economically harmful in that green alternatives can be less expensive, Olson said. The coalition also points out that profits from the rate increase would be used for the cleanup of coal ash .

“Burning more coal means more coal ash, and there’s hundreds of millions if not billions of dollars left of work to do in terms of cleaning up that coal ash,” Olson said. “So, the more coal, the more coal ash you have and more costs to customers.”

In response to a question about how the potential rate increase could impact the company's use of coal, Duke Energy Indiana noted its generation resource planning , which is a proposed roadmap for transitioning to cleaner energy without compromising reliability of service, energy affordability or power demands.

"We’re evaluating options, weighing factors such as new environmental rules, an increased demand for power, cost to customers, and the need for 24/7 power balanced with renewable energy, which is weather-dependent," Protogere said via email. "Our ultimate obligation is to provide power that is reliable and affordable while we diversify our generating resources."

What are the next steps in the rate case?

The Office of Utility Consumer Counselor will have a final hearing where consumers can make public comments on the proposed rate increase on Aug. 8 in New Albany .

Duke Energy Indiana and the entities challenging the rate increase have already submitted evidence to state regulators. Both sides have the option to file additional information before Aug. 8 then a hearing is scheduled for Aug. 29 in front of the Indiana Utility Regulatory Commission .

The commission will then analyze all the evidence in the case and issue an order on the proposed rate increase sometime in early 2025.

Contact Jake Allen at jake.allen@indystar.com. Follow him on Twitter @Jake_Allen19.

Karl Schneider is an IndyStar environment reporter. You can reach him at karl.schneider@indystar.com. Follow him on Twitter @karlstartswithk

This article originally appeared on Indianapolis Star: Westfield challenges Duke Energy proposal that would raise electricity rates for consumers