Southern Indiana officials respond to proposed Duke Energy rate increase
ANDREW HARP andrew.harp@newsandtribune.com Sep 20, 2024
SOUTHERN INDIANA — A few different local leaders in Southern Indiana have recently weighed in about the potential rate increase proposed by utility company Duke Energy.
On July 11, Josh Staten, senior director of business development and real estate at River Ridge Development Authority, provided a testimony before the Indiana Utility Regulatory Commission.
The commission is currently determining whether or not to approve a 16.2% base rate increase requested by Duke Energy to generate $491.5 million in annual income. Staten said the commission ought to deny the rate increase.
“Since our last base rate increase in 2020, we’ve invested $1.6 billion in our electric grid, power plants and overall system on behalf of our customers, including advanced technology that has helped prevent more than 185,000 power outages,” said Duke Energy Indiana President Stan Pinegar said in a statement in April.
Staten was asked several questions about how this rate increase may affect current and future businesses that are or want to bring their operations to the River Ridge Commerce Center.
Staten said electric rates is important in terms of whether or not a company wants to operate a business in a given area.
“Electric rates and the ability of a utility to meet the required electric capacity are often the difference between gaining or losing a project,” the testimony states.
He said a study was conducted and shown to the center where it discussed the center’s advantages and disadvantages. One of the primary disadvantages was the non-competitive electric rates, causing annual operating costs for business to go “well into the tens of thousands or even millions of dollars.”
Staten also said that he was worried not only about attracting new businesses but retaining the ones they already have.
He said a company operating with a high load factor receiving primary distribution service could see a 12.9% increase on their electric bill, which could also cause companies to cut back on their investment.
“Throughout the United States rising operating costs have hit business, and especially small businesses, extremely hard. They have had to delay potential expansions, the hiring of new employees, and expansion into new markets in order to operate in today’s economic climate,” he said.
Staten also discussed Duke Energy’s supposed “inability” to provide adequate energy service to River Ridge as the load increases.
River Ridge and Duke Energy sent emails between each other in July to discuss the state of the electric capacity in the area considering current and future developments. This portion of the testimony has several names and bits of information censored.
“We have genuine concerns that adequate service capacity at the RRCC may not be available until 2030 or beyond,” the testimony states.
A question was asked about Duke Energy’s capacity to serve a confidential project, and they initially said that it wouldn’t be until 2028/2029 that they’d be able to serve the additional load, and so it wouldn’t line up with the project’s required timeline.
“It is fundamentally unfair for customers to pay even higher rates when Duke Energy is unable to provide adequate service to meet the load within its territory,” it states.
It states that it would be possible that River Ridge would not be able to attract any new electric load for longer than five years considering the timeline of some unidentified upgrade.
“River Ridge may well be required to sit on the sidelines and indefinitely pause efforts to attract investment from new or expanding companies,” Staten said.
Staten also requests the commission to expedite and prioritize transmission and distribution projects that are needed for new loads, or allow competitors to build these facilities if they can complete construction more quickly.
Another request made by Staten is to require Duke Energy to a standard tariff offering for companies that’s similar to the contract they have with the company Blocke, that is building an $800 million data center, in order to incentivize companies coming to the center.
“In this era of economic development, it is arguably the utilities, and not state or local officials, which hold the most control over where a project locates,” Staten said.
States said companies do this through their rate structure, incentive packages and where they prioritize needed infrastructure improvements.
Duke Energy spokesperson Angeline Protogere responded to the comments by River Ridge officials.
“We have a history of working with River Ridge to bring major jobs and investment to the area, including recent examples such as Meta and Canadian Solar’s manufacturing facility. Our competitive electric rates have succeeded in attracting continued investment and economic growth to this region.
We have a proven statewide track record in economic development and will continue to build on that success by working closely with our communities.”
Congresswoman Erin Houchin also sent a letter to the commission expressing her concerns.
“At a time of crushing inflation, increasing expenses for families and businesses hamper the ability of our communities to grow and thrive,” she said.
Houchin said that increases up to 19% for residential customers and 20% for commercial customers is “staggering.”
“There are other avenues for addressing necessary grid updates and modernization that do not involve such large rate increases,” Houchin said. She pointed out federal and state funding opportunities that could help in this manner.
