Citing volatility in the fuel markets, Duke Energy is again seeking a fuel adjustment, requesting a 7.2% rate increase from the Indiana Utility Regulatory Commission.

In a July 28 filing, Duke Energy stated that represents “an increase of $11.71 over what such customer is paying today” and is an increase of $40.22 or 29.8% over what a customer paid for the same period last year.

The 7.2% increase is based on a typical residential customer using 1,000 kilowatts of power.

Major Indiana electric utilities are allowed to adjust rates every 3 to 6 months for changes in generating fuel costs. The new rate, if approved, would take effect in October and remain through March 2023. Duke Energy is seeking the increase over six months to reduce the monthly cost impact.

In its filing, Duke stated that as “a result of the continued volatility in the fuel markets the company has been subjected to a significant and prolonged rise in coal, natural gas, and [wholesale power] prices between the times our projections were made and when the fuel rider rates went into effect.”

The company is also expected to make another filing for a fuel adjustment later this year that could increase rates for the January to March 2023 period, according to Citizens Action Coalition, an Indiana consumer and environmental advocacy organization.

“Duke Energy makes this fuel adjustment cost filing on a quarterly basis, so four times a year … and we do expect Duke Energy to make quarterly filings going forward and those adjustments that happen in the next filing can pancake onto the rates that are approved in this case,” said Ben Inskeep, program director at the Coalition.

In June, the IURC approved a 16% rate increase — a $22.59 per month increase — that applies for the six-month period of July through December 2022. The additional rate increase request, if approved, would bring the total increase to $34.30 for the typical residential customer for the two fuel adjustments.

Inskeep said Duke Energy relies on coal and natural gas for a majority of its electrical power generation, adding there is room for more solar and wind power generation.

“One of the nice things about solar or wind is you will not have fuel costs down the road that can suddenly spike,” Inskeep said, “so there is a high degree of certainty of what the cost and repairs are under those types of fuel sources.”

Additionally, Inskeep said wind and solar energy complement each other.

“The good news is that [energy] planners are aware of the availability of solar and wind ... there is higher wind generation at night and higher solar generation during the day, so those two resources do complement each other,” Inskeep said.

A mix of power resources is best, Inskeep said, adding Duke Energy is part of the Mid-Continent Area Power Pool and can share or receive power from other utilities in other states to fill in power gaps.
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