Duke Energy Indiana seeks approval for $1.83 billion in power grid upgrades

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Duke Energy said its unit Duke Energy Indiana has filed a seven-year, $1.83 billion plan that uses a combination of advanced power grid technology and infrastructure upgrades to improve service to customers and provide them with better information about their energy use.

The company noted that the Indiana Utility Regulatory Commission in May denied Duke Energy Indiana’s original plan, which was proposed in August 2014, asking for more details and a more specific focus on electric grid projects.

If the commission approves the plan, customers will see a gradual rate increase averaging about 1 percent per year between 2017 and 2022. Duke Energy added that it estimates the modernization work will generate or support more than 5,000 Indiana jobs over the seven-year period. There is also an estimated state and local community tax benefit of about $180 million over the seven-year plan.

The utility added the commission would set a schedule for hearings on the proposed plan, with a decision anticipated by mid-2016.

Duke Energy Indiana filed the plan under the provisions of Indiana Senate Enrolled Act 560, which was passed in 2013, and is aimed at improving utility infrastructure. Under the law, utilities can file a seven-year infrastructure improvement plan with state utility regulators, the company said.

If approved, a utility can request recovery of 80 percent of its investment through a customer bill tracker. Recovery of the remaining 20 percent would be deferred for review until the utility's next base rate case, the company added, noting that under the new law, utilities must file a base rate case before the end of their seven-year plans.

In the verified petition filed with the commission, the company asked the commission to approve its ratemaking proposals, including the transmission and distribution infrastructure improvement cost rate adjustment, standard contract Rider No. 65 (T&D Rider), for recovery of 80 percent of the T&D plan costs, and deferral with carrying costs of 20 percent of the T&D plan costs for subsequent recovery in the company’s next general retail electric base rate case, and approval of regulatory assets for the deferred amounts and for certain metering investments, among other requests.

The company also requested that the commission approve its process for updating the T&D Plan in future annual proceedings. Additionally, the company requested approval of two voluntary tariffs enabled by the T&D Plan investments in automated metering infrastructure (AMI).

Furthermore, the company requested approval of a depreciation rate specific to the advanced meters that will be deployed as part of the AMI project.

The company said that the estimated annual rate impacts for the proposed T&D Rider are:

·      0.58 percent in 2017

·      1.10 percent in 2018

·      1.35 percent in 2019

·      1.20 percent in 2020

·      0.86 percent in 2021

·      0.69 percent in 2022

·      0.75 percent in 2023

Transmission system improvements include 149 projects on 80 lines consisting of, for instance: rebuilding lines; replacing wood poles or structures; replacing conductor; replacing static wire; replacing or eliminating cross-arms; replacing aluminum H-frame structures; mitigating galloping conductors; and replacing transmission line switches.

Those improvements also include 323 transmission substation upgrade projects at 280 substations, of which 234 projects at 209 substations include work on transmission assets, consisting of, for instance: replacing circuit breakers and circuit switchers; replacing protective relays; replacing transformers; and upgrading transformer load tap changers.

Distribution system improvements include advanced metering infrastructure such as meters, communication and back office systems. Those improvements also include distribution circuit upgrade projects on 1,341 circuits, as well as 323 distribution substation upgrade projects at 280 substations, of which 260 projects at 245 substations include work on distribution assets, consisting of, for instance, replacing circuit breakers and reclosers.

In its statement, Duke Energy said that the plan’s benefits include improved reliability and safety; fewer and shorter power outages; fewer estimated customer bills; quicker service; and energy savings.

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