Duke Energy is petitioning state regulators to allow for a 6 percent rate increase to pay for updates to its electric grid.
The electric company’s proposal to the state’s utility regulatory commission says the gradual six-year increase will pay for improvements to the power system, such as installation of so-called “self-healing” systems that quickly re-route power and isolate outages and digital meters.
"We deliver power today much like we did a century ago," says spokeswoman Angeline Protegere. "And the electric grid is an engineering marvel that has served us well, but our grid is aging and it needs modernization."
The $1.83 billion plan takes the form of a surcharge called a tracker, in which utilities companies can propose rate increases between more formal rate cases, which usually only happen every decade or so. Protegere says the grid situation is exactly what trackers were designed for -- " Rate cases are not forms for introducing a new program like this," she says.
But opponents of the plan say trackers were established to address costs out of a company’s control, such as fuel prices.
Kerwin Olson, Executive Director of the Citizens Action Coalition, an electric consumer advocacy group, says it would like to see the grid modernization addressed during the more transparent process of an actual rate case, not a tracker, in which a company’s entire books are scrutinized.
"Trackers are one-way rate making in which the only thing that's looked at are the costs of the project," he says. "The savings that company might be realizing as a result of these investments are not passed on to rate payers."
Last spring the IURC denied Duke’s original grid modernization proposal, calling for a more detailed focus on its electric grid projects.
