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Duke Energy Ohio Requests 24% Rate Increase for Electric Distribution

Duke Energy Ohio has made a formal request to the Public Utilities Commission of Ohio (PUCO) for electricity and natural gas distribution rate increases. If approved, the rate hike will increase the average electricity customer’s bill by roughly $6.50, while the average natural gas customer will see an increase of about $10.25% per month. Customers that receive both electricity and natural gas services will naturally see the greatest increase on their monthly bills.

The increases amount to an $86 million increase per year on the electric side and $44 million on the natural gas side. This totals to a 44% increase and an 18% increase, respectively. Duke Energy Ohio is claiming that the increases are necessary for system improvements, increased operations and maintenance expenses, and other costs.

This significant increase has brought up several issues that question the legitimacy of the distribution rate hikes. First and foremost is the general concern that Duke’s shareholders will disproportionately gain from the rate hike that customers pay. Another concern revolves around a $65 million, 3-year project to clean up two outdated manufactured gas plants. Prior to the ability to drill for natural gas, man-made or manufactured gas was used to light and heat homes. These two plants were used for that purpose, and the sites are contaminated from the dirty manufacturing process.

The most controversial aspect is the request for a new tariff, a “Facilities Relocation – Mass Transportation Rider (Rider FRT)”, which will recover costs associated with relocations due to mass transportation projects. A portion of the requested Rider FTR is associated with a proposed streetcar project in Cincinnati. The City and Duke Energy Ohio are currently in a legal battle to determine which entity should be responsible for the cost to relocated underground utilities for trolleys. What is most concerning is that if Duke Energy Ohio is found responsible for the cost, it could translate to government entities holding utilities responsible for future utility-associated transportation projects that government entities create.

According to the latest developments, PUCO is not satisfied with the open-ended Rider FRT, and the entity has been reported to recommend rate increases of 10-12.5% for electricity and 0.8-2.8% for natural gas – well below the 24% and 18% increase that is requested.

Four public hearings were held during the month of February. Duke Energy Ohio customers can still voice their opinions online, through formal comment submissions. The electricity rate increase comment form can be found here, and the natural gas increase comment form can be found here.

Duke Energy Ohio customers cannot avoid the rate increases if approved since the charges are distribution-related. They can, however, shop around for the supply side of their electricity service by comparing retail electricity providers that serve the Duke Energy Ohio territory. When customers shop around, Duke Energy Ohio is still responsible for delivering the electricity, maintaining the wires and poles outside homes and business, sending bills, and responding to emergencies. The only real difference is a different rate on the monthly utility bill.

To shop around, scroll to the top of this page and enter your zip code into the red bar. Click “Compare!” to view a list of providers and their plans that are available in your area.