Indiana utility regulators have approved an agreement between Duke Energy and consumer groups to lower customer electric rates using savings from the new federal tax law.
The move will mean a 5.6% average rate reduction for Duke Energy Indiana customers by 2020, with most of the savings beginning in 2018.
Additional savings as a result of the federal tax act and the settlement will be reflected in future filings before state utility regulators. The amount of the tax savings will vary by customer class. Average residential customers using 1,000 kilowatt-hours a month will save $7.33 on their monthly electric bills by 2020.
Duke Energy, the Indiana Office of Utility Consumer Counselor, the Indiana Industrial Group and Nucor Steel submitted the agreement to the Indiana Utility Regulatory Commission in late June. The agreement outlined how to pass along to customers the benefits of the Tax Cuts and Jobs Act, which federal lawmakers passed in late 2017.
"This is an important agreement and the commission's approval allows us to begin passing along savings to customers immediately and ensure they see the benefit of the new federal tax law," said Duke Energy Indiana President Melody Birmingham-Byrd. "It's a unique opportunity to lower electric rates and help offset other costs."
Duke Energy began reflecting the lower federal tax rate in customer bills earlier in 2018 as it filed new electric bill riders with the state utility regulatory commission.
In addition to the tax reductions in bill riders, the settlement agreement reduces base rates in September 2018 to reflect the lower tax rate. The agreement also includes refunds of accumulated deferred taxes in 2018 and 2020.