US electric power giant Duke Energy Indiana filed a US$1.9 billion plan with Indiana state utility regulators this week to modernise its ageing electric grid including the installation of an advanced metering infrastructure system. 

Duke Energy, which has a customer base of 7.2 million electric customers, confirmed that the seven-year plan would use a combination of advanced technology and infrastructure upgrades to improve service to its customers and provide them with better information about their energy use.

Doug Esamann, president of Duke Energy, said: “Today we still deliver power much like we did a century ago, but there’s technology now that can help utilities reduce power outages. With advanced systems, we can pinpoint problems faster and get the lights on sooner while providing customers with better information.”

Role of smart meters

Part of the plan includes providing customers with “better information to manage their energy use” and “fewer estimated customer bills” through the use of smart meters. Duke Energy noted in a statement that approximately 40 per cent of the nation already has made the transition to advanced meter technology.

The electric services company also cites metering technology as speeding up outage identification.

Other predicted benefits would be fewer and shorter power outages from using ‘self-healing’ smart grid technology, and  improved power reliability and safety from updating and replacing electric grid infrastructure, including substations, utility poles, power lines and transformers.

Regulatory approval

If the plan is approved by the Indiana Utility Regulatory Commission (IURC), customers will see a gradual rate increase averaging about 1 per cent per year between 2016 and 2022.

The company is filing the plan under the provisions of Indiana Senate Enrolled Act 560, state legislation that was passed in 2013 and is aimed at improving utility infrastructure.

The law allows a utility to file a seven-year infrastructure improvement plan with state utility regulators.

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. Under the new law, utilities must file a base rate case before the end of their seven-year plans.

The IURC will set a schedule for hearings in the case. A decision is expected in Q1 2015.