Summary
Duke Energy Corporation (DUK) has filed an 8-K report to disclose a significant development regarding its Indiana subsidiary, Duke Energy Indiana, LLC (DEI). On June 29, 2020, the Indiana Utility Regulatory Commission (IURC) issued an order approving a rate increase for DEI. This approval represents a partial but positive outcome for the company's general rate case initially filed in July 2019, which sought a substantial 15.6% increase in retail revenues. The IURC order grants an approximate $146 million revenue increase, which is less than the initially requested $396 million. The approved rate of return on equity is set at 9.70%, lower than the 10.4% requested. Despite the reduction from the original request, this approved rate increase is expected to contribute to DEI's financial performance. The rate implementation will occur in two steps: Step 1, estimated at 75% of the total increase, is expected to take effect in late July 2020, with Step 2, comprising the remaining 25%, to be implemented in the first quarter of 2021.
Key Highlights
- 1Duke Energy Indiana (DEI) received an IURC order approving a revenue increase of approximately $146 million.
- 2This approved increase is a reduction from the initial request of approximately $396 million (15.6% of retail revenues).
- 3The approved rate of return on equity is set at 9.70%, down from the requested 10.4%.
- 4The approved equity component of the capital structure remains at 53.0%.
- 5The rate increase will be implemented in two steps: Step 1 (approx. 75%) effective late July 2020, and Step 2 (approx. 25%) effective Q1 2021.
- 6DEI will submit a compliance filing in July 2020 for IURC review before Step 1 rates are implemented.