Dive Brief:

• Indiana regulators last week denied seven-year system upgrade proposals by Duke Energy and Indiana Michigan Power Co., indicating the utilities' plans were not specific enough, or sought improper recovery. 
• Duke's seven-year plan would have cost almost $1.9 billion, while I&M Power's plan was estimated to cost more than $700 million. Those costs would have been passed onto customers through rate increases.
• The Indiana Utility Consumer Counselor hailed the decisions as a victory for customers, sending the message that rate increases need to be fully justified.

Dive Insight:

The Indiana Utility Regulatory Commission last week issued orders denying more than $2.5 billion in rate increases proposed by Duke and I&M Power. "We find that Duke's proposed T&D Plan does not contain sufficient detail," regulators said.

Indiana Utility Consumer Counselor David Stippler issued a statement following the decisions, calling the orders a "significant victories for consumers."

The commission's decision also sends "a strong statement to utilities that when they seek higher rates, they must clearly justify their requests with sufficient cost support," Stippler said. He explained that a 2013 law allows energy utilities to seek regulatory approval of seven-year plans for basic infrastructure improvements, and then recover the costs through rates as they are incurred.

"Duke Energy’s $1.87 billion infrastructure plan included numerous projects beyond the law’s scope," Stippler said. "But more importantly, Duke Energy’s case-in-chief did not include line-item breakdowns or other sufficient details — as required by law — that would have allowed for a meaningful review of its cost estimates."

I&M had asked to raise rates in order to pay for vegetation management, but regulators said those costs should be taken up through a different rate case.

Both utilities told the AP they are still examining the orders and deciding how to proceed. Duke spokeswoman Angeline Protogere pointed out to the newspaper, however, that the company's grid is getting older and "reliable energy depends on hundreds of miles of power lines moving electricity from place to place."