This week Duke Energy Indiana announced what types of energy it expects to use to power homes and businesses in its coverage area over the next two decades, revealing plans to continue heavy use of fossil fuels despite more affordable advanced energy options on the market.
“Natural gas prices are rising and Hoosier ratepayers are already feeling the effects, but this plan by Duke Energy Indiana doubles down on a fuel that utility executives know is more expensive today and predictably volatile tomorrow,” says Sarah Steinberg, principal at Indiana Advanced Energy Economy (AEE). “It also delays the addition of advanced energy resources, like solar, wind, and battery storage, until the next decade, which will lock in higher bills for Hoosier ratepayers instead of making investments in more cost-effective options today.”
The details come in Duke Energy Indiana’s new integrated resource plan (IRP) for the next 20 years. The plan shows that Duke will be slow to incorporate solar and wind energy into its energy resource mix, and slow to transition away from coal and gas. It also shows underinvestment in energy efficiency and other demand management strategies.
Recent analysis commissioned by Indiana AEE found that Duke could cost-effectively roll out significantly more energy efficiency programming for its customers, immediately lowering customer bills and reducing the future need for big, costly investments in new electric generation. In fact, the study found Duke could be cost-effectively saving twice as much energy across its coverage footprint in Indiana than it does today, and that doing so would help put Duke Energy’s efficiency efforts more in line with those of some of its neighbor utilities in Indiana, including CenterPoint Energy (formerly Vectren) and NIPSCO. This would translate into meaningful monthly bill reductions for residential customers and Indiana businesses.
“If Duke prioritized energy savings, it could avoid spending ratepayer dollars on things like new gas plants and transmission lines, and that could save Hoosiers money on their electric bills for decades to come,” added Steinberg.
In 2020, Indiana AEE also found that Duke could save its ratepayers up to $423 million by 2025 by moving quickly toward advanced energy resources to replace its coal plants, which often operate uneconomically, directly costing customers millions of dollars per year. While this latest IRP sets retirement dates for Duke’s remaining coal fleet, it envisions keeping some plants in operation for the next 15 years, even as their economics are likely to continue to worsen relative to low-cost, reliable advanced energy resources. Duke Energy Indiana will be issuing a request for proposals in early 2022, which will be the next opportunity to re-assess the conservative cost and incentive assumptions in Duke’s plan, and change course toward a lower-cost advanced energy future for its customers.