Duke Energy Indiana faces legal challenge over refund interest rates

Duke Energy Indiana is currently embroiled in a legal debate with the Duke Industrial Group (DIG) and the OUCC regarding the appropriate interest rate on refunds owed to ratepayers. The contention arises from a Court of Appeals decision in the appeal from Cause No. 45253-S1, which has led to discussions on how much interest should be paid on these refunds.

Initially, Duke Energy opposed the inclusion of any interest on the refunds. However, as discussions progressed, the company proposed a minimal 2% interest rate, starting from the date of the Order. This proposal has been met with resistance from both DIG and the OUCC. They argue for the application of a statutory 8% interest rate, citing established legal precedents and the Indiana Supreme Court's decisions.

The legal arguments delve deep into Ind. Code §8-1-3-6, which mandates refunds in cases where utilities collect charges under an order that is later reversed on appeal. Historically, such refunds have included interest to compensate ratepayers for the time their funds were held by the utility.

Duke Energy's shifting stance on the interest rate and its proposal to limit the accrual of interest has raised concerns. The company suggests that interest should only start accruing from the date of the Order, effectively halving the interest amount. However, legal precedents indicate that interest should begin from the date of the overcharges.

For ratepayers, the outcome of this debate is significant. With the total amount of refunds estimated at around $12 million, the difference between a 2% and an 8% interest rate could mean a substantial sum. The decision will determine how much compensation ratepayers receive for the utility's retention and use of their funds.