The OCC said it recommends that PUCO “... approve a rate decrease (not an increase) of at least $1.4 million for Duke’s consumers.”
For Duke Energy, this scenario would counter its proposed measures that would provide nearly $55 million in additional yearly revenue — about a 10% increase.
Somewhere in the middle, PUCO’s staff, which is made up of technical experts and economists, already formally recommended a significantly lower rate increase for Duke Energy.
PUCO’s staff recommended allowing measures that add between $1.9 million to $15.3 million to Duke’s yearly revenue.
The OCC, Duke Energy, PUCO staff, and other intervening parties will all present their evidence during a final, multi-day evidentiary hearing in August, where the PUCO board will act as a mediary and issue a final verdict.
Embs said the OCC is unwilling to predict the final, agreed upon rate increases once the rate case has concluded either by settlement or a final verdict following the evidentiary hearing.
Matt Schilling, a spokesperson for PUCO, said utility providers would file a rate case and present evidence that shows operation costs to be higher than the provider’s revenue. But, it is theoretically possible for arguments to be made that prove the inverse, too, depending on the evidence.
Sometimes, Schilling said, groups like the OCC or PUCO’s staff can prove evidence that says, “‘You know what, actually, costs are not above revenues, and so actually, rates should be reduced,’” Schilling said. “That could theoretically happen.”
Schilling said it’s relatively uncommon for PUCO to determine that a provider must reduce its rates, though. Such a case did happen last year, when electric provider AEP agreed to a settlement forcing lower rates.
In part, rates might not commonly go down because of the regulatory process of rate increases. Each proposal needs to be written out, backed with evidence and run through public hearings and evidentiary hearings before a final verdict from the PUCO board.
For that reason, Schilling said, it would be counter-intuitive for providers to apply for a rate increase if that provider believed there was a chance PUCO would vehemently disagree with the provider’s evidence.