PUCO Approves Duke Energy Ohio Settlement Agreement Including Customer Credits



COLUMBUS, OHIO (April 20, 2022) – Today the Public Utilities Commission of Ohio (PUCO) approved a settlement agreement resolving several natural gas regulatory cases involving Duke Energy Ohio. As a result, many of Duke Energy Ohio’s natural gas customers will see a large bill credit.

The settlement agreement resolves proceedings related to Duke Energy Ohio’s 2013-2019 expenses for environmental remediation of manufactured gas plants, and the implementation of the Tax Cuts and Jobs Act (TCJA) of 2017.

“Our approval of the settlement agreement is good news for Duke Energy Ohio’s natural gas customers,” stated Commissioner Dennis Deters. “As the utility’s costs go down due to lower tax rates, so do customers’ bills. Today’s settlement is doubly exciting as not only will customers receive a large bill credit but will avoid additional charges for environmental cleanup.”

Under the terms of the settlement, Duke Energy Ohio will apply insurance proceeds, TCJA savings, and PUCO staff adjustments to the utility’s remediation costs, to eliminate approximately $85 million in costs that otherwise would be billed to customers. Approximately $4.8 million in remaining insurance proceeds will be used to fund the utility’s low-income and senior citizen bill assistance programs.

Additionally, Duke Energy Ohio will credit customers with the remaining savings from the TCJA and reduce rates on a going forward basis to account for the reduction in the corporate tax rate. Specifically, Duke’s residential natural gas customers will see a one-time bill credit of approximately $133. Nonresidential customers will be credited over a 12-month period based upon their monthly consumption.

Lastly, the settlement calls for Duke Energy Ohio to seek approval from the PUCO to move to a market-based approach for sourcing the natural gas commodity for its customers who are not otherwise served by competitive suppliers or municipal aggregations. Competitive supply procurement models are utilized by Ohio’s other large natural gas utilities to serve default customers.

On Aug. 31, 2021, a settlement agreement was reached by Duke Energy Ohio, PUCO staff, Ohio Consumers’ Counsel and Ohio Energy Group.

Case background

In 2013, the Commission authorized Duke Energy Ohio to defer expenses related to the environmental cleanup of two former manufactured gas plants, citing the utility’s obligation to clean up the sites under the federal Comprehensive Environmental Response, Compensation and Liability Act. The plants were operated in Ohio from approximately 1850 through 1950 to produce commercial grade gas from the combustion of coal, oil, and other fossil fuels. Although these plants no longer exist, the remains of the subsurface structures and associated residuals such as coal tar, scrubber wastes, chemicals, and tanks are commonly found to remain under ground.

The TCJA took effect in January 2018. Among many other things, the TCJA reduced the federal corporate income tax rate from 35 to 21 percent. In 2018 the Commission directed all regulated utilities to set aside revenues to account for the change in the tax rate until such a time it could be reflected in utility rates. The Commission approved updated rates for Duke Energy Ohio’s electric customers in 2019.

A copy of today’s Commission opinion and order is available on the PUCO website at www.PUCO.ohio.gov by clicking on the link to Docketing Information System and searching for case 14-375-GA-RDR.