Under the settlement involving Duke, the Indiana Office of Utility Consumer Counselor, Nucor Steel and the Citizens Action Coalition of Indiana and others, the deployment of the so-called "smart meters" will be slower than proposed.
Rate increases associated with the meter launch would also be delayed.
The settlement requires Duke to work with the other parties in the settlement on the utility's schedule for installing the meters.
Duke said meter installation will begin January 1, but that it will take five to six years to deploy the systems to 775,000 customers in a 69-county service area.
The digital devices allow two-way communication between the utility and a home or business, recording energy consumption in more detail than a conventional meter.
C.-based Duke, Indiana's largest power utility, has said the meters will potentially save energy, automate meter reading and detect trouble before outages occur.
And because the meters can read remotely and measure in real time the amount of electricity flowing into a home, they can immediately detect when an individual customer loses power.
If the Indiana Utility Regulatory Commission approves the settlement, Duke customers would see a 5.5 percent increase in their bills by June 30, 2015.
A typical residential customer currently pays $97.20 per month.
Jim Stanley, president of Duke Energy Indiana, said the smart grid will transform how the system operates, "improving customer service, power reliability, and the efficiency of our transmission and distribution system."
Grant Smith, executive director of Citizens Action Coalition of Indiana, said that while there's a cost to the public, it isn't as much as it could have been.
He said the system will be more environmentally responsible, delaying the costs of building new plants and encouraging renewable energy.
Potentially, the system also would allow customers who use solar power or other alternative energy sources to sell excess power to the utility. There's also the potential for time-of-day pricing that charges higher rates during peak hours but less in other times, allowing customers to control costs.
Duke said it plans to apply for economic stimulus funds to help offset the costs associated with the smart grid upgrades.
The state utility regulatory commission has been studying smart-grid use by all energy utilities, said Rich Higgins, executive director of technical services for the Indiana Office of Utility Consumer Counselor.