OUCC Responds to I&M Rate Increase Proposal

Posted: Updated:
The AEP subsidiary is headquartered in downtown Fort Wayne. The AEP subsidiary is headquartered in downtown Fort Wayne.
INDIANAPOLIS -

The Indiana Office of Utility Consumer Counselor has responded to a proposed electric rate increase by Fort Wayne-based Indiana Michigan Power. The OUCC is recommending approval of an increase that would generate less than half of the new annual operating revenues I&M is seeking.

Under I&M's proposal, the utility would rise the monthly residential charge from $7.30 to $18.00, which would generate $263 in new operating revenues. The OUCC is recommending capping that increase at $8.30.

I&M announced the proposed rate increase in July. The utility says, if approved by the Indiana Utility Regulatory Commission, the increase would be phased in over two years. I&M plans to use the money generated through the increase to make system improvements, including the replacement of poles, overhead lines and underground lines.

The utility is also requesting an increase in its authorized return on equity from 10.2 percent to 10.6 percent. The OUCC is recommending reducing that number to 8.65 percent. Other OUCC recommendations include:

  • Denial of I&M’s requests to shorten its depreciation periods for new meters and for Unit 1 at the utility’s Rockport Generating Station.
  • Reducing various line items pertaining to the utility’s operating expenses including personnel costs, nuclear decommissioning funding, and vegetation management.
  • Reducing the number of extra charges through trackers on consumers’ bills while seeking further Commission review of escalating costs related to transmission projects. 
  • Denying newly proposed trackers and denying the continuation of certain existing trackers, which allow the utility to adjust rates for specific items between general rate cases.

"Through the use of our technical and legal resources over the last three months, we have calculated recommendations that, if approved, will provide I&M with the revenue it needs to ensure safe, reliable service for its Indiana customers," said Indiana Utility Consumer Counselor Bill Fine. "Our testimony reflects a careful, thorough review of the evidence and additional information obtained through the discovery process."

The OUCC's testimony filed with the Indiana Utility Regulatory Commission includes written comments from more than 2,700 I&M customers as well as public comments made last month at hearings in South Bend, Fort Wayne, and Muncie. South Bend Mayor Pete Buttigieg also released a statement citing concerns about the proposed increase.

"Our focus is twofold: affordability issues and climate concerns," said Buttigieg. "Many residents would be strained by the proposed rate increases, and South Bend industries that depend on affordable power will find it more difficult to compete if rates are too high. We also consider it increasingly urgent to see better investment in cleaner and renewable sources of energy. We need utilities to step up, especially at a time when the community is already beginning to feel the effects of climate change."

I&M has until December 6 to file rebuttal testimony with the IURC. The commission will begin its evidentiary hearing on January 16 in Indianapolis and is expected to make a ruling on the proposal in the spring.

In testimony filed late Tuesday, the OUCC recommends:

Limiting the increase in I&M’s flat, monthly residential customer charge to only $1.00. I&M is proposing to raise the monthly residential charge from $7.30 to $18.00. The OUCC’s recommendations would cap that amount at $8.30. In its testimony, the OUCC notes that the utility’s proposed customer charge increases would discourage energy efficiency and disproportionately affect low-volume customers, while violating the ratemaking principle of gradualism.

Reducing I&M’s authorized return on equity to 8.65 percent. The utility’s current authorized return is 10.2 percent, and it is requesting an increase to 10.6 percent in this case.

The OUCC’s exhibits include written comments from more than 2,700 I&M customers. More than 100 I&M customers spoke at the IURC’s public field hearings in South Bend, Fort Wayne, and Muncie last month.

The utility’s rebuttal testimony is due December 6, 2017 with an IURC evidentiary hearing scheduled to start on January 16, 2018 in Indianapolis. While evidentiary hearings are open to the public, participation is typically limited to attorney and Commission questioning of technical witnesses who have filed testimony on behalf of the case’s formal parties. The Commission’s order is expected in spring 2018.

I&M provides electric utility service to approximately 460,000 customers in 24 northern, northeastern, and east-central Indiana counties. 

  • Perspectives

    • Indiana's Rural Digital Divide is Real, But There Are Solutions

      While the digital divide may be shrinking in the United States, it is getting wider in our nation’s rural communities, and this is costing these communities $47 billion a year, according to a recent study by the U.S. Chamber of Commerce and Amazon. With a rural population of roughly 22 percent, Indiana has reason to be concerned. The digital divide—a gap in access to information and communications technology— was generally seen as shrinking in recent years with the...

    More

Subscribe

Name:
Company Name:
Email:
Confirm Email:
HTML
INside Edge
Morning Briefing
BigWigs & New Gigs
Life Sciences Indiana
Indiana Connections
INPower
Subscribe
Unsubscribe

Events



  • Most Popular Stories

    • (rendering courtesy of Indy Eleven)

      Lawmakers Pass Bill For New Soccer Stadium

      A bill that helps provide funding for a new soccer stadium in Indianapolis is heading to Governor Eric Holcomb's desk. Senate Bill 7 creates a professional sports development area, which would capture taxes to help fund the facility. The stadium would serve as the home of the Indy Eleven soccer team and is part of the proposed $550 million Eleven Park project, first announced in January. The bill also approves funding for upgrades to Bankers Life Fieldhouse and the...

    • (L to R) Liverpool Football Club Managing Director/Chief Commercial Officer Billy Hogan, LFC Legend Phil Babb, Notre Dame Athletic Director Jack Swarbrick.

      Notre Dame Stadium To Host Liverpool Football Club

      Notre Dame Stadium will this summer host the Liverpool Football Club as part of the English soccer team’s pre-season preparations. The team is also slated to play at Fenway Park in Boston and Yankee Stadium in New York City.

    • Picture Courtesy: National Rifle Association

      Indy Ready For NRA's Return

      The National Rifle Association returns to Indianapolis for its annual convention Thursday. Visit Indy Senior Vice President Chris Gahl says, while the event is polarizing, it is also very high-profile, with both President Trump and Vice President Pence set to speak. The convention is expected to bring in 75,000 people and generate a $35 million economic impact. Gahl says the event is on the books to return to Indianapolis in 2023. The 148th NRA Annual Meetings and Exhibits...

    • Indiana's Rural Digital Divide is Real, But There Are Solutions

      While the digital divide may be shrinking in the United States, it is getting wider in our nation’s rural communities, and this is costing these communities $47 billion a year, according to a recent study by the U.S. Chamber of Commerce and Amazon. With a rural population of roughly 22 percent, Indiana has reason to be concerned. The digital divide—a gap in access to information and communications technology— was generally seen as shrinking in recent years with the...

    • (Image courtesy of Amazon.com Inc.)

      Amazon Planning South Bend Facility

      Amazon Logistics has announced plans for its third Indiana delivery center. The company says the facility in South Bend will power its last-mile delivery capabilities in the region with the help of small businesses and independent contractors.