Fort Wayne-based Indiana Michigan Power has reached a settlement agreement with the Indiana Office of Utility Consumer Counselor and other parties over its proposed rate case. If approved by the Indiana Utility Regulatory Commission, the deal will result in a 5% reduction in base rates for Hoosier residential customers.
I&M had originally proposed to increase rates in an effort to cover the costs for a number of infrastructure improvements.
However, the utility says a separate agreement reached in September that said customers would no longer be responsible for the operating costs of Unit 2 at the Rockport Generating Station beginning in December 2022 would offset those costs.
Under the terms of the agreement, residential customers will see a 1% reduction in base rates in May 2022, followed by a larger decrease in January 2023. The monthly residential customer charge, which does not vary based on usage, will remain at $15, instead of the originally proposed increase to $20.
“I&M’s plan will pave the way for I&M’s transition to renewable energy, enhance reliability and make our service more affordable,” I&M President Steve Baker said in a news release. “We are pleased to collaborate with the Indiana Office of Utility Consumer Counselor (OUCC) and a number of other groups to reach an agreement that best serves customers by lowering their base rates while supporting I&M’s program to sustain and enhance service.”
The utility says the settlement preserves its plan to invest more than $350 million in reliability and grid resiliency improvements to its electric distribution system. That project includes replacing more than 2,500 poles and 120 miles of power lines, as well as upgrading 16 substations and replacing old meters with new smart meters.
“I commend the hard work of the OUCC’s legal and technical staff for presenting a strong case and negotiating this agreement. I also commend the additional consumer and governmental parties that intervened, as well as I&M, in working collaboratively to bring this case to a fair resolution,” said Indiana Utility Consumer Counselor Bill Fine. “Customers will benefit from this agreement and the cooperative efforts that have led to it.”
The IURC is expected to review the settlement agreement next month and make a final ruling in 2022.