Fort Wayne-based Indiana Michigan Power has reached a settlement agreement with several stakeholders regarding its proposed rate increase. The utility is now requesting an increase in electric rates of 7.26 percent, compared to the nearly 20 percent it initially asked for in July.
The new request would generate nearly $97 million in additional revenue for I&M, down from the original request of $263 million. The settlement must still be approved by the Indiana Utility Regulatory Commission. If that happens, customers would see a $10.50 increase in their monthly electric bills.
If the IURC approves the plan, the new rates would be phased in beginning this July and becoming fully effective in early 2019.
"I&M is committed to serving our customers in the ways they want to be served, and we are pleased to significantly limit the increase in our proposed rates for customers while still preserving our plans to reduce outages by enhancing infrastructure and to gain more flexibility in transitioning our generation
sources to a more diverse energy mix," said Toby Thomas, chief operating officer of I&M. "We understand the impact of rates on our low-income customers, and I am pleased our revised plan includes additional assistance for them. To help build the communities we serve, the settlement also includes new economic development incentives."
The rate increase is part of I&M’s Building the Future plan, which includes infrastructure investments designed to enhance reliability and service. Aspects of that plan include accelerating tree trimming and clearing near power lines to reduce outages, modernizing the utility’s aging delivery system with expanded technology and stronger poles and wires, and eliminating the fee for charging a bill payment on a credit card.
As part of the settlement, I&M has also agreed to provide $950,000 to assist low-income customers by:
- Provide $250,000 to the Indiana Community Action Association for a new program to help qualified low-income customers with their winter electric bill.
- Provide an additional $150,000 to the Community Action organization for home weatherization, which reduces energy use.
- Establish a two-year pilot program, allocating up to $500,000 to help low-income customers catch up on their electric bill.
- Establish the Neighbor-to-Neighbor program to give residential customers the opportunity to voluntarily contribute to a fund that will help low-income customers with their bills. I&M will launch the fund with $50,000 in seed money.
The Indiana Officer of Utility Consumer Counselor, which offered its response to the proposed increase in November, is one of the 15 entities involved in the settlement. The others include the Indiana Community Action Association, Indiana Coalition for Human Services, City of South Bend, Sierra Club – Hoosier Chapter, Citizens Action Coalition of Indiana, The Kroger Co., Wal-Mart Stores East LP, Sam’s East Inc., City of Fort Wayne, 39 North Conservancy District, I&M Industrial Group, City of Marion, Marion Municipal Utilities, and the Muncie Sanitary District.