The Indiana Utility Regulatory Commission has denied two requests for rate hikes to pay for major improvement projects. The combined $2.6 billion would have funded proposals from Duke Energy and Indiana Michigan Power. I&M officials say they are “disappointed” by the decision. May 8, 2015
INDIANAPOLIS, Ind. – Indiana Utility Consumer Counselor David Stippler made the following statement regarding today's Indiana Utility Regulatory Commission (IURC) orders denying the 7-year infrastructure plans filed by Duke Energy and Indiana Michigan Power (I&M):
“The IURC orders denying the requests from Duke Energy and Indiana Michigan Power (I&M) are significant victories for consumers. They also send a strong statement to utilities that when they seek higher rates, they must clearly justify their requests with sufficient cost support.
“A 2013 Indiana law allows energy utilities to seek IURC approval of seven-year plans for basic infrastructure improvements, and then recover the costs through rates as they are incurred. Duke Energy's $1.87 billion infrastructure plan included numerous projects beyond the law's scope. But more importantly, Duke Energy's case-in-chief did not include line-item breakdowns or other sufficient details – as required by law – that would have allowed for a meaningful review of its cost estimates. The OUCC and additional consumer parties to this case argued that the utility's request should be rejected for those reasons.
“I&M's effort to increase rates to pay for vegetation management was among the OUCC's principal concerns regarding I&M's $787 million plan. OUCC witnesses argued that these costs may be appropriately sought and recovered through a general rate case which allows for a full review of the utility's finances, but are beyond the scope of the expedited rate relief allowed under the 2013 law. By denying I&M's requested seven-year plan, the IURC held both I&M and Duke Energy to the same standard.
“We are genuinely pleased with the results contained in these Commission orders.”
(IURC Cause Nos. 44526, 44542, 44543)
The Indiana Office of Utility Consumer Counselor (OUCC) represents Indiana consumer interests before state and federal bodies that regulate utilities. As a state agency, the OUCC’s mission is to represent all Indiana consumers to ensure quality, reliable utility services at the most reasonable prices possible through dedicated advocacy, consumer education, and creative problem solving.
Visit us at www.IN.gov/OUCC, www.twitter.com/IndianaOUCC, or www.facebook.com/IndianaOUCC.
Source: The Indiana Office of Utility Consumer Counselor
May 9, 2015
FORT WAYNE, Ind. – Indiana Michigan Power, an operating unit of American Electric Power (NYSE: AEP), re-emphasizes its commitment to provide safe, reliable power in the wake of a regulatory order denying I&M’s plan to boost its infrastructure critical to serving its customers.
Although the Indiana Utility Regulatory Commission turned down I&M's Reliability Enhancement Program on Friday because it wanted more detailed information, the commission did not challenge the need for I&M to update its infrastructure.
“I&M stands prepared to work with the IURC and other stakeholders to support the regulatory process to enable the IURC to approve this program so that we can continue to provide reliable service to our customers,” said Paul Chodak III, I&M President and Chief Operating Officer. “Indiana lawmakers served our customers well when they adopted a law (Senate Enrolled Act 560, adopted in 2013) that established a process specifically aimed at offering electric utilities a method to update aging electric grid infrastructure. We believe our Reliability Enhancement Program filing met the requirements of the law, and were surprised by the order since most of the plan was supported by the parties in the case.”
Although I&M is disappointed with the IURC's decision, the company respects the regulatory
and legal process, and will continue to pursue approval of a Reliability Enhancement Program.
After the Indiana Court of Appeals recently overturned the commission’s previous approval of
another utility's infrastructure plan, I&M recognizes that the interpretation of the law is somewhat uncertain.
I&M firmly believes its proposed projects, which include several new substations important for the community, are reasonable and necessary to assure customers are served reliably. The company is studying the commission’s ruling and weighing options. Regardless of the next step, I&M is as committed as ever to serving its customers as their hometown energy provider.
“The Reliability Enhancement Program is all about our customers – updating the equipment that serves them with an ample supply of energy at rates well below state and national averages,” Chodak said. “The initial rejection of our plan simply redoubles our commitment to
demonstrate to state regulators that our plan was well conceived and would be well managed.
I&M remains committed to proactively updating our infrastructure and continuing our mission to provide safe, reliable power to our customers.”
“Reliability depends on sound infrastructure, and our aging electric grid needs updates,” Chodak said. “The Reliability Enhancement Program would allow I&M to more proactively update the aging infrastructure – in many cases, solving problems before they occur.”
Indiana Michigan Power (I&M) is headquartered in Fort Wayne, and serves more than 582,000 customers in Michigan and Indiana. It operates 3,595 MW of coal-fired generation in Indiana, 2,110 MW of nuclear generation in Michigan and 22 MW of hydro generation in both states. The company also provides its customers 450 MW of purchased wind generation.
I&M is a unit of American Electric Power (NYSE: AEP), which is one of the largest electric utilities in the United States, delivering electricity to more than 5.3 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a more than 40,000-mile network that includes more 765-kilovolt extrahigh voltage transmission lines than all other U.S. transmission systems combined. AEP's transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas.
AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West
Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power,
Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio. Additional information about I&M is available at IndianaMichiganPower.com
Source: Indiana Michigan Power