A bill that would weaken the Indiana Utility Regulatory Commission's ability to oversee expenditures by public utilities has passed both houses of the legislature. Soon, House Bill 1470 will arrive on Gov. Eric Holcomb's desk. He should veto it.
The measure has a seemingly noble goal – backers contend it will encourage utilities to upgrade and more efficiently maintain their equipment. But it will make it easier for utilities to increase what they charge customers for infrastructure improvements without going through a formal rate hearing. This is a bad idea, especially in a state where utility costs are already a burden for our poorest citizens.
Current Indiana law gives utilities a way to ensure timely reimbursement for infrastructure expenditures. They can file for preapproval of “transmission distribution and storage system improvement charge” plans. But that system requires utilities to specify exactly what poles, wires or transformers will need to be replaced over seven-year periods between rate-case hearings, a requirement affirmed by the Indiana Supreme Court last year.
HB 1470, written by Rep. Ed Soliday, R-Valparaiso, would relieve utilities of the burden of following those pre-plans. Utilities could decide what needs to be replaced as they go along and be assured of quick reimbursement for most costs. Those decisions would be reviewed by the regulatory commission only at the end of each seven-year period.
That may make things easier for utilities, but consumer advocates say allowing utilities to charge more with less oversight will increase the burden for ratepayers. In a powerful presentation last month, Indiana Citizens Action Coalition Executive Director Kerwin Olson pleaded with a Senate committee to at least add protections for Hoosiers on low and fixed incomes.
In a letter to Holcomb Tuesday, Olson and 12 other consumer, social justice and renewable energy leaders said a 2013 law already gives utilities the means they need to seek reimbursement for repairs, noting the commission has approved more than $4 billion in infrastructure plans in recent years. “The only outcome the bill will produce is higher monthly utility bills for Hoosiers,” the advocates wrote.
“It's no secret that Indiana's status as a low-cost energy state has plummeted,” the letter noted. “In 2007, residential electric prices were the 9th lowest in the country. Today Indiana's ranking stands at 27th.”
Instead of chipping away at its authority, the legislature should be safeguarding the Indiana Utility Regulatory Commission's ability to mitigate increases in the cost of electric power. Loosening state oversight on electric rates is no way for a leading industrial state to nurture its current industries and attract new ones. Indiana must also keep energy prices reasonable in order to protect hundreds of thousands of Hoosiers who struggle paycheck to paycheck even in the current strong economy. Gov. Holcomb, it will soon be up to you.