Indiana Michigan Power announced Wednesday night it and a number of stakeholders representing varied customer interests submitted a settlement agreement that significantly reduces I&M's requested rates.
The reduction in the proposed rates largely reflects I&M’s new ability to pass savings from the federal Tax Cuts and Jobs Act to customers, I&M said. Additional savings were achieved through compromises with stakeholders regarding recovery of costs, I&M said.
As part of the agreement, subject to approval by the Indiana Utility Regulatory Commission, I&M said it will establish new programs to help low-income customers and offer economic development incentives directly to communities. I&M’s planned infrastructure investments designed to enhance customer reliability and service by reducing outages remain included in the rate review as the case moves forward, the power utility said.
As a result of the proposed settlement that included the Office of Utility Consumer Counselor and 14 additional entities, I&M’s proposed overall request is for an increase of $96.8 million, or 7.26 percent. The monthly increase for a typical residential customer who uses 1,000 kilowatt hours would be $9.41, or less than 32 cents per day. That includes the proposed customer charge portion of the bill, which would be $10.50 per month, second lowest among Indiana’s major electric utilities, I&M said.
In July, I&M asked the Indiana Utility Regulatory Commission to approve a 19.7 percent rate increase. Under that plan, I&M's fixed residential service charge would increase from $7.30 per month to $18.
Citizens Action Coalition, Indiana Coalition for Human Services, Indiana Community Action Association and the Sierra Club Hoosier Chapter joined the settlement, according to a statement issued Wednesday night.
"Our top priority in the case was to address the monthly fixed charge and what we viewed as an unreasonable request by the company," Kerwin Olson, executive director of Citizens Action Coalition, said in a statement. "We are pleased that we were able to work with I&M to negotiate a substantial reduction in this charge to a more manageable and reasonable level."
Indiana Utility Consumer Counselor Bill Fine said the Office of Utility Consumer Counselor and "intervening parties representing a diverse array of ratepayers negotiated these terms at arm’s length, and we are pleased to see a reasonable settlement with tangible benefits that will help ratepayers throughout I&M’s Indiana service territory."
The Office of Utility Consumer Counselor represents the interests of all Indiana consumers in cases before the Indiana Utility Regulatory Commission.
Other groups in the proposed settlement agreement, according to I&M, are the city of South Bend; 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 Muncie Sanitary District.
The proposed settlement must still be approved by the IURC. If approved, new rates would be phased in, becoming partially effective this July and fully effective early in 2019, I&M said.
Several key aspects of I&M’s Building the Future plan remain included in the rate review. The plan would:
• Diminish I&M’s No. 1 source of customer outages – trees and other vegetation – by accelerating trimming and clearing near power lines.
• Modernize I&M’s aging energy delivery system, using expanded technology as well as stronger poles and wires to make the system more resilient and reduce the impact of weather-related outages.
• Facilitate the transition to more diverse sources of energy by adjusting the depreciation of Unit 1 of its Rockport plant to prepare for its eventual retirement.
• Offer a new renewable energy program in which customers can choose to attribute
a specified percentage of their energy use – from 10 percent to 100 percent – to solar and wind energy.
• Eliminate the fee for charging a bill payment on a credit card.
Customers can learn more about Building the Future and the regulatory rate review process at www.IndianaMichiganPower.com/BuildingTheFutureIndiana.