Indiana Michigan Power has filed a rate settlement agreement with the Indiana Utility Regulatory Commission that will reduce base rates for Indiana residential customers.
Under the settlement announced Wednesday, I&M will reduce base rates by about 5% over two phases with a decrease of about 1% in May and a larger decrease in January 2023.
The agreement is pending approval by the regulatory commission, which is expected to conduct a hearing next month to review the settlement proposal. A final ruling is expected next year.
This comes after I&M on July 1 requested a $104 million revenue increase – about a 6.5% hike – to make investments in reliability, customer experience and new technologies. If that request, which is still being reviewed, is approved, the average Indiana Michigan Power residential customer would pay about $9 more a month under the proposal.
The regulatory commission will decide whether to approve the request. The review process typically takes 300 days.
I&M said Wednesday that although it had requested an increase in rates, the company also can decrease its base rates as a result of a separate settlement reached in September, after the original case was filed. That agreement removes the Unit 2 portion of I&M's coal-fueled generation plant in Rockport from customer rates beginning in January 2023.
I&M and nine stakeholder groups representing various customer interests agreed to the terms of the settlement agreement announced Wednesday.
Those groups approving the settlement agreement were I&M Industrial Group, Citizens Action Coalition of Indiana, the city of Auburn Electric Department, the city of Muncie, joint municipalities that include the city of Fort Wayne, the city of Marion, Marion Municipal Utilities and the city of South Bend, Kroger Co., Wabash Valley Power Association and Walmart.
I&M said the settlement agreement helps its plans to enhance service reliability by updating and replacing aging infrastructure. As part of I&M's Powering the Next plan, the company will invest more than $350 million in reliability and grid resiliency improvements to the electric distribution system, the company said.
“Indiana Michigan Power constantly strives to serve customers with safe, reliable and affordable power,” Steve Baker, president and chief operating officer of I&M, said in a statement. “I&M's plan will pave the way for I&M's transition to renewable energy, enhance reliability and make our service more affordable.
“We are pleased to collaborate with the Indiana Office of Utility Consumer Counselor 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.”