The system worked. In a settlement announced last week, Indiana Michigan Power Co. agreed to accept an electricity rate increase that will total $96.8 million. The company's original request was $263 million.
A typical residential customer's bill would increase by $9.41 per month; I&M's original rate request would have increased that 1,000-watt customer's bill by almost three times that. The company had planned to raise the fixed monthly portion of residential bills from $7.30 to $18, which would have hit the utility's poorest customers the hardest. Under last week's settlement, that portion of monthly bills will rise $3.20, to $10.50.
I&M also agreed to add several programs aimed at helping low-income customers, including an arrearage-forgiveness pilot program to help struggling customers catch up on bills.
After I&M filed its rate-increase documents last September, it faced a legal challenge from a broad group of intervenors that included the cities of Fort Wayne, South Bend and Marion, nine industrial customers, and several consumer-advocacy groups.
The Indiana Utility Regulatory Commission had well-attended hearings in Fort Wayne, South Bend and Muncie. At each, customers trooped to the microphone to express their displeasure. And the Office of Utility Consumer Counselor collected comments from more than 2,700 customers.
In November, the utility consumer counselor, which makes recommendations to the Indiana Utility Regulatory Commission, said I&M's increase request should be slashed to about $125 million.
After the national tax cuts in December, the commission announced it would investigate how those reductions should affect rates of all the state's utilities. At that point, I&M reduced its request to $191.5 million.
Then last week, the utility consumer counselor, the intervenors and I&M announced they had agreed on a settlement. “There's no question that this is a good outcome for the ratepayers,” said Kerwin Olson, executive director of the Indiana Citizens Action Coalition.
Such agreements aren't always the case. When some of the parties challenging NIPSCO's last electric-rate hike request reached an agreement, Olson said, his organization wasn't even notified.
“I think that the process worked in this case,” Olson said. “Everybody was at the table. I&M, to its credit, really tried to speak to the concerns of all parties.”
Customers who spoke out played a crucial role, Olson said. “The public hearings had an enormous impact on everyone ... especially I&M.”
The I&M settlement plan still has to be approved by the utility regulatory commission, and a gas-rate increase request by NIPSCO is still under deliberation. NIPSCO's original rate request would have raised $143.5 million in annual revenue. In response to the tax cut, NIPSCO reduced its request to $117.9 million a year.
The utility consumer counselor's recommendation on that case is expected next Wednesday. Public comments may still be sent to www.in.gov/oucc/2621.htm, though the office's spokesman, Anthony Swinger, said his office can't guarantee those comments will be part of its presentation to the regulatory commission.