Electric utility customers – particularly those with electric heat – can rest a bit easier with news the Utility Consumer Counselor's office proposed cutting of Indiana Michigan Power Co.'s rate increase request by more than half. The Indiana Utility Regulatory Commission will have the final word, but the counselor's findings carry clout.
The findings released last week are an important step in the public utility rate-setting process. I&M filed its case for a rate hike in July, seeking increases that would occur in two phases, taking effect next July 1, and Jan. 1, 2019. When fully implemented, I&M has estimated its request would raise a monthly residential electric bill for 1,000 kilowatt hours from $125.88 to $151.16.
The state's utility consumer counselor works on behalf of utility customers, studying the complex cases filed by regulated utilities to make a recommendation to the five-member regulatory commission. In this case, the utility counselor's office challenged the utility's proposal to raise the fixed, monthly residential charge from $7.30 to $18. That's the charge incurred by a customer before usage is calculated. The proposed charge would represent an undue burden on households using the least amount of electricity – typically, low-income and fixed-income households, according to the utility counselor's office. That point was made repeatedly in public hearings conducted in Fort Wayne, South Bend and Muncie.
The filings concede I&M's request for additional operating income is justified, but recommend the regulatory commission approve only about $125.2 million instead of the $263 million requested. The electric utility's “Building the Future” plan seeks to strengthen infrastructure, reduce outages and broaden its mix of energy sources.
Objections to the rate-hike proposal have been filed by Steel Dynamics, Kroger, Wal Mart, the city of Fort Wayne, the Indiana Coalition for Human Services and more.
I&M's rebuttal to the findings of the utility couonselor is due Dec. 6. A hearing is set to begin Jan. 16, followed by closing arguments submitted in writing. The regulatory commission is expected to issue its rate order in May. It's a long process, undoubtedly one with higher electric bills at the end. But the process ensures the decision on how much higher is fair to both the utility and its customers.