The Journal Gazette
Friday, July 19, 2019 1:00 am


The price of a hike

I&M rate request must be fair to all

Indiana Michigan Power, which just received permission to raise charges for electric service last year, is back asking permission to impose an even bigger rate increase to take effect over the next 11/2 years. Who's to say they don't need it? What does the average person know about running an electric utility?

Fortunately, there is a process in place that allows the Indiana Utility Regulatory Commission to thoroughly evaluate that request, which would raise an average residential customer's bill by 11.75%.

The company says it needs money to replace aging infrastructure and add “smart meters” permitting quick response to any customer's service problems. “If (those needs) were discretionary and we could wait years and years, we would,” I&M President and CEO Toby Thomas said in an interview Tuesday. “This system can't wait that long, and that's the reason we're making these investments.”

The commission has the time, expertise and authority to weigh such assertions and to grant, deny or reduce the utility's request. In the case settled last year, the utility ultimately agreed to an increase roughly a third the size of its original request.

An important part of the evaluation process by the IURC took place over the past week through hearings in Fort Wayne, Muncie and South Bend. In Fort Wayne, where the largest number of ratepayers signed up to speak, the commission, the electric company and the Indiana Office of Utility Consumer Counselor, an independent governmental entity that advocates for ratepayers, got an earful. Customers testified the average $21.11-a-month increase, combined with other sources of financial stress, could put them under, The Journal Gazette's Rosa Salter Rodriguez reported.

As in previous rate increases, the poorest customers will be hit hardest. Witnesses noted that the utility's request includes a 43% jump in the fixed portion of a customer's bill, which makes it harder for those living on the financial edge to control the size of their bill by using less electricity.

“My wife is disabled and (we) can't even afford her medicine,” one witness, Jim Kline, told the commissioners emotionally. “There's no compassion.”

The morning after the hearings, a woman who said she was 65 years old and relies on fixed disability payments left this message for us: “The future in Fort Wayne doesn't look bright. The future would be a lot brighter if you guys would fight against this raise ... just please, try to help seniors.”

The economic boom notwithstanding, many in Fort Wayne already are struggling to pay for utilities. Since Jan. 1, Allen County's largest township has received 614 requests for first-time or repeat assistance with electric bills, according to Austin Knox, deputy trustee for Wayne Township, and Porsche Williams, director of intake and investigations.

 Knox, interviewed Thursday, said if the rate-increase request isn't averted, “We'll see a lot more people owe money. We will see more people come in.” And though there is a rainy-day fund for such contingencies, Knox said, there could come a point where the township doesn't have enough money to help all who are unable to pay their electric bills.

Last year, United Way of Allen County provided help with 2,219 electric bills.

Thomas said his company has restarted its Neighbor-to-Neighbor program, which allows customers to help other customers pay their bills. The utility is also “close” to launching a program that could forgive a bill for some customers who fall behind, and the rate request includes a proposal for a pilot program to help residents use less energy. 

 “We work on payment plans if customers are struggling to pay,” Thomas said. But “at some point, you have to take action and say, you've got to pay for the service.” 

Kerwin Olson, executive director of Citizens Action Coalition of Indiana, one of the organizations planning to intervene in I&M's request, said the programs so far available are far too small, and are designed only to help customers in crisis. A better approach, he said, would be to set rates for low-income customers that are affordable in the first place, as some neighboring states do.  “That's no different than economic-development tradeoffs,” he said, “or giving the City of Fort Wayne discounts on their streetlights.” 

 If I&M proves that it must raise its rates, the commission and the Utility Consumer Counselor must find a way to fairly ensure that its poorest customers aren't left behind.

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