Indiana Michigan Power wants to fund upgrades to infrastructure by increasing monthly electric bills come January 2019.
I&M is currently seeking a review, and an increase, in their base rates by the Indiana Utility Regulatory Commission. If the commission approves the increase as presented, the average customer would be charged an additional 85 cents a day, or $25 a month.
“With the work that has been done and that we are currently doing, we are asking the commission to give us a higher rate,” said Tracy Warner, a spokesperson for I&M. “It’s a big investment in our infrastructure.”
Called, “Building the Future,” the requested rate increase would provide I&M an additional $263 million annually to replace utility poles and wires. The utility also wants to develop a four-year tree trimming cycle.
Some of I&M’s infrastructure dates back to the 1930’s and 40’s, specifically utility poles. The utility plans to replace 1,400 poles and miles of overhead and underground lines next year.
In Grant County, I&M plans to replace one mile of wire along County Road 100 and 1.3 miles of wire along County Road 950 South.
A consistent vegetation trimming cycle would help combat outages, the company says.
Warner said that in 2016, 50 million customer minutes were lost and 100,000 separate outages were caused by falling tree limbs.
The bid for a rate increase is the first from the company since 2011 and the third in the last 25 years. Warner said that although the impact on customer’s wallet’s is more than the last increase of $12, the company believes it’s necessary.
“We want to ensure reliability while keeping rates affordable,” he said. “We wouldn’t ask for it if we didn’t think it was necessary. We’re always mindful of the impact.”
The rate is based on a customer’s kilowatt hour usage per month.
It’s not a guarantee the IURC will approve the rate increase as is, however.
Stephanie Hodgin, public relations manager for the IURC, said the commission usually approves less than what utility companies present.
This is due to the complexities of the cases, Hodgin explained.
“Each case is different, complicated and not as straight forward,” she said. “Many cases, in fact, are settlements between the utilities including the Office of Utility Consumer Counselor (OUCC), industrial groups, Citizens Action Coalition (CAC), and other parties to the case.”
In fact, when I&M went before the commission with a proposed rate hike in 2007, only a fraction of the $125.5 million increase requested was actually approved.
“I&M subsequently settled with the OUCC, CAC, Fort Wayne, South Bend and several industrial customers on a revenue increase of $44.167 million,” Hodgin said. “In our order, we modified the settlement agreement in several respects and approved a revenue increase of $41.630 million.”
The rate review process is a 43 week process. After I&M files their rate review, public comments and hearings will be held, stakeholders will respond to the filing, the commission will conduct their hearings and issue a ruling sometime after that.
“The bottom line is that it’s an aging system,” Warner said of the company’s need to improve their infrastructure. “We do keep cost impact of our customers in mind.”