FORT WAYNE, Ind., Aug. 9, 2023 – Indiana Michigan Power (I&M), an American Electric Power (Nasdaq: AEP) company, is committed to improving the customer experience by enhancing reliability and offering innovative options. The company’s Powering Our Future program, submitted Wednesday to the Indiana Utility Regulatory Commission, outlines the next steps needed to continue this commitment.
The Powering Our Future plan benefits customers by:
- Improving reliability by replacing old equipment, continuing tree trimming and installing new grid technologies resulting in fewer and shorter power outages.
- Providing residential customers with more bill payment options that meet their needs and lifestyles.
- Using technology to provide an improved customer experience through better access to account information, shorter customer service call times and overall improved communication options.
- Beginning the process of evaluating the future of Cook Nuclear Plant beyond its current mid-2030s license expirations.
- Pursuing federal grants to reduce costs, improve reliability and help communities succeed.
Powering Our Future emphasizes continued improvements so fewer customers lose power and their power is restored faster. I&M’s ongoing improvements to the electric grid over the past five years led to a significant reduction in the time customers have been without power.
A prime example is the derecho windstorms that hit the Fort Wayne area in 2012 and again 10 years later. The 2012 storm with 91 mph winds resulted in 100,000 customers losing power for up to eight days. A similar storm last year with stronger winds resulted in 41,000 customers losing power, with service restored to all customers in four days.
In order to continue building on these successful efforts to maintain a strong electric grid and provide safe and reliable service to customers, I&M has requested a rate increase of 6.8%, or $116.4 million. The new rates will vary for residential, commercial and industrial customers and would be phased-in over two years, with the first in mid-2024 and the second in early 2025.
When fully implemented in 2025, the bill for a typical residential customer who uses 1,000 kilowatt-hours (kWh) of electricity a month would go from $162.16 to $176.99 per month. I&M’s proposal may result in lower rates if the company receives tax credits and federal or state grants that may offset future project costs.
I&M carefully weighs the impact that every project has on the cost of service to customers. The company’s goal is to find a balance between affordability and investments that are necessary to improve reliability. In addition, the company continually reviews its operations and looks for ways to be more efficient and cost-effective.
"I&M understands that our customers are feeling the effects of inflation and higher costs of goods and services,” said Steve Baker, I&M president and chief operating officer. “We have carefully reviewed the plans that are necessary for us to improve reliability of service and deliver a better customer experience. The Powering our Future plan is critical for I&M to continue to meet our customers’ expectations.”
Infrastructure and Reliability
Powering Our Future is key to I&M’s ongoing efforts to address aging infrastructure, enhance reliability and make the system more resilient to weather events. In 2023–2024, I&M proposes investing nearly $550 million in the infrastructure necessary to more reliably move electricity from power plants to our customers’ homes and businesses and prepare I&M for the grid of the future.
With a growing number of I&M’s poles, wires and other equipment reaching the end of their expected life spans, I&M is systematically prioritizing infrastructure replacements and incorporating new technologies to improve the system. For example, with Powering Our Future, I&M will replace more than 2,800 aging poles and 240 miles of wire.
I&M’s continued commitment to improve reliability is shown in the statistics. The number of total minutes customers were without power dropped by 31% over the past five years. Much of that progress was due to a 30% reduction in outages caused by trees – and a significant cause of I&M power outages.
I&M continues to increase its use of smart technology to detect outages and automatically route electricity around damage to restore service more quickly to a larger number of customers.
I&M’s approach is a thoughtful, reasoned, flexible process to complete the right projects at a reasonable cost to ensure reliable service.
New Payment Option
I&M is proposing PowerPay, a voluntary payment option that allows customers to pre-pay their electric bills, much like pre-paid cell phones. PowerPay offers customers a choice of when and how to pay their electric bills, providing the opportunity to make payments that are more in line with their cash flow.
PowerPay would help customers avoid larger-than-expected bills by receiving daily updates on usage and related costs. With no deposits, reconnection or late fees, PowerPay would help remove barriers for new customers to make deposits and help reduce account balances.
The program is voluntary, and customers who prefer standard monthly billing would not have to change how they pay their bills.
Cook Nuclear Plant
The plant, located in Bridgman, Mich., plays a key role in meeting our customers’ energy needs. Cook Nuclear Plant has two units that separately generate power and are licensed through 2034 and 2037, respectively. Though those dates are over a decade away, the process for extending the license of a nuclear plant is lengthy and requires much advance work.
To make the best decision on how to move forward, I&M proposes to begin the process in 2024 to study whether to apply for an extension. In our Powering Our Future plan, I&M is seeking regulatory approval for the study, but most of its costs will be deferred and not included in this rate review.
Customer Information System
I&M serves about 482,000 Hoosier homes and businesses over 3,200 square miles. As the needs of our customers change, modernization of the technology they interact with is essential.
The Powering Our Future plan includes a new customer information system. The new system will enable I&M to meet customers’ expectations by providing a modern platform to communicate through texts, e-mail, smart-phone apps and the company’s website.
This system will allow I&M to offer customers additional programs and position I&M to serve its customers as new technologies and customer expectations continue to evolve.
More than 60% of residents in both Delaware and Grant counties lack access to high-speed internet. I&M proposes to offer infrastructure that could greatly expand internet service by building 252 miles of fiber optic cable and utilizing 465 miles of existing fiber cable.
I&M has applied for a federal grant and received initial approvals to leverage its investments in providing reliable electric service to provide a “middle-mile” connection that local internet service providers will be able to use to connect individual customers to the Web. This opportunity to attract federal grant funds into I&M’s service area to support connectivity for I&M’s customers will not only improve the quality of life for residential customers but will benefit schools, universities and health care providers in the region.
Powering Our Future proposes to adjust the customer service charge to more accurately reflect the true cost of service provided to each customer. The costs of poles, wires, transformers and other infrastructure do not change based on the amount of energy used, yet most of a customer’s bill is based on their volume of electricity.
I&M is requesting a change in the residential customer service charge, from $14.79 to $17.50, to better reflect the fixed cost associated with connecting a customer to the system. The proposed increase is included in – and not in addition to – the proposed new rates.
The Indiana Utility Regulatory Commission will review I&M’s plans using a transparent process that offers opportunity for public review and input. Typically, that includes public hearings that offer customers the opportunity to voice their opinions. Customers can learn more about Powering Our Future and the regulatory rate review process at www.IndianaMichiganPower.com/PoweringOurFuture-IN
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Indiana Michigan Power (I&M) is headquartered in Fort Wayne, and its approximately 2,000 employees serve more than 600,000 customers. More than 80% of its energy delivered in 2022 was emission-free. I&M has at its availability various sources of generation including 2,278 MW of nuclear generation in Michigan, 450 MW of purchased wind generation from Indiana, more than 22 MW of hydro generation in both states and approximately 35 MW of large-scale solar generation in both states. The company’s generation portfolio also includes 1,497 MW of coal-fueled generation.
American Electric Power, based in Columbus, Ohio, is powering a cleaner, brighter energy future for its customers and communities. AEP’s approximately 17,000 employees operate and maintain the nation’s largest electricity transmission system and more than 225,000 miles of distribution lines to safely deliver reliable and affordable power to 5.6 million regulated customers in 11 states. AEP also is one of the nation’s largest electricity producers with approximately 30,000 megawatts of diverse generating capacity, including more than 7,000 megawatts of renewable energy. The company’s plans include growing its renewable generation portfolio to approximately 50% of total capacity by 2032. AEP is on track to reach an 80% reduction in carbon dioxide emissions from 2005 levels by 2030 and has committed to achieving net zero by 2045. AEP is recognized consistently for its focus on sustainability, community engagement, and diversity, equity and inclusion. AEP’s family of companies includes utilities AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana, east Texas and the Texas Panhandle). AEP also owns AEP Energy, which provides innovative competitive energy solutions nationwide. For more information, visit aep.com