Rate Impact of Powering the Next
I&M filed a rate review with the Indiana Utility Regulatory Commission (IURC), requesting a revenue increase of $104 million or 6.5%. The new rates will support I&M’s plans of Powering the Next in reliability, new technologies and superior customer experience.
The bottom line -- The proposed rate increase for customers is equivalent to less than $10 per month for an average residential customer using 1, 000 kilowatt hours (kWh) or less than 33-cents-per-day.
Under the proposed rate plan, a typical residential customer would see their bill go up from about $158 to $167 per month; an increase of 6%. The monthly service charge would increase from $15 to $20, but this is part of, NOT in addition to, the overall change in rates.
Phased In Rates
- Phase one: initial rate increase will occur in May 2022 with customers seeing about a 4.55% increase.
- The phase-in credit of $31 million will go into effect in May, reflecting capital projects I&M expects to complete in 2022.
- Phase 2 occurs when this phase-in credit is reset in January 2023.
- I&M will make a compliance filing to reflect the actual capital that was put in place in 2022. Once the credit is reset, customer bills will reflect the full results of the rate review.
- In January 2023, I&M proposes to credit the Resource Adequacy Rider (RAR) to reflect the decrease in expense from the Rockport Unit 2 lease expiring on December 7, 2022. If approved through the rate case, I&M will make a filing in 2022 to update the RAR for this change effective in January 2023.
How Does a Rate Review Work?
A utility’s regulatory rate review uses a 300-day open process that allows the public, customers and organizations to submit testimony and declare support or opposition to all or part of a proposal.
These proposals are necessary for utilities to fund needed projects, as regulated utility earnings are capped and rates can only be changed by the regulatory commission.
Your rate is made up of the cost of providing the energy to your home and includes the cost of generation, poles, wires, personnel and capital projects, such as environmental control technologies, and new equipment to ensure the reliable delivery of power to you.
This overall cost of service is then divided up based upon the number of customers served and then applied to the amount of energy you utilize in your home to determine the cost to you as seen on your monthly billing statement.
Consumer organizations, customer groups and others affected may seek “intervenor” status, allowing them to be a party in the case.
The five-member IURC hears the evidence and makes decisions based on the evidence presented. By law, the bipartisan IURC is an advocate for neither the public nor the utilities and is required to ensure utilities provide reliable service at reasonable rates.
Another state government agency, the Indiana Office of Utility Consumer Counselor (OUCC), represents customers and the public. The OUCC advocates for customers, while the IURC is impartial.