• Overall base rates will drop nearly $95 million
• Plan preserves infrastructure investments for grid enhancements
FORT WAYNE, Ind., Feb. 23, 2022 – Indiana Michigan Power (I&M), an American Electric Power (Nasdaq: AEP) company, will reduce Indiana residential rates following the Indiana Utility Regulatory Commission (IURC) approval of a rate settlement agreement.
Under the settlement, I&M will reduce its base rates for Indiana residential customers by nearly 6%. The $94.7 million reduction will occur over two phases, the first effective immediately and the second in January 2023.
“Indiana Michigan Power is pleased to have the ability to reduce rates while continuing to invest in I&M’s infrastructure, making the grid more resilient and enhancing reliability as part of our Powering the Next plan,” said Steve Baker, president and chief operating officer of I&M. “By collaborating with the Indiana Office of Utility Consumer Counselor (OUCC) and a number of other groups representing stakeholders, together we reached a settlement that serves the best interests of our customers.”
Enhancing Reliability, Updating TechnologyThe rate agreement preserves I&M’s plans to enhance reliability of service to customers by investing more than $350 million to strengthen the electric grid in Indiana, making it more resilient. I&M plans to upgrade and replace aging infrastructure, and add technology to reduce the number and duration of power outages.
Specific Indiana plans include replacing more than 2,500 poles and 120 miles of power lines, and inspecting and maintaining trees and other vegetation along 4,000 line miles. Vegetation is the No. 1 cause of customer outages.
I&M will also continue to replace older-technology meters with new smart meters. Current plans are for all Michigan meters to be transitioned to AMI by the end of 2022 and all Indiana meters to be transitioned by mid-2024. Smart meters provide I&M insight into the distribution system to detect any issues or outages on the system and respond in a more efficient manner.
The smart meters also enable customers to gain more control over their energy use by using online tools to monitor their energy usage. Among other advantages, customers no longer need to wait for a technician to come to their home or business to start or stop service. With smart meters, remote connect/disconnect of power is possible in a few hours or less.
I&M’s technology additions include more tools to enhance the reliability of the energy delivery system. More “self-healing” grid technology will be installed to detect power outages and automatically re-route electricity to customers, enabling I&M to respond quicker if an outage occurs and detect potential safety risks.
More Clean Energy
The plan also supports I&M’s continued transition to more clean energy sources by removing generation costs associated with Rockport Plant Unit 2 – half of I&M’s coal-fired generating capacity – from customer rates. I&M is already a leader in green energy. I&M’s nuclear, solar, wind and hydro generation resulted in more than 80% of the energy I&M generated in 2021 being emission-free.
I&M expects to issue a request for proposals (RFP) in March seeking approximately 800 megawatts (MW) of wind generation and approximately 500 MW of solar generation. The new generation is part of I&M’s plan to add 2,100 MW of wind and solar by 2028.
I&M, Stakeholders Agree to Terms
I&M worked with nine groups representing various consumer interests to reach the settlement agreement in the rate review. In addition to I&M and the OUCC, other groups approving the settlement agreement were: I&M Industrial Group; Citizens Action Coalition of Indiana, Inc. (“CAC”); the City of Auburn Electric Department; the City of Muncie; Joint Municipals (collectively the City of Fort Wayne, the City of Marion, Marion Municipal Utilities and the City of South Bend); the Kroger Company; Wabash Valley Power Association; and Walmart Inc.
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Indiana Michigan Power (I&M) is headquartered in Fort Wayne, and its approximately 2,100 employees serve more than 600,000 customers. More than 80% of its energy delivered in 2021 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 2,620 MW of coal-fueled generation in Indiana.
American Electric Power, based in Columbus, Ohio, is powering a cleaner, brighter energy future for its customers and communities. AEP’s approximately 16,700 employees operate and maintain the nation’s largest electricity transmission system and more than 224,000 miles of distribution lines to safely deliver reliable and affordable power to 5.5 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 6,100 megawatts of renewable energy. The company’s plans include growing its renewable 2 generation portfolio to approximately 50% of total capacity by 2030. AEP is on track to reach an 80% reduction in carbon dioxide emissions from 2000 levels by 2030 and has committed to achieving net zero by 2050. 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.
MEDIA CONTACT:
Tracy Warner
Communications Manager
260-479-9484
tkwarner@aep.com