Key Programs Approved, Rate Request Cut by Nearly 50%

FORT WAYNE, Ind., December 21, 2023 – Indiana Michigan Power (I&M), an American Electric Power (Nasdaq: AEP) company, and organizations representing I&M customers have reached agreement on details of the Powering Our Future plan that will further enhance reliability and better serve customers while significantly reducing the initial proposed rates. 

The settlement with the Indiana Office of Utility Consumer Counselor (OUCC) and other organizations and municipalities is pending before the Indiana Utility Regulatory Commission (IURC). Under the settlement, I&M’s overall rate request of $116.4 million was reduced to $56.9 million plus $4.9 million in rider revenues, totaling $61.8 million.

The increase will occur in two phases. In the first phase, a typical residential customer using 1,000 kilowatt hours of electricity would pay $166.36 per month, an increase of $4.20, effective in mid-2024. In the second phase, a typical resident would pay an additional $4.27 beginning in January 2025, resulting in a bill of $170.63 and a total increase of 5.2%. 

I&M also agreed to:

• Donate $400,000 to the Indiana Community Action Association to help low-income customers. The donation will not be included in customer rates.
• Limit which days service can be disconnected for nonpayment.
• The fixed service charge for residential customers will be $15 per month.

“I&M is pleased to reach an agreement that will serve our customers well with enhanced reliability and updated technologies while further controlling costs,” said Steve Baker, I&M president and chief operating officer. “We appreciate working with the organizations that are party to the rate review to reach a middle ground that will enable I&M to better serve customers’ energy needs.” 

The agreement will enable I&M to continue investments for enhancing reliability by upgrading aging infrastructure in Indiana. As part of I&M’s Powering Our Future plan, I&M will invest nearly $550 million in reliability and grid resiliency improvements to the electric distribution system. The settlement also provides I&M with the ability to study the details of extending the life of the carbon-emission-free Cook Nuclear Plant in Bridgman, Mich., by an additional 20 years.

Enhancing reliability

Under the settlement agreement, I&M will continue to enhance reliability of service with technology and updates to aging infrastructure. Specific Indiana plans include:

• Replacing more than 2,800 poles and replacing 240 miles of power lines.
• Upgrading 15 substations.
• Inspecting and maintaining trees and other vegetation along more than 5,000 line miles. Vegetation is the No. 1 cause of customer outages.
• Installing more “self-healing” grid technology to detect power outages and automatically re-route electricity to customers.

Customer Information System

I&M’s Powering Our Future plan includes a multi-year project to implement new customer information system that 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.

Cook Nuclear Plant

Under the settlement, I&M can spend up to $5 million to take the initial step in determining whether to seek approval for a 20-year license extension of the Cook Nuclear Plant, which is capable of powering more than 1.5 million typical homes. Its two units that separately generate power 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.

The possibility of a Cook license extension will be included in I&M’s 2024 Integrated Resource Plan, which will examine how I&M will meet customers’ future energy needs.

New Payment Option

The settlement agreement approves a pilot program that allows a limited number of customers to pre-pay their electric bills, much like pre-paid cell phones. Up to 2,300 customers will be able to participate in PowerPay, a program that will offer 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 is designed to help customers avoid larger-than-expected bills by receiving daily updates on usage and related costs.

I&M has agreed to meet with the OUCC, a government agency, and the Citizens Action Coalition (CAC), a customer advocacy organization, before launching the pilot and again a year after the program launches to review details. The plan could be expanded to more customers after the two-year pilot concludes.

Other Settlement Terms

• I&M agreed no customers will be disconnected for nonpayment on Fridays, Saturdays, Sundays and key holidays.
• I&M has agreed to invite the CAC, City of Fort Wayne, OUCC, and any other interested stakeholder to participate in a stakeholder process in advance of the I&M’s future Electric Vehicle filing to accept feedback on what is important to different stakeholders.
• I&M has agreed to work with the CAC and other interested stakeholders on potential updates to I&M’s interconnection procedures in Indiana to facilitate distributed generation such as solar panels and wind turbines while ensuring the safety and reliability of the energy distribution system and compliance with Indiana law and regulation.
• I&M agreed that if the utility moves forward with an innovative broadband program in Delaware and Grant counties, the costs of the program will not be included in customer rates. I&M is considering offering Internet service providers the ability to use I&M’s broadband infrastructure needed for electrical equipment to greatly expand internet service in the two counties.

I&M, Stakeholders Agree to Terms

I&M worked with organizations representing various consumer interests to reach the settlement agreement in the current rate review. In addition to I&M and the Indiana OUCC, other groups supporting the settlement agreement were:

Citizens Action Coalition of Indiana; Walmart Inc.; I&M Industrial Group; the City of Fort Wayne; the City of Marion and Marion Municipal Utilities; and Wabash Valley Power Association.

The IURC is expected to review the settlement agreement, with a final ruling expected in mid-2024.

#   #   #

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.

At American Electric Power, based in Columbus, Ohio, we understand that our customers and communities depend on safe, reliable and affordable power. Our nearly 17,000 employees operate and maintain more than 40,000 miles of transmission lines, the nation's largest electric transmission system, and more than 225,000 miles of distribution lines to deliver power to 5.6 million customers in 11 states. AEP also is one of the nation's largest electricity producers with nearly 29,000 megawatts of diverse generating capacity, including approximately 6,100 megawatts of renewable energy. AEP is investing $43 billion over the next five years to make the electric grid cleaner and more reliable. We are on track to reach an 80% reduction in carbon dioxide emissions from 2005 levels by 2030 and have a goal to achieve net zero by 2045. AEP is recognized consistently for its focus on sustainability, community engagement 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 CONTACTS:

Stephanny Smith
260-409-4292
slsmith2@aep.com

Tracy Warner
260-408-3420
tkwarner@aep.com