2/14/2018
Settlement Reduces Proposed Rates for I&M's Building the Future Plan

FORT WAYNE, Ind. – Indiana Michigan Power (I&M), an American Electric Power (NYSE: AEP) company, and a number of stakeholders representing varied customer interests have submitted a settlement agreement that significantly reduces I&M’s requested rates for its Building the Future proposal.

The reduction in the proposed rates largely reflects I&M’s new ability to pass savings from the federal Tax Cuts and Jobs Act to customers. Additional savings were achieved through compromises with stakeholders regarding recovery of costs.

As part of the agreement, which is subject to approval by the Indiana Utility Regulatory Commission (IURC), I&M will establish new programs to help low-income customers and offer economic development incentives directly to communities.

I&M’s planned infrastructure investments designed to enhance customer reliability and service by reducing outages remain included in the rate review as the case moves forward.

As a result of the proposed settlement that included the Office of Utility Consumer Counselor and 14 additional entities, I&M’s proposed overall request is for an increase of $96.8 million, or 7.26 percent. The monthly increase for a typical residential customer who uses 1,000 kilowatt hours would be $9.41, or less than 32 cents per day. That includes the proposed customer charge portion of the bill, which would be $10.50 per month, second lowest among Indiana’s major electric utilities.

“I&M is committed to serving our customers in the ways they want to be served, and we are pleased to significantly limit the increase in our proposed rates for customers while still preserving our plans to reduce outages by enhancing infrastructure and to gain more flexibility in transitioning our generation sources to a more diverse energy mix ,” said Toby Thomas, President and Chief Operating Officer of I&M. “We understand the impact of rates on our low-income customers, and I am pleased our revised plan includes additional assistance for them. To help build the communities we serve, the settlement also includes new economic development incentives.”

Several key aspects of I&M’s Building the Future plan remain included in the rate review. The plan would:

• Diminish I&M’s No. 1 source of customer outages – trees and other vegetation – by accelerating trimming and clearing near power lines.

• Modernize I&M’s aging energy delivery system, using expanded technology as well as stronger poles and wires to make the system more resilient and reduce the impact of weather-related outages.

• Facilitate the transition to more diverse sources of energy by adjusting the depreciation of Unit 1 of its Rockport plant to prepare for its eventual retirement.

• Offer a new renewable energy program in which customers can choose to attribute a specified percentage of their energy use – from 10 percent to 100 percent – to solar and wind energy.

• Eliminate the fee for charging a bill payment on a credit card. The settlement agreement also includes programs for I&M to invest in the communities we serve beyond our infrastructure plans.

I&M agreed as part of the settlement to provide a total of $950,000 to assist low-income customers, including:

• Provide $250,000 to the Indiana Community Action Association for a new program to help qualified low-income customers with their winter electric bill.

• Provide an additional $150,000 to the Community Action organization for home weatherization, which reduces energy use. The association includes Brightpoint in northeast Indiana; REAL Services in north central Indiana; and, in central Indiana, the Interlocal Community Action Program, JobSource, and Community and Family Services.

• Establish a two-year pilot program, allocating up to $500,000 to help low-income customers catch up on their electric bill.

• Establish the Neighbor-to-Neighbor program to give residential customers the opportunity to voluntarily contribute to a fund that will help low-income customers with their bills. I&M will launch the fund with $50,000 in seed money.

Recognizing the importance of economic development in the communities I&M serves, the company will create the $700,000 Economic Impact Grant Program to partner with communities and organizations to pursue qualified economic development projects.

As I&M implements these new low-income and economic development programs they will not be paid through this proposed customer rate increase.

As part of the agreement, I&M will also collaborate to increase the outreach of the company’s energy-saving weatherization and energy efficiency programs for low-income residents and to develop electric vehicle charging programs.

The proposed settlement must still be approved by the IURC. If approved, new rates would be phased in, becoming partially effective this July and fully effective early in 2019.

In addition to I&M and the Office of Utility Consumer Counselor, groups in the proposed settlement agreement are: Indiana Community Action Association; Indiana Coalition for Human Services; City of South Bend; Sierra Club, Hoosier Chapter; Citizens Action Coalition of Indiana; The Kroger Co.; Wal-Mart Stores East, LP; Sam's East, Inc.; City of Fort Wayne; 39 North Conservancy District; I&M Industrial Group; City of Marion; Marion Municipal Utilities; Muncie Sanitary District.

Customers can learn more about Building the Future and the regulatory rate review process at www.IndianaMichiganPower.com/BuildingTheFutureIndiana.

# # #

Indiana Michigan Power (I&M) is headquartered in Fort Wayne, and its 2,450 employees serve more than 589,000 customers. More than half of its generation is emission-free, including 2,160 MW of nuclear generation in Michigan, 450 MW of purchased wind generation from Indiana, 22 MW of hydro generation in both states and approximately 15 MW of large-scale solar generation in both states. The company’s generation portfolio also includes 2,600 MW of coal-fueled generation in Indiana.

American Electric Power is one of the largest electric utilities in the United States, delivering electricity and custom energy solutions to nearly 5.4 million customers in 11 states. AEP owns the nation’s largest electricity transmission system, a more than 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP also operates 224,000 miles of distribution lines. AEP ranks among the nation’s largest generators of electricity, owning approximately 26,000 megawatts of generating capacity in the U.S. AEP supplies 3,200 megawatts of renewable energy to customers. AEP’s utility units operate as 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 and east Texas). AEP’s headquarters are in Columbus, Ohio.

Brian Bergsma
Director of Communications and State Government Affairs
Indiana Michigan Power
(317) 670-3561
bebergsma@aep.com

Tracy Warner
Indiana Michigan Power Communications
(260) 408-3420
tkwarner@aep.com

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