The Michigan Public Service Commission (MPSC) on Thursday approved a settlement agreement that establishes new rates in support of Indiana Michigan Power’s Michigan Plan, originally submitted last June.

The agreement was reached between Indiana Michigan Power (I&M) and parties representing the interests of consumers, environmentalists, businesses and the state of Michigan. MPSC approval provides I&M the opportunity to make significant investments in energy generation, transmission and distribution to strengthen and modernize the electric grid, improve reliability and better serve customers.

“The agreement was the result of discussions between all the parties in the pending rate review to establish rates that balance the need for I&M to provide safe, reliable power while reducing the amount of the initial proposal,” said Toby Thomas, I&M President and Chief Operating Officer. “We are strengthening our infrastructure, modernizing the southwest Michigan electric grid and supporting our continued efforts to transition to more diverse generation options as we focus on working with our customers and keeping the lights on 24/7 for the homes and businesses we serve.”

The MPSC authorized a rate increase of $36.4 million in Michigan, about 37% less than originally requested. New rates supporting the Michigan Plan will take effect February 1. Residential customers who use 1,000 kilowatt hours (kWh) of electricity per month will see their monthly bills rise about $24 to $156.93, an increase of 80 cents per day. In the months of February through May, part of the increase will be credited back to customers and designated on bills as “phase-in credit.”

The MPSC also authorized rates that will enable I&M to assist customers by eliminating the monthly residential service charge of $7.25 for qualifying low-income customers. I&M will also decrease rates for customers ages 65 and older who use relatively low amounts of electricity. For example, senior citizens using 250 kWh will see their bill drop 26 percent. Those using 500 kWh will see a reduction of 7%.

In addition, I&M will not file for a rate review with the MPSC before 2022, and will not change base rates until 2023 at the earliest. (Rates will fluctuate before then due to factors such as fuel prices, transmission and other tracked variables.) 

I&M intends to invest millions of dollars to enhance reliability with its Michigan Plan, including:

• Supporting the continued operation of I&M’s Cook Nuclear Plant, which generates enough emission-free energy to power more than 1.5 million homes.
• Proactively trimming trees in a manner that respects the environment while addressing the No. 1 cause of service interruptions.

• Strategically and responsibly prioritizing infrastructure upgrades such as new poles and wires, and adding technology that makes the electric grid powering southwest Michigan smarter and stronger.

The agreement also establishes the IM Plugged-In program to expand incentives for electric-car charging beyond houses to apartment buildings and commercial fleet vehicles. The approved plan opens the door for more publicly accessible charging stations at businesses and along Michigan’s interstates.

The agreement involves I&M; the Michigan Public Service Commission Staff; Michigan Attorney General Dana Nessel; the Association of Businesses Advocating Tariff Equity; Citizens Against Rate Excess; Energy Michigan, Inc.; the Environmental Law & Policy Center; the Ecology Center; the Solar Energy Industries Association; Vote Solar; the Sierra Club; the City of Auburn, Ind.; the Great Lakes Renewable Energy Association; and the Residential Consumer Group.

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Indiana Michigan Power (I&M) is headquartered in Fort Wayne, and its 2,370 employees serve more than 597,000 customers. More than half of its generation is emission-free, including 2,278 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, based in Columbus, Ohio, is focused on building a smarter energy infrastructure and delivering new technologies and custom energy solutions to our customers. AEP’s more than 17,000 employees operate and maintain the nation’s largest electricity transmission system and more than 219,000 miles of distribution lines to efficiently deliver safe, reliable power to nearly 5.4 million regulated customers in 11 states. AEP also is one of the nation’s largest electricity producers with approximately 32,000 megawatts of diverse generating capacity, including 4,300 megawatts of renewable energy. 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 and east Texas). AEP also owns AEP Energy, AEP Energy Partners, AEP OnSite Partners and AEP Renewables, which provide innovative competitive energy solutions nationwide.