I&M gets partial OK to raise electric rates
ELKHART — Indiana Michigan Power will get to raise its electric rates, but only half as much as they requested in 2011, the Indiana Utility Regulatory Commission ruled Wednesday, Feb. 13.
The actual increase to customers won’t be clear until I&M parent AEP files a response with the commission in about a month.
The IURC approved rate hikes which would allow I&M to raise an additional $85 million a year. The company had sought permission to raise $174.3 million a year, according to the commission.
The company’s original request drew fire from the cities of Fort Wayne and South Bend, and companies like Steel Dynamics Inc. and Kroger weighed in on the request for the rate hike.
During public hearings customers from around the area weighed in and others sent email messages opposing the hikes, which proposed a roughly 22-percent increase in electric rates for residential customers.
I&M cited increased federal regulation, costs for their generating facilities as well as pension costs and insurance costs for its employees as factors in needing more income.
“While I&M continues to work hard to control our operating expenses, I&M is faced with the cost of environmental mandates and other challenges,” said Paul Chodak III, I&M president, in testimony asking for the rate hike. “The company’s long-term effort to tighten our belt significantly contributes to keeping our rates low in the face of such environmental mandates and other challenges, but we are out of notches,” he said. He noted that I&M rates are some of the lowest electric rates in the state, and even with the full rate hike the company requested, the rate would still be below the average of the rate for electricity from investor-owned utilities in the state.
The IURC expects I&M to file its revised tariffs and its revised cost-of-service study showing how costs will be allocated between customer classes like residential, commercial and industrial, within 30 days.