|
AEP-CSW merger settlement could predetermine ratemaking In the Matter of the Investigation on the Commission’s Own Motion into any and all Matters Relating to the Merger of American Electric Power, Inc. and Central and South West Corporation, Cause No. 41210 On June 29, 1998, the Indiana Utility Regulatory Commission (IURC) initiated an investigation into the proposed merger between American Electric Power, Inc. (AEP), the parent holding company of Indiana Michigan Power Company (I&M), and Central and South West Corporation (CSW). AEP and I&M sought an agreement from the IURC that it would not oppose the proposed merger before the Federal Energy Regulatory Commission and the Securities and Exchange Commission. I&M agreed to make certain rate reductions and other concessions in order to obtain that agreement from the IURC. When a settlement agreement was ultimately reached, however, it also included a regulatory plan that predetermined future ratemaking treatment of I&M following the merger and provided additional profits to the shareholders of AEP. Neither Citizens Action Coalition nor the Office of Utility Consumer Counselor joined in the settlement agreement reached between the AEP/I&M and the IURC’s staff negotiating team. CAC opposed the settlement agreement because (1) the IURC lacked jurisdiction to approve the regulatory plan in the settlement agreement; (2) the IURC failed to give proper legal notice to I&M’s customers that their future rates would be determined in that proceeding; and (3) the regulatory plan was contrary to law because it gave shareholders of the utility an additional, hidden return on capital at the expense of the ratepayers. In spite of CAC’s objections, the IURC approved the settlement agreement. CAC has appealed the IURC’s Order approving the settlement agreement. Briefing before the Indiana Court of Appeals is now complete. Although CAC has requested oral argument in this appeal, the Indiana Court of Appeals has not yet decided whether it will hear oral argument. The AEP/CSW merger was completed June 15, 2000. CAC expects a decision in this appeal later this year. -R. Wright
| CAC Home Page
| Table of Contents | Issues Index |
|