We helped cut AEP's request for 20% rate increase down to a 6.5% rate increase and to guarantee a minimum of $2.35 for an energy efficiency program for AEP customers in settlement negotiations!
The settlement is pending before the Utility Regulatory Commission Commission, and we hope to have a decision by the end of January. We believe that the settlement negotiations yielded a much better result than would have been the case if AEP's request had been left up to the sole discretion of the Commission.

Come to the Indiana Utility Regulatory Commission field hearing about the AEP Rate Increase!

AEP Demands Unjustifiable 20% Rate Increase on Residential Ratepayers in Indiana!
American Electric Power (Indiana Michigan Power Co. in Indiana) has filed for an unjustifiable rate increase with the Indiana Utility Regulatory Commission. CAC has intervened in the case.

AEP wants to:

• Raise your residential rates over 20%;
• Keep half the profits from “market” sales of power from generating plants included in your rates;
• Have new automatic rate adjustments or “trackers” to make you pay for new discretionary investments in transmission and distribution lines, new employees, and other expenses with less oversight.

Make sure your voice is heard!

AEP’s Scheme for Excessive Rate Increase

First Step in the AEP Rate Case Scheme: Boosting Stockholder Value at Ratepayers’ Expense
Currently, AEP gets $96 million per year in off system sales of energy that comes from power plants paid for by customers of Indiana Michigan Power (“I&M”). Rather than allowing all of those sales to benefit the customers who are paying for the power plants, AEP wants to keep half, or $48 million for its shareholders. That’s more than the $47.8 million increase in base rates it has requested!

Second Step in the AEP Rate Case Scheme: Enron-Style Accounting
AEP artificially inflated its rate request by pretending its investments in currently operating power plants and other facilities cost more than they actually do. For example, I&M wants to:

• Raise rates over 20% when its net investment in Indiana plant and facilities increased just $41 million, or only 2.3% more that it was in 1991;
• Treat a prepayment of pension expenses as if it is a capital investment and include it in rate base — costing ratepayers over $6 million per year;
• Charge ratepayers for environmental controls that have not been approved by the IURC as prudent or necessary;
• Force Indiana ratepayers to pay for transmission facilities that mostly benefit utilities and customers in other states; and,
• Make customers pay for “lost revenues” it predicts will result from energy efficiency programs that it has never tried in Indiana and has no Indiana data to support!

Third Step in the AEP Business Scheme: Automatic Rate Increases
AEP is requesting new automatic rate adjustments, or “trackers,” for certain, mostly discretionary expenses. Under traditional regulation, when a utility wants to raise rates they have to file for a rate increase, open up its books, and show both where their costs have gone up and where they have gone down. With trackers, the utility “tracks” or flows through cost increases with less scrutiny and in between rate cases, allowing it to charge for increases in some areas without lower rates to reflect lower costs in other areas. The trackers account for nearly 32% of the proposed rate increase, and could lead to even more increases every six months.

Take Action!!!

If you are a resident of South Bend or Fort Wayne, please write to your mayor!
The cities of South Bend and Fort Wayne have intervened in this rate case. Let them know that economic development starts with the ratepayers. Demand that they work not only to protect the city, but also to protect the residents of the city. If ratepayers are forced to pay 20% more for electricity, that’s less money that can be spent in the local economy, which is the opposite of economic development!

Write to the Office of Utility Consumer Counselor! Tell them to Say NO to AEP’s 20.5% rate increase and:

• Make AEP credit 100% of off-system sales to ratepayers;
• Deny AEP’s request for additional trackers with less scrutiny of transmission and distribution system investments; and,
• Make AEP fund an independently managed and verified energy efficiency program.
• Ask that your letter be included in the testimony that the OUCC files with the Regulatory Commission.