FOR IMMEDIATE RELEASE: July 28, 2015

Expert Testimony: Need for Assistance Program is Critical 

INDIANAPOLIS – A broad and diverse coalition of consumer, human service, and social justice organizations filed testimony yesterday in the rate case of Indianapolis Power & Light (IPL), currently pending before the Indiana Utility Regulatory Commission (IURC), requesting that the IURC reject IPL’s proposed increase in the fixed monthly charge and asking that the IURC order IPL to create a low-income rate class to assist vulnerable Hoosier ratepayers in managing their monthly bills.

The coalition of organizations include Citizens Action Coalition of IN (CAC), Indiana Association for Community Economic Development (IACED), Indiana Coalition for Human Services (ICHS), Indiana Community Action Association (INCAA), Indiana State Conference of the National Association for the Advancement of Colored People, Inc. (IN-NAACP), and National Association of Social Workers Indiana Chapter (NASW-IN).

Expert testimony was filed on behalf of the organizations by Mr. John Howat, Senior Policy Analyst for the National Consumer Law Center, and Mr. Derek Thomas, Senior Policy Analyst for the Indiana Institute for Working Families, a program of INCAA. The testimony clearly displays that vulnerable Hoosier households living at or below 150% of the Federal Poverty level have a disproportionate and extremely high energy burden, and as a result are experiencing serious difficulties in managing and paying their monthly IPL bills and more importantly, keeping their households connected.  

“Reliable electricity service is a necessity of life.  Without electricity, residents cannot participate effectively in present-day society or be secure from threats to health and safety,” stated Mr. Howat. “All IPL customers, including those with low incomes, should have access to reliable and secure sources of electricity.”

Mr. Howat’s examination of the data reveals that households headed by a person over the age of 65 and households headed by an African American person use less electricity on a monthly basis than the average household. Therefore, IPL’s proposed increase in the fixed monthly charge and proposed continuation of a declining block rate structure will disproportionately harm and exacerbate pre-existing electric utility affordability and home energy security problems faced by these households, as well as other low income households, by charging customers more per month regardless of the amount of electricity consumed.  

Additionally, Mr. Howat explains that low-income residential customers face arrearage rates and balances that are much higher than those of general residential customers.  As a result, low-income households in IPL’s service territory receive disconnection notices and experience loss of electricity service at significantly higher rates than median and higher income households. 

“These affordability problems constitute a real threat to the home energy security of IPL’s low-income customers and call for program and policy interventions to mitigate that threat,” Mr. Howat concluded. 

In his testimony, Mr. Thomas shows that despite an improving unemployment rate, the number of impoverished and low-income Hoosiers continues to rise, median household income is still declining and income inequality in Indiana is growing.  Mr. Thomas points out that today, a record-breaking 1,015,127 Hoosiers are living in poverty.

“What is more concerning is that the rate of impoverished Hoosiers, impoverished Hoosier children and low-income Hoosiers has increased at rates greater than all neighboring states and the U.S. average,” said Mr. Thomas. “While poverty rates in peer states are declining, Indiana’s rate is still increasing.” 

“There’s been a lot of talk lately in Indiana regarding the affordability of home energy.  It’s long overdue that we quit using that word merely as political rhetoric and that we as a community act on those words and ensure that the most vulnerable among us retain access to basic, necessary electric service,” added Kerwin Olson, Executive Director of CAC.

Citizens Energy Group, the natural gas and water utility for Indianapolis and Marion County, recently proposed a similar program for their low-income water customers in their new rate increase request also pending before the IURC. Additionally, Citizens Energy Group has had a discount program in place for their low-income gas customers for years. 

“We encourage IPL to follow the lead of their partner utility here in Indianapolis and keep the financial well-being of their low-income customers in mind,” added Mr. Olson. 

Denise Abdul-Rahman, Chair of Indiana’s NAACP Environmental Climate Justice, added “It is unfair for communities of concern to continue to host and bear the burden of an antiquated infrastructure and fossil fuel energy source. Now they are subjected to the possibility of paying more, when they are already surviving by employing energy efficiency tactics out of necessity. "

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Copies of the testimony of John Howat and Derek Thomas are available upon request.