I&M Rate Case Settlement Approved by the IURC (2018)
Citizens Action Coalition (CAC) along with our partners at the Indiana Coalition for Human Services (ICHS), Indiana Community Action Association (INCAA), and the Sierra Club Hoosier Chapter joined a settlement reached by all parties in the I&M base rate case. The Indiana Utility Regulatory Commission (IURC) approved the settlement on May 30, 2018.
The approved settlement will provide I&M with an overall revenue increase of $96.8 million, significantly less than what I&M was asking for I&M originally requested a $263 million increase in September 2017. Their request was adjusted to approximately $191.5 million in January 2018 following passage of the Federal Tax Cuts & Jobs Act. In addition to the significant reduction in the requested rate increase, the settlement reduced I&M’s return on equity (ROE), or profit, to 9.95%. By comparison, I&M’s current ROE is 10.2% and I&M was seeking to increase their ROE to 10.6% in this case.
CAC and our partners' top priority in the case was over I&M’s request to significantly increase the monthly fixed charge on residential customers from the existing level of $7.30 to $18.00. The settlement established a monthly charge of $10.50 for most residential customers, well below what the company was seeking.
Additionally, CAC and our partners raised concerns over the day to day struggles faced by fixed- and low-income households, which include challenges with affording their monthly electric bills. These concerns were echoed and reinforced by over 150 I&M customers who provided oral or written testimony before the IURC at three field hearings held in Ft. Wayne, Muncie, and South Bend, as well as in over 2,700 written comments filed with the Office of Utility Consumer Counselor (OUCC).
The vast amount of public comments filed in the case, as well as the compelling public testimony provided at all three of the field hearings played a huge role in securing this settlement. The Ft. Wayne Journal-Gazette wrote a well-publicized editorial speaking to the influence that public participation had in the outcome of the case: http://www.journalgazette.net/opinion/editorials/20180222/voice-of-the-people
In addition to the reduction in the monthly fixed charge and the overall rate increase, terms were secured in the settlement to begin addressing the payment difficulties experienced by low-income customers. These terms include:
- A two-year Low Income Arrearage Forgiveness Pilot Program will be established that will provide an opportunity for low income customers to catch up on their electric bills.
- A two-year Neighbor to Neighbor pilot program will be established under which I&M’s customers will be given an opportunity to voluntarily contribute on their electric bills to a fund that will be used to assist eligible low-income customers with their regular monthly electric bills. I&M will contribute $50,000 in seed money to help kick start the Neighbor to Neighbor Pilot Program.
- A two-year pilot program will be established, under which I&M will provide $250,000 in funding to assist low income customers in I&M’s Indiana service area in paying electricity bills, primarily during the winter heating season.
- I&M will provide $150,000 to facilitate low-income weatherization in I&M’s Indiana service territory performed by the community action agencies.