IPL wants a 51% increase in base rates. Tell them NO!
UPDATE: IPL increase in fixed charge and rates approved. IURC rejects all of CAC’s recommendations.
On March 16th, the Indiana Utility Regulatory Commission (IURC) approved a significant increase in the monthly bills of electric customers of Indianapolis Power & Light (IPL). The IURC’s final order authorized IPL to increase rates by $29.6M per year. However, on March 23rd, the IURC issued a correction to the final order and authorized IPL to increase their rates by an additional $1.2M, raising the total annual increase in revenues to a little over $30.8M.
How much monthly bills of residential customers will actually increase will be unknown until IPL files what is known as a compliance filing, which will allocate the $30.8M increase in annual revenues to the numerous rate classes.
In addition to the $30.8M increase in rates, the IURC also approved IPL’s request to increase the monthly fixed customer charge of residential customers, which is the amount customers pay regardless of how much energy they consume.
In December 2014, IPL filed their first base rate case (Cause No. 44576) before the Indiana Utility Regulatory Commission (IURC) since April of 1994. IPL is asking the IURC for permission to raise their annual operating revenues by $67.8 million, significantly increase the amount you pay regardless of how much energy you use, and raise other fees by as much as 220%.
Charging more for using less has a disproportionate impact on low and fixed income households (seniors, disabled, and other vulnerable populations) AND penalizes households that are conserving energy and making their homes more energy efficient.
Specifically, IPL wants to:
- Increase the monthly fixed cost on most customers to $17.00, a 55% increase. Low usage customers (low and fixed income households, most notably senior citizens) who use 325 kilowatt hours or less per month will see their monthly fixed cost increase by 68% to $11.25!
- Increase per kilowatt hour charges for the first 500 kWh used each month by 44% and every kWh used thereafter by 66%.
- Increase per kilowatt hour charges (over 1,000 kWh) for households that are electrically heated or have electric hot water heaters by 90%.
This would mean the residential base rate of $66.50 (for a household using 1,000 kWh per month) approved in IPL’s last base rate case would increase to $100.47 before taxes (see chart below). A 51% INCREASE in base rates!
In the last 10 years despite not filing a base rate case, IPL’s monthly bills have increased nearly 44% for the average customer using 1,000 kilowatt hours per month.
During that same time period, the median annual income in Indianapolis has declined nearly 12%, or almost $7,000, while households struggle with significant increases in the cost of energy, health care, food, and other necessities.
This increase in monthly bills is being caused by IPL’s abuse of adjustable rate mechanisms, more commonly referred to as “trackers” or “riders”. In this case, not only is IPL asking the IURC to let them keep all of their existing trackers, they want the IURC to approve three new trackers which will lead to even more frequent bill increases (see chart below).
Moreover, this 51% increase in their residential base rate DOES NOT INCLUDE $1.137 billion in increases that IPL has already received approval for to build a new natural gas plant, convert two coal-fired units to natural gas, and install pollution control on their antiquated and dirty coal plants.
But wait, there’s more!
In addition to the $1.137 billion that is not included in this rate increase, this case also DOES NOT INCLUDE ANOTHER $332 million that IPL is currently seeking approval for before the IURC in Cause No. 44540 to install new wastewater systems at their power plants and convert Harding St. 7 from coal to natural gas.
That’s nearly $1.5 billion in approved or pending increases that IPL wants YOU to pay above and beyond the 51% rate increase they’re asking for in this case.