Settlement with IPL results in NO INCREASE in monthly fixed charge for most customers!
10/31/18 Update: The IURC approved the settlement with IPL reached by CAC and our partner organizations.
The settlement will leave the monthly fixed charge at $17.00 for most residential customers, well below what the company was seeking. For customers whose monthly usage is less than 325 kWh, the existing monthly fixed charge of $11.25 will be slightly increased to $12.50, if approved by the IURC.
Several terms of the settlement also include pilot programs to begin helping IPL low-income customers who struggle to pay their monthly electric bills, including $150,000 to weatherize homes and make them more efficient.
For more info on the settlement go to https://www.citact.org/energy-policy-utility-rates-and-regulation-ipl/ipl-wants-25-increase-base-rates-tell-them-no/news/advocates-join-IPL-settlement
To read the IURC press release regarding the settlement in this case, visit https://www.in.gov/iurc/files/10312018_IURC%20Issues%20Order%20in%20IPL%20Rate%20Case.pdf
In December 2017, IPL filed a new base rate case (Cause No. 45029) before the Indiana Utility Regulatory Commission (IURC), despite the fact that they raised base rates less than two years ago. IPL was asking the IURC for permission to raise their annual operating revenues by $95 million, and significantly increase your monthly fixed charge (the amount you pay regardless of how much energy you use). Increased fixed charges have a disproportionate impact on low and fixed income households (seniors, disabled, and other vulnerable populations) AND penalize households that are conserving energy and making their homes more energy efficient.
Specifically, IPL wanted to:
- Increase the monthly fixed charge on most customers to $27 per month, a 59% increase. This would give IPL the highest monthly fixed charge of any investor-owned utility in Indiana, by far.
- Low usage customers (primarily 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 42% to $16!
- Increase per kilowatt hour charges for the first 500 kWh used each month by 15% and every kWh used thereafter by 21%.
- Increase per kilowatt hour charges (over 1,000 kWh) for households that are electrically heated or have electric hot water heaters by 25%.
This would have meant the residential base rate of $97.42 (for a household using 1,000 kWh per month) approved in IPL’s last base rate case would increase to $121.85 before taxes, trackers, and other fees - a 25% INCREASE in base rates!
In the last 10 years, IPL’s monthly bills have increased 45% for the average customer using 1,000 kilowatt hours per month. During that same time period, the median annual income (adjusted for inflation) in Indianapolis has declined nearly 8%, or almost $5,000. Wages are stagnant, while significant increases in the cost of energy, food, health care, utilities, and other necessities are forcing households to make tough decisions on a daily basis. Meanwhile, IPL’s parent company, AES, continues to report strong financial performance and recently announced an increase in dividends, or the amount they pay shareholders out of its profits. IPL and AES are financially healthy.
It’s ratepayers that need relief, not IPL.
To their credit, IPL does acknowledge in their testimony that many of their customers are struggling. Former IPL President and CEO Rafael Sanchez states, “We understand that a segment of our customers face economic challenges and have difficulty paying their bills.” As a result, IPL is proposing a voluntary program where customers can “roundup” their monthly bills, with the proceeds going towards assisting low-income customers. CAC has long advocated for programs to ensure that all Hoosiers have access to affordable essential human services, including monthly electric bills. Indeed, CAC proposed a low-income assistance program in IPL’s previous rate case, which IPL opposed. However, we applaud IPL for finally recognizing the payment difficulties faced by many of their customers, and strongly support their proposal to offer some relief to vulnerable households in an effort to ensure access to service and make monthly bills more affordable for the least among us.
IPL Bill Comparison for the average customer using 1,000 kilowatt hours of electricity per month
|Current Bill||Proposed Bill|
|Charges & Rates||Total Bill||Charges & Rates||Total Bill|
|Monthly Fixed Charge:||$17.00||$17.00||$27.00||$27.00|
|0-500 kWh rate:||$0.091||$45.44||$0.105||$52.66|
|Each kWh over 500:||$0.070||$34.98||$0.084||$42.19|
Trackers: the other 15% of your IPL bill not included in "base rates"
These trackers are currently included in your IPL bill, added to the average bill you see above. IPL wants to include most of the amounts they’re currently collecting through trackers into “base rates” going forward. Then they want to file for new amounts to be collected through these trackers shortly after the IURC approves the new base rates. How much the trackers will be on your monthly bill is unknown to everyone but IPL.
|Current Trackers||Proposed Trackers|
|Charges & Rates (per kWh)||Total Bill||Charges & Rates (per kWh)||Total Bill|
|Rider No. 6 - Fuel Adjustment Clause ("FAC" - filed quarterly)||$0.002504||$2.50||?||?|
|Rider No. 20 - Environmental Compliance Cost Recovery Adjustment ("ECCRA" - filed semi-annually)||$0.00911||$9.11||?||?|
|Rider No. 22 - Demand Side Management Adjustment,("DSMA" - filed semi-annually)||$0.003803||$3.80||?||?|
|Proposed Rider No. 24 - Capacity Cost Recovery Adjustment,("CAP" - would be subject to annual adjustments in a future docket)||$0.000562||$0.56||?||?|
|Proposed Rider No. 25 - Off-System Sales Margin Sharing,("OSS" - would be subject to annual adjustments in a future docket)||$0.000235||$0.24||?||?|
|Proposed Rider No. 26 -,Regional Transmission Organization Adjustment ("RTO" - would be subject to annual adjustments in a future docket)||$0.001638||$1.64||?||?|
|Total trackers on current bills:||$17.85||?|
|Total bill with base rates and trackers:||$115.27||$121.85 + ?|
Read the Fact Sheet
Thank you to everyone who came to the field hearings and voiced their opinions on this rate case. You can also send your comments to the OUCC and make your voice heard! Make sure to reference Cause Number 45029 in your comments. Indiana Office of Utility Consumer Counselor Tell the OUCC and the IURC Regulators:
Attn: Bill Fine
115 W. Washington St. Suite 1500S
Indianapolis, IN 46204
(888) 441-2494 phone
Thank you to everyone who came to the field hearings and voiced their opinions on this rate case.
You can also send your comments to the OUCC and make your voice heard! Make sure to reference Cause Number 45029 in your comments.
Indiana Office of Utility Consumer Counselor
Tell the OUCC and the IURC Regulators: