Residential customers of I&M to see 5 percent base rate reduction as result of new settlement
Owing to a rate settlement between Indiana Michigan Power (I&M) and nine stakeholder groups, residential customers of the cross-state utility stand to see base rates cut by approximately 5 percent.
The new agreement, filed with the Indiana Utility Regulatory Commission (IURC) earlier this week, would roll out these adjusted rates over two phases. The first, of just 1 percent, would occur in May 2022, with the larger decrease to follow in January 2023.
“Indiana Michigan Power constantly strives to serve customers with safe, reliable, and affordable power,” Steve Baker, president and COO of I&M, said. “I&M’s plan will pave the way for I&M’s transition to renewable energy, enhance reliability and make our service more affordable. We are pleased to collaborate with the Indiana Office of Utility Consumer Counselor (OUCC) and a number of other groups to reach an agreement that best serves customers by lowering their base rates while supporting I&M’s program to sustain and enhance service.”
Despite this, the rate arrangement allows for I&M to increase investments for reliability and infrastructure upgrades to more than $350 million, thanks to offsets brought about by the impending removal of costs affiliated with its Rockport Unit 2 facility. Those added costs will subside beginning January 2023, when the coal-fueled generation plant is stricken from customer rates.
The more than $350 million pledged for investment will go toward replacing more than 2,500 power poles and 120 miles of power lines in Indiana, upgrading 16 substations, and inspecting and maintaining vegetation growth. At the same time, I&M will continue replacing old meters with new smart meters to enhance its ability to detect issues or outages and quickly respond while giving customers more oversight of their energy usage. Artificial intelligence, robotic process automation, and other tools will also increase deployment to further improve the grid’s reliability and give it more of a self-healing aspect.
Further, the agreement represents additional steps on a transition toward renewable energy. I&M plans to remove half of its coal-fired generating capacity from customer rates and continue to add renewable energy in the coming months.
All of this is, of course, subject to approval by the IURC, which will conduct a hearing next month to review the settlement agreement. A final ruling is not expected until 2022.
