FORT WAYNE, Ind. (WANE) — Indiana Michigan Power will drop its rates.
The utility announced Wednesday that it had filed a rate settlement agreement with the Indiana Utility Regulatory Commission that will reduce base rates for Hoosier residential customers by about 5 percent over the next two years.
The plan calls for a 1 percent decrease in May 2022 and an additional, larger decrease in January 2023, I&M said. The agreement must still be approved by the IURC.
The move comes after the power utility in June announce it would pursue approval of a rate increase of about $10 a month for the typical residential customer to improve technology, reliability, and customer experience. That was ultimately denied by the Indiana Utility Regulatory Commission last month.
I&M said in a news release Wednesday that it could now drop rates “as a result of a separate settlement agreement reached in September, after the original rate case was filed.” That agreement, I&M said, removes the a portion of I&M’s coal-fueled generation plant in Rockport from customer rates, beginning in January 2023.
I&M said this rate decrease will come while it still upgrades aging infrastructure in the state to enhance reliability.
“Indiana Michigan Power constantly strives to serve customers with safe, reliable and affordable
power,” said Steve Baker, president and chief operating officer of I&M. “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.”
More from I&M, presented verbatim:
Enhancing reliability with investment of more than $350 million
The settlement agreement preserves I&M’s plans to enhance reliability of service to our customers by updating and replacing aging infrastructure. The rate agreement will support I&M’s plans to continue strengthening the electric grid in Indiana to reduce the number and duration of power outages. Specific Indiana plans include:
- Replacing more than 2,500 poles and replacing 120 miles of power lines.
- Upgrading 16 substations.
- Inspecting and maintaining vegetation along 4,000 line miles. Vegetation is the No. 1 cause of customer outages.
These enhancements will build on projects approved in previous I&M rate reviews, which have resulted in reduced vegetation-related and equipment-related outages.
Improved Customer Experience
I&M will enhance the customers’ experience by continuing to replace older-technology meters with new smart meters. Smart meters provide I&M insight into the distribution system to detect any issues or outages on the system and respond in a more efficient manner.
The new smart meters also enable customers to gain more control over their energy use by using the I&M website to monitor their energy usage. I&M will also be rolling out a number of new optional programs that customers can choose from based on their individual preferences.
Learn more about smart meters at IndianaMichiganPower.com/SmartMeters.
Deploying New Technologies
I&M will add new technology, including artificial intelligence, robotic process automations and other tools to enhance the reliability of the energy delivery system. More “self-healing” grid technology will be installed to detect power outages and automatically re-route electricity to customers, enabling I&M to respond quicker if an outage occurs and detect potential safety risks.
“The new rate agreement will help I&M continue to make progress toward building the grid of the future,” Baker said. “The agreement is a win-win for our customers, empowering them to better control their costs and energy use while benefitting from investments to enhance reliability with a more resilient grid.”
Expanding Green Energy
The plan will also support I&M’s continued transition from coal-fueled generation to renewable energy sources by providing customers with cost savings associated with removing half of I&M’s coal-fired generating capacity from customer rates. I&M is already a leader in green energy, building Indiana’s first utility owned-and-operated solar farm. I&M now operates five solar farms in the two states we serve. The most recent, the St. Joseph Solar Farm, generates up to 20 megawatts of energy. Together, I&M’s nuclear, solar, wind and hydro generation resulted in 85% of the energy I&M generated in 2020 being emission-free.
I&M expects to make announcements regarding its plans to continue to add renewable energy generation in the coming months.
I&M, Stakeholders Agree to Terms
I&M worked with nine groups representing various consumer interests to reach the settlement agreement in the current rate case. In addition to I&M and the Indiana Office of Utility Consumer Counselor, other groups approving the settlement agreement were:
I&M Industrial Group; Citizens Action Coalition of Indiana, Inc. (“CAC”); the City of Auburn Electric Department; the City of Muncie; Joint Municipals (collectively the City of Fort Wayne, the City of Marion, Marion Municipal Utilities and the City of South Bend); the Kroger Company; Wabash Valley Power Association; and Walmart Inc.
The IURC is expected to conduct a hearing next month to review the settlement agreement, with a final ruling expected in 2022.