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In the most recent IURC survey of residential electric utility rates, Indiana Michigan Power (I&M) ranked seventh among the 14 electric utilities under the IURC’s jurisdiction.
As of July 2015, approximately 86 percent of a typical I&M residential customer’s bill paid the base rate (which traditionally covers most infrastructure and operating/maintenance costs) with the remaining 14 percent being recovered through rate adjustment “trackers,” as described below.*
I&M was granted an increase of $92 million in annual operating revenues. The utility requested an additional $170.1 million in its proposed order, while the OUCC recommended limiting the proposed increase to $30.7 million.
The OUCC appealed the Commission's order to the Indiana Court of Appeals. The court upheld the order on March 11, 2014.
The IURC held a series of public field hearings in the rate case in April 2012.
In cases initiated under a 2013 law, I&M requested approval of a 7-year, $787 million plan for infrastructure improvements, along with incremental rate increases. The IURC denied the request in May 2015. To learn more, please visit www.in.gov/oucc/2804.htm.
I&M received IURC approval for its Life Cycle Management (LCM) project at its D.C. Cook Nuclear Plant in Bridgman, Michigan on July 17, 2013, including rate recovery of approximately $1.146 billion over the long term. I&M is recovering these costs through a new tracker.
Approximately 65 percent of Cook’s energy is dedicated to Indiana customers. For more information on this case, visit www.in.gov/oucc/2710.htm.
I&M has received IURC approval to install new pollution control equipment (for sulfur dioxide and nitrogen oxide) at its Rockport Generating Facility in southwestern Indiana as required by a federal consent decree. The utility will also be allowed to incrementally recover the project’s costs through rates, starting at least 6 months after construction begins.
The Commission's order approved a settlement agreement among the OUCC, the I&M Industrial Group, and I&M. For more information, visit www.in.gov/oucc/2673.htm.
In addition to base rates, I&M and other electric utilities recover and credit separate, specific costs through rate adjustment mechanisms known as "trackers." Rate adjustments via trackers are reviewed by the OUCC and approved by the IURC on a semi-annual or annual basis.
Clean Energy Solar Project
In IURC Cause No. 44511, I&M requested IURC permission to build, own and operate five solar generating facilities totaling about 16 megawatts. I&M requested approval of a new Solar Power Rider through which it would recover costs for the solar projects. In testimony, I&M estimated an impact of about $38 million on ratepayers. I&M also requested approval of a separate Green Power Rider, through which customers could voluntarily support additional solar development.
I&M's testimony and exhibits are available by visiting the IURC's Electronic Document System and entering Docket Number 44511. The OUCC recommended approval of the proposal with modifications and specific reporting requirements. The IURC issued its order in February 2015.
New Capacity Settlement Tracker
In I&M’s last base rate case (Cause No. 44075), the IURC authorized the creation of a new Capacity Settlement Rider (CSR). This new tracker, to be updated annually, is designed to allow I&M to recover variances in costs relating to a generation capacity pooling agreement among American Electric Power (AEP) utilities in various states.
I&M received IURC permission to implement this new tracker (IURC Cause No. 44422) on July 9, 2014.
In this case, I&M’s testimony and exhibits stated that because of the recent termination of the generation capacity pooling agreement, the new tracker will raise a residential customer’s monthly bill for 1,000 kilowatt hours (kWh) by 4.7 percent.
The OUCC, in its testimony, requested a gradual “phase-in” of the proposed increase.
In addition, I&M is seeking approval of a new energy efficiency plan that would increase rates in the coming year.
I&M uses the following trackers:
Tracker Recovers Costs for Frequency IURC Cause No. Fuel Adjustment Clause (FAC) Coal, nuclear and other fuel costs Quarterly 38702 Environmental Cost Recovery (ECR) Emissions control equipment (including operations & maintenance) Quarterly 43636 Demand Side Management (DSM) Energy efficiency programs Semi-Annual 43827 Off-System Sales (OSS) Power sales to the wholesale market Semi-Annual 43775 PJM Interconnection (PJM) Regional transmission costs Semi-Annual 43774 Life Cycle Management (LCM) Construction costs for pre-approved Cook nuclear plant projects Annual 44182 Capacity Settlement Rider (CSR) Cost variances relating to an AEP capacity pooling agreement Annual 44422
All publicly filed documents can be reviewed by visiting the IURC's electronic document system and entering the appropriate docket number.
* Rankings and examples refer to monthly usage of 1,000 kWh in the IURC’s 2015 Residential Bill Survey, based on July 1, 2015 billings.