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Indiana Office of Utility Consumer Counselor

OUCC > News > State Utility Consumer Counselor to I&M: Slow Down! State Utility Consumer Counselor to I&M: Slow Down!

OUCC motion opposes Indiana Michigan Power’s request for an expedited rate case schedule
Base rate case is one of three that could have a significant, cumulative impact on I&M customers

Indiana Office of Utility Consumer Counselor
Media Contact: Anthony Swinger, 1-888-441-2494 or aswinger@oucc.in.gov

FOR IMMEDIATE RELEASE
October 7, 2011

The Indiana Office of Utility Consumer Counselor (OUCC) is objecting to Indiana Michigan Power’s (I&M’s) proposal to "fast-track" its pending base rate case.

In a filing made late Thursday, the OUCC is asking the Indiana Utility Regulatory Commission (IURC) to deny I&M’s request for an expedited schedule, a provision that would set a ten-month timeframe and require the IURC to issue a final rate order by July 2012. I&M’s request would increase average rates for its Indiana residential customers by at least 22 percent.

I&M has requested an accelerated schedule for its rate case under the IURC’s Minimum Standard Filing Requirements (MSFR). The MSFR process in IURC regulations provides an expedited option for utilities seeking rate recovery for general, less complex rate case requests. In exchange for the expedited schedule, a utility files testimony, exhibits and technical data at the beginning of the case and typically limits the scope of its request to general operating, maintenance, and capital improvement expenses.

"The rate case I&M has filed contains numerous issues that go far beyond the type of case the MSFR rules envision covering," said Indiana Utility Consumer Counselor David Stippler. "Fast-forwarding this case through the regulatory process would not give the OUCC adequate time to review the wide range of complex issues at stake. Ratepayers deserve the necessary amount of time be given to our attorneys, accountants, engineers, and economists to examine I&M’s justification for its request and to conduct the thorough examination that this case warrants."

Today’s OUCC filing does not address the merits of I&M’s request for a $178 million base rate increase, but it does demonstrate concern over the broader scope of requests I&M has made with the IURC in recent months and the likelihood of others in the near future.

An IURC prehearing conference in the rate case is scheduled for October 20 for the purpose of scheduling filing and hearing dates in this case, including the OUCC’s testimonial deadline. A public field hearing will be required in Fort Wayne, with the OUCC planning to request more field hearings in I&M’s service territory.

Issues in I&M’s 3,954-page filing (IURC Cause No. 44075) that go beyond the scope of a general rate case include:

  • Proposed changes to I&M’s ongoing cost recovery for regional transmission matters
  • Reallocation of transmission costs and investments
  • Proposed creation of a major storm damage restoration reserve
  • Rate design issues involving I&M’s fuel adjustment clause (FAC) filings, through which I&M recovers coal, nuclear and other fuel costs
  • Proposed retirement of 3 units at I&M’s Tanners Creek Generating Facility in Dearborn County, Indiana

"It would be unrealistic to try to complete a thorough review of these broad and extremely complex issues within a few months," continued Stippler. "Even more troubling, the utility’s requested schedule would appear to be an attempt to downplay its requested rate hike during these tough economic times while ignoring the fact that this is one of three major I&M cases that will likely have a substantial impact on I&M’s customers and their wallets in the near term."

In a separate case from its $178 million base rate request, I&M is seeking 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. I&M has filed testimony estimating its share of those project costs at $707 million.

In addition, I&M is expected to request IURC approval of the Life Cycle Management (LCM) project for its D.C. Cook Nuclear Plant in Bridgman, Michigan in 2012. The company’s rate case testimony estimates the cost for this project at "less than $2 billion."

The OUCC estimates that the Rockport environmental case and Cook LCM case are likely to have a significant cumulative impact on I&M ratepayers, above and beyond the pending base rate case.

In addition, I&M continues to recover coal, nuclear and other fuel costs through its FAC tracker and regional transmission costs through another tracking mechanism.

I&M’s last base rate case (IURC Cause No. 43306) was initiated in June 2007 and concluded in March 2009. I&M, the OUCC, and all other formal parties in that case reached a settlement agreement that was approved by the IURC; the agreement allowed I&M roughly one-third of the base rate increase it was seeking.

Consumers are encouraged to visit the OUCC’s Website at www.in.gov/oucc/2667.htm for updates on the rate case as it moves forward. Also, the OUCC is inviting written consumer comments at www.in.gov/oucc and via mail, fax and email:

  • Mail: Consumer Services Staff
    Indiana Office of Utility Consumer Counselor
    115 W. Washington St., Suite 1500 South
    Indianapolis, IN 46204
  • Fax: (317) 232-5923
  • E-mail: uccinfo@oucc.in.gov

All written comments on the I&M rate case should include the consumer’s name, mailing address, and a reference to IURC Cause No. 44075.

 

(IURC Cause No. 44075)

The Indiana Office of Utility Consumer Counselor (OUCC) represents Indiana consumer interests before state and federal bodies that regulate utilities. As a state agency, the OUCC's mission is to represent all Indiana consumers to ensure quality, reliable utility services at the most reasonable prices possible through dedicated advocacy, consumer education, and creative problem solving. To learn more, visit www.IN.gov/OUCC.