Indiana consumer agency recommends state reject IPL rate increase

A state consumer agency is urging Indiana regulators to deny Indianapolis Power & Light Co.’s request to raise rates by $96.7 million, saying such a steep hike is unjustified.

The Indiana Office of Utility Consumer Counselor said Friday morning it would support a much smaller increase of $4.9 million.

In a sharply worded statement, the consumer’s office pointed out that IPL just granted a revenue increase of $29.6 million two years ago to pay for operating and maintenance costs and capital improvements.

“Between the rate increase IPL received only two years ago and the evidence filed in this case, there is no justification for the size of the requested increase or for IPL’s proposed changes to its customer charges,” Consumer Counselor Bill Fine said.

IPL wants to increase the “fixed charge” on its 490,000 customers by 59 percent—from $17 to $27 a month. IPL officials have called that “a modest increase” that is needed to cover the cost of power plants, transmission poles and wires.

But some consumer advocates point out that the $27 monthly fixed charge would be the highest among all of Indiana’s investor-owned utilities.

The OUCC is urging the Indiana Utility Regulatory Commission to establish a flat, monthly charge of $11.25 for each residential customer. In addition, the OUCC is recommending that IPL maintain its monthly customer charge for small commercial customers at $30. IPL wants to raise that monthly fee to $40.

In addition to raising fixed rates, IPL also wants to increase the “energy charge”—which is based on the actual volume of electricity customers use, measured by kilowatt hours. The increase could vary widely, due to complex rate formulas and depending on the amount of electricity consumed.

The OUCC said it has filed exhibits with state regulators that include comments from more than 2,700 IPL customers.

IPL’s rebuttal testimony is due on June 21, with a hearing scheduled for July 16.

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