Indiana utilities seek approval to charge consumers for revenue lost as result of pandemic

  • Comments
  • Print

Ten Indiana utilities are asking state regulators to allow them to charge ratepayers for revenue they stand to lose because of the COVID-19 pandemic.

The gas and electric utilities, including Indianapolis Power & Light Co. and Duke Energy Inc., filed a joint petition Friday with the Indiana Utility Regulatory Commission, saying they are expecting to see “significantly reduced load and revenue” as a result of businesses closing their doors or moving operations to remote status.

The utilities are asking for permission to collect lost revenue from customers. They also want to charge customers for all “bad debt expense incurred” associated with government orders to not disconnect utility hookups due to nonpayment.

The petition did not spell out how much they expect to lose in revenue from the pandemic, or how much customer bills could increase if regulators grant their wish. But they said the pandemic is unprecedented and is causing “substantial adverse financial impact” on their business.

“Many businesses have had to make difficult decisions to reduce and, in some cases, suspend their operations, which in turn has created significant financial challenges for residential customers. … It is unknown at this time how long the event will last, whether it will recur, or how significant the impact will be on Indiana customers and the utilities that provide them with essential services,” the petition said.

In response, a consumer group, Citizens Action Coalition of Indiana, blasted the request as “unprecedented utility greed.”

“It is disgusting that during these unprecedented times, they are more concerned with quarterly stock reports that with the health, safety and well-being of the Hoosier communities and consumers which they serve,” said Kerwin Olson, the organization’s executive director, in written remarks.

He said what the utilities are seeking is permission to allow them to categorize lower energy sales as an expense caused by the pandemic and to allow them to collect the lost revenue from consumers.

“In other words, the investor-owned utilities want to charge consumers for the energy that they did not sell because of the global pandemic,” he said.

The Indiana Energy Association, a trade group that represents utilities, said the petition seeks to defer the fixed-cost portion of energy production “that enables companies to have power available around the clock.” It does not include fuel costs.

The IEA also pointed out that at least 29 states have seen similar regulatory filings. Utility commissions in 10 states have opened dockets of a similar nature at the request of energy companies.

“There is no immediate impact on customers from this step,” the IEA said in an email. “The costs and revenue impacts would have to be reviewed and approved by state utility regulators in the context of a detailed, deliberative proceeding such as a company’s future rate case.”

It added that utilities have taken steps to help customers by waiving fees and offering flexible payments.

“The companies understand the financial hardship this pandemic is creating for customers and acted quickly to voluntarily establish a moratorium on disconnects due to nonpayment,” the IEA said.

Indiana also issued an executive order suspending such disconnections through June 4.

The Indiana Office of Utility Consumer Counselor also announced Monday it is asking the state to open a formal investigation into how utilities will deal with the impact of COVID-19 on utility rates and services, and on how they will deal with overdue utility accounts.

The OUCC wants the state to extend the suspension of utility disconnections “for an appropriate timeframe” beyond June 4. It also wants the state to waive all deposits, late fees, convenience fees and reconnection fees.

“The full impact of the pandemic’s economic consequences will slowly emerge throughout the months ahead,” said Indiana Utility Consumer Counselor Bill Fine. “This extraordinary and unprecedented situation calls for new protections to ensure that all Hoosiers have access to essential services, especially consumers who are suffering loss of income through no fault of their own.”

In addition, the OUCC also wants state regulators to review the “reasonableness, necessity and prudency” of any COVID-19-related cost recovery requests in future rate cases.

The utilities said they are seeing labor costs rise in the form of overtime, sick time due to prolonged illness, and employee sequestration.

They also claim they are paying high costs for cleaning supplies, health care, testing and temperature checks, personal protection equipment, and equipment and supplies to enable employees to work from home.

Other costs include uncollectible or bad debt expense associated with some customers’ inability to pay bills.

Altogether, the increased expenses are “having substantial adverse financial impacts” on the utilities, the petition said. The utilities added that many businesses may not be in a position to reopen after the emergency recedes, and that production, supply chain and markets have been disrupted.

In addition to IPL and Duke Energy, the petitioners included Indiana Michigan Power Co., Northern Indiana Public Service Co. and Vectren.

The smaller gas companies on the petition were Indiana Gas Co., Indiana Natural Gas Corp., Midwest Natural Gas Corp., Ohio Valley Gas Corp., Ohio Valley Gas, Southern Indiana Gas & Electric Co. and Sycamore Gas Co.

If state regulators grant the petition, each utility company will be ordered to track their COVID-19 related costs. The IURC will open a separate proceeding for each individual utility.

Indiana Gov. Eric Holcomb did not comment directly on the utility petition Monday afternoon, and said he trusted the IURC to handle the case correctly.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

52 thoughts on “Indiana utilities seek approval to charge consumers for revenue lost as result of pandemic

    1. “I was going to play the lottery last Saturday night – the winning numbers, no less – but I had to take care of a family member who had CoVid-19 – the state needs to pay for my winnings because of the virus.”

  1. Wait, reduced load? So I used less, but you want me to charge more? Didn’t we just get an increase? FYI – I used less electricity to save money, not be billed for your shortfall.

  2. Nothing but a posturing political move -they are setting this up knowing they will not receive that. This has class-action written all over it.

  3. I own several businesses. If things go badly I am on the hook for the losses. This idea that companies believe they are protected from downside risk, is appalling. Perhaps dividends need to be cut back or shareholders need to accept that the company can issue a “cash call”.

    I know that utilities are special, we MUST have their product. Still some degree of shareholder / management accountability is sorely needed.

  4. So can I then charge the utilities for lost wages and bonuses due to the pandemic? What gall to even think they should be special at this time when most companies and individuals have lost money.

  5. UNACCEPTABLE! Tax payers are already overburdened with the financial hardships suffered by the economic effects of COVID-19. Lower energy sales is part of the cost of doing business, and the utilities must bear this burden. Hoosiers are expected to pay their electric bills (without discount) and bail out the utilities? Absolutely not! State regulators, vote “NO” to this request.

  6. We are all at home all the time now increasing our own utility bills and they want us to cover our shuttered businesses energy bills as well? No way.

  7. Profiteering on the COVID-19 pandemic should not be permitted. In any business there is a risk of not getting paid and of downturns in the economy. It is the owners of the business (here shareholders of the utilities like IPL) who take that risk, not the other customers, not the consumers who pay utilities for electrical power or gas.

  8. No other businesses and industries can go back and charge customers for lost revenue due to the Covid-19 outbreak, why should utilities be able to. They can share in the loss just like the rest of us. Additionally, there is no safety net if a company can’t survive the economic downturn, in spite of the various aid packages enacted by Congress. We will lose many businesses that don’t have the resources to make it even after the economy starts to open up. Will the utilities bail them out? I think not!

    I agree completely with Mr. Olsen of Citizen’s Action Coalition. The utilities can take advantage of the existing aid packages recently passed within the scope of those plans. Otherwise, they need to deal with the loses on their own, same as the rest of us. All the reasons the utilities cited in the quote above are the same ones all businesses and individuals have had through all this.

  9. Crazy!!! I may not have been at my job for the past 8 weeks but our 8 employees have been working at home, my son is at home too! I’ve used WAY more electricity and water than if if I was in the office.

  10. I have still been paying my residential and business bills…why should I have to be penalized? How about we see what their profits have been for the last 20 years? Maybe it’s time their execs didn’t get a bonus and more stock options every year. I am the CEO of my company, any idea of how much of a bonus I have had recently? Suck it up is too nice a term…

  11. And what if they see a revenue gain, since we may use more electricity because so many of us are staying at home? I am seeing a revenue loss! By their own logic, they should charge me less, not more.

  12. Insurance companies are formed as a mutual or as a corporation. The difference is that mutual companies are managed for the benefit of the policy holders and corporations are run for the benefit of the stock holders. Utility companies are corporations. Perhaps they should be reorganized as mutual companies established for the benefit of their customers.

  13. Seriously???!!! You’ve got to be kidding. The utility companies are among the least effected businesses. Despite what COVID-19 is doing to so many other businesses and people, they keep buying utilities because they have to. It’s the perfect definition of inelasticity and the utility companies want to leverage it. To make matters worse, the utility companies want to charge even more for less!!! This is insane!!! If the executives of the utility companies can’t make the hard decisions that are required for operating their companies in bad times like the rest of us, they should be fired and replaced like the rest of us. If the Indiana Utility Regulatory Commission approves this petition, they should be fired and replaced as well.

  14. Anyone on the Indiana Regulatory Commission who votes Yes to this increase gets the same treatment as the consumers.

    Bend over w/o Vaseline.

  15. Maybe just reduce wages and Executive pay/perks and eliminate all those lobbyist and golden parachutes.. Iam certain you will be in a position to recover the alleged shortfall…Are these clowns delusional or so familiar with the patsies on the regulatory commission that the rubber stamp may just work again ……GET REAL …No No and Hell no…How about all persons on house arrest whos usage most likely increased..

  16. These multibillion dollar companies can go screw themselves as 100’s of thousands of us are furloughed and still waiting for unemployment and sweating bullets of whether we’re going to lose it all!!!

  17. I have never seen so many comments on any one article from IBJ. State Regulators to kill this. Name one other business allowed to charge customers more when they spend less. This is absurd.

  18. You will see many comments – all of which will be a resounding NO! I receive a residential use report which promotes the use of less electricity…
    IPL commercial users have had to pay a “demand charge” in the past based on the pretense the utility has to have energy available during peak operating times. And why is it called CITIZENS energy group?

  19. I see Governor Holcomb passed the buck again on this one. Please note this election time, how he passes when he should act.
    These utilities should be treated as any business who has losses. Stop being greedy, suck it up, and get your PPP.
    Why on earth should consumers pay for utilities’ losses?
    Indiana Utility Regulatory Commission always lets the big Utilities get what they want.

  20. This is not a SOCIALIST economy – they can’t charge us for what we didn’t use, as well as for the discounts they gave those who needed a break. i.e. spreading the cost among everyone.

    The sheer number of outraged comments should convince those in charge not to approve this sort of ridiculous surcharge. Utilities are already too high for what is received! see my water bill for instance!!

  21. As a retail store owner, our revenue during the mandated shutdown was down 71%. All our vendors took a hit including utilities. Welcome to the club. I am not available to supply any grants.

  22. IBJ – Is this petition published online somewhere that it can be read? As grotesque as this claim sounds, more details would be helpful to understand the claim.

  23. Really? One more thing.. i see this being a trend be set by these corporations! I hope the commission has enough sense to say Heck to the Naw. I am still paying my water/gas/electric/cable each month. At times, choosing to pay these bills over buying more food! Why didn’t these corps CEO’s take a pay cut or furlough their bonuses? This is plain and simple GREED, the American way for big business. If the commission has a public meeting, hope to see you there and asking the commission to vote this down.

  24. Really! Other companies are either going bankrupt or downsizing but they have the nerve to charge us because they lost revenue? What other business can get away with that?

  25. Seriously? This is hilarious. Hum, is it possible that are unaware that everyone, Worldwide, both personally and professionally are experiencing the same thing. When you figure out how to sue the pandemic, so that all of us can be made whole and recoup our losses, please let us know. Until then, eat it, just like we all are.

  26. And utilities wonder why they are hated. Not merely disliked, but hated. This may be the most tone-deaf insult to the already-injured citizens of Indiana that I’ve ever heard of. Suck it up, get a grip. Your shareholders need to suffer this burden, not everyday citizens.

  27. Having worked for IPL for more than a decade, I can tell you that in a typical year IPL sends close to $1 million a DAY to the corporate headquarters in the form of profits. IPL is the cash cow of the parent corporation AES.

    Boo Hoo if they had to cut back on that.