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Monday, June 01, 2015

Ind. Gov't. - "Editorial: Anti-consumer energy laws need second look"

From a May 27th editorial, here in the Richmond Palladium-Item, that first appeared in the Fort Wayne Journal Gazette:

On May 8, the Indiana Utility Regulatory Commission turned down $2.6 billion in rate requests made by two Indiana utilities under a law passed by the legislature in 2013. Duke Energy wanted $1.87 billion; Indiana Michigan Power had asked for $787 million. The commission ruled that both requests went beyond the scope of the new law.

David Stippler, the Indiana Office of Utility Consumer counselor, which represents the state's consumers in actions before the IURC, had opposed those increases. He called the commission's orders "a significant victory for consumers."

Two other utilities had already sought increases under the measure, which allows companies to ask for seven years of funding for certain types of infrastructure needs in advance.

A request from NIPSCO was approved by the commission, but the Indiana Court of Appeals then partially overturned and partially upheld approval of the request and sent it back to the IURC for another look.

A decision on a request by the natural gas provider Vectren is still being disputed, according to utility counselor spokesman Anthony Swinger.

The 2013 law, Senate Bill 560, was passed to allow utilities to assure themselves of reimbursement for infrastructure projects seven years in advance.

Consumer advocates argue that the electric and gas companies should ask investors, not consumers, to pay for new lines, meters, storage facilities and such.

"This law was a bad law," Kerwin Olson, executive director of the Citizens Action Coalition, said. The measure directs the IURC to allow utilities to recover every cost "from the power plant to your light switch."

SB 560 was just one example, he says, of legislators attempting to micromanage matters meant to be decided by the IURC when it rules on general rate-increase requests from utilities.

But even under the proposition that all such costs need to be routed straight to the consumer, the new law so far seems to have encouraged utilities to overreach. For instance, I&M wanted to be reimbursed through the law for "vegetation maintenance" — something that stretches the concept of infrastructure.

"There's a lot of uncharted water, that's for sure," Swinger said, "a lot of legal issues that are being tested for the first time."

The real question is why legislators felt constrained to set up the whole dubious process instead of letting utilities make their case for infrastructure costs as part of their base-rates requests to the IURC.

"There's a reason that the regulatory commission was created," Olson said.

Legislators followed 2013's utility-friendly SB 560 with a 2014 bill that killed the IURC's highly effective energy conservation program, Energize Indiana. Then a 2015 bill put energy conservation in the hands of the utilities themselves.

That measure also allows utilities to ask the IURC for permission to repay themselves for lost sales from whatever energy they help consumers to save — and effectively sets no limits on how long the utilities can enjoy those reimbursements.

Maybe next year, instead of an "education session," the legislature should have a "make up for 2013-2015 session" — and at least clarify or delete portions of these three anti-consumer measures.

Posted by Marcia Oddi on June 1, 2015 09:10 AM
Posted to Indiana Government