Published: July 11, 2008 11:19 pm         

Power company not telling everything

Indiana Michigan Power, a subsidiary of AEP, is traveling the state, talking to editorial boards to discuss its rate increase request. Citizens Action Coalition wants to offer some balance to the discussion, and weigh in on behalf of consumers and residential ratepayers, and point out the facts that I & M is not talking about.

I & M is claiming its costs are “up and rising,” yet after reviewing their request, net investments in Indiana plants and facilities have increased just $41 million, or 2.3 percent since 1991. That hardly justifies a 20 percent increase to residential ratepayers. They also disguise a prepayment of pension expenses as a capital investment and include it in the rate base, costing ratepayers more than $6 million per year. In addition, I & M wants to charge ratepayers for environmental controls that have not been approved by state regulators as prudent or necessary, force Indiana ratepayers to pay for transmission facilities that primarily benefit utilities and customers in other states, and make consumers pay for “lost revenues” they claim will result from efficiency programs they have never implemented in Indiana and have no historical data to support!

I have not even mentioned the $96 million per year that I & M collects in off system sales. That is surplus power, paid for by Indiana I & M customers, which is being sold to other utilities and other states, boosting stockholder value at the expense of Indiana ratepayers. I & M wants to keep half of that revenue for its shareholders, instead of returning all of it to the customer, who paid for it in the first place.

Let’s keep in mind that I & M is requesting a $47.8 million increase in base rates. Surely a portion of that $96 million could be used to offset that request.

We at Citizens Action Coalition find this rate increase completely unjustifiable. We know that Indiana consumers will see their heating bills significantly increase this winter and we all feel the pain at the pump when we fuel our vehicles. Health care costs are spiraling out of control, wages are stagnant, utility disconnects and arrears are at all-time highs, and the costs of food staples are rising. Seniors and working-class Hoosiers are faced every day with tough choices, forced to choose between food, gas, energy or medicine. This must end. State regulators must deny this request.



— Kerwin Olson

Citizens Action

Coalition of Indiana

Indianapolis