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Indiana Office of Utility Consumer Counselor

Indiana Office of Utility Consumer Counselor

OUCC > Featured Topics > Indiana Michigan Power (I&M) Rates > I&M Infrastructure Plan I&M Infrastructure Plan

UPDATE: The IURC denied I&M's requests on May 8, 2015.
Commission Orders: Plan Rate Mechanism
OUCC Statement


Indiana Michigan Power Company (I&M) is seeking Indiana Utility Regulatory Commission (IURC) approval of a long-term plan for electric transmission, distribution and storage system improvements, including incremental rate recovery of those costs as the projects proceed. The utility refers to the initiative as its Reliability Enhancement Program.

I&M has filed its request under a law (Senate Enrolled Act 560) passed by the Indiana General Assembly in 2013.

The Indiana Office of Utility Consumer Counselor (OUCC) filed testimony on January 12, 2015 recommending partial denial of I&M's requested rate recovery. Please see the agency's news release for a summary.

OUCC Testimony on Infrastructure Plan (IURC Cause No. 44542):

OUCC Testimony on Proposed Rate Methodology (IURC Cause No. 44543):

The OUCC issued an October 31, 2014 news release inviting written consumer comments.

All hearings in these cases have concluded. Closing arguments were filed in the last few weeks:

  • I&M filed proposed orders on the plan and rate mechanism on February 25, 2015.
  • The OUCC filed proposed orders on the plan and rate mechanism on March 16, 2015.
  • I&M filed reply briefs on March 24, 2015.

A brief summary of the 2013 law

Indiana Code 8-1-39 allows electric and natural gas utilities to submit 7-year infrastructure improvement plans for IURC approval. It requires the IURC to rule within 210 days once such a request is filed.

  • Once a 7-year plan receives IURC approval, the utility may request incremental rate increases every 6 months to pay for the projects. The rate adjustment is referred to as the Transmission, Distribution and Storage System Improvement Charge (TDSIC). The IURC has 90 days to rule on such a request.
  • TDSIC rate increases are limited to no more than 2 percent of total retail revenues each year.
  • The TDSIC rate mechanism (or tracker) allows the utility to recover 80 percent of the costs as they are incurred. The remaining costs are deferred until the utility's next base rate case, which must be filed before the end of the 7-year period.

I&M's request

I&M filed its 7-year electric system improvement plan on October 14, 2014, in IURC Cause No. 44542. In a separately filed case, IURC Cause No. 44543, I&M is requesting establishment of the methodology for calculating rate recovery of future costs with the first rate increase expected in 2015.

According to the utility's testimony and exhibits:

  • The 7-year plan has a total of about $787 million in capital improvement projects.
  • Projects throughout I&M's Indiana service territory include pole inspections and replacements, overhead circuit and distribution station breaker replacements, underground system replacements, network improvement, vegetation management, and other initiatives.
  • Construction is scheduled to start in 2015 with a proposed electric rate increase of approximately 0.7 percent in 2015. The annual rate increase amounts are projected to vary from 2016 through 2021, ranging from 0.5 percent to 1.3 percent. The average annual percentage increase over the 7-year term is 0.9 percent.

All filings in the cases are available by visiting the IURC's Electronic Document System and entering the appropriate docket number.

This page will be updated based on future developments.