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PSI Rate Case

UPDATE: The IURC issued a final order in this cause on May 18, 2004.

NOTES: The following fact sheet was distributed to consumers at the OUCC public information meetings and IURC public field hearings held in October 2003 in Kokomo and Bloomington.

On November 3, 2003, the OUCC revised its recommendation based on updated information to recommend a $26.3 million annual revenue increase, which would result in a 2.2 percent increase in an average customer's monthly bill.
(Notes updated 5-20-04)


OUCC Fact Sheet

Cinergy/PSI Rate Case
IURC Cause No. 42359

  • On December 30, 2002, PSI Energy, Inc. filed a petition with the Indiana Utility Regulatory Commission (IURC), requesting an increase in its base electric rates and charges. PSI also requested approval for several “rate adjustment riders.” The riders would allow rates to reflect specific cost changes without requiring a review of other potentially offsetting cost or revenue changes. The utility filed written testimony supporting its petition on March 31, 2003. PSI’s rate increase request reflects the costs of capital projects previously approved by the IURC including federally mandated pollution control technology and new generating facilities, as well as other cost and revenue changes.

    • After updating its original filing, PSI currently requests an annual revenue increase of $179 million. If approved, the monthly bill for a consumer using 1,000 kilowatt hours would increase by approximately 14 percent over current base rates.

    • Witnesses providing written testimony on behalf of PSI were questioned at a technical evidentiary hearing in June 2003.

    • PSI’s current base rates were approved in 1996, but customer bills have included periodic rate adjustments since then via several IURC-approved “rate adjustment riders” or “trackers” related to fuel, purchased power and pollution control equipment construction and operation costs.

  • On August 19, 2003, the Indiana Office of Utility Consumer Counselor (OUCC) filed testimony based on its detailed review of the utility’s request and related evidence.

    • In its testimony, the OUCC recommended an annual revenue increase of $18.2 million, which would result in a 1.5 percent increase in an average customer’s monthly bill.

    • The OUCC reached this conclusion due largely to: its experts’ judgment that the utility’s request for return on shareholder equity was too high given the returns available to shareholders on comparable investments; the utility’s need to depreciate its equipment less rapidly than requested; and a number of miscellaneous areas in which the company believes its ongoing expenses are higher and ongoing revenues lower than what the OUCC believes. The OUCC testimony also sought to eliminate or modify a number of the rate adjustment riders proposed by the utility.

    • The OUCC recommendation accepts and allows for recovery through rates the significant investments made by Cinergy/PSI to meet its environmental responsibilities, to add generation capacity and to improve its transmission and distribution systems. The OUCC's lower rate recommendation reflects factors found by experts to be offsetting these significant investment costs.

  • On September 3, 2003, IURC testimonial staff filed testimony based on its review of a number of significant aspects of the utility’s request. On the issues addressed, testimonial staff’s overall recommendations regarding PSI’s proposed rate increase fell between the positions taken by the OUCC and PSI.

  • Eight additional parties have formally intervened in this case: The Citizens Action Coalition of Indiana, International Brotherhood of Electrical Workers Local No. 1393, Indiana University, The Kroger Co., Nucor Steel, Purdue University, Steel Dynamics, Inc., and an ad hoc group of large-volume industrial consumers. Most of the intervening parties have filed written testimony.

  • On October 22 and 27, IURC public field hearings will be held in Kokomo and Bloomington, respectively. During the public field hearings, consumers will be able to submit testimony in the form of written or oral comments. The comments will become part of the official evidentiary record to be considered by the IURC in reaching its final decision. Written consumer comments are given the same consideration as oral comments.

  • On November 3, 2003, a technical evidentiary hearing on testimony filed by the OUCC, formal intervenors and IURC testimonial staff, as well as testimony filed by PSI in response to those filings, is scheduled to begin in Indianapolis. The hearing, scheduled for 9:30 a.m. in Room TC-10 at the Indiana Government Center - South, is open to the public. However, participation in evidentiary hearings is typically limited to the cross-examination of technical witnesses who have filed testimony on behalf of the proceeding’s formal parties.

  • All hearing and filing dates are subject to change. A settlement agreement is possible in any legal proceeding.

  • Consumers with questions or concerns about this case or other utility issues are encouraged to contact the OUCC's consumer services staff toll-free at 1-888-441-2494 or online by clicking here.


General Information

Indiana Office of Utility Consumer Counselor (OUCC)

  • State agency
  • Represents the interests of all utility consumers and the general public on issues concerning electric, natural gas, water, sewer and telecommunications utilities
  • Staff of accountants, engineers, economists, attorneys, consumer services and support personnel
  • Participates in regulatory and legal proceedings
  • Provides consumers with a voice in utility policy
  • Responds to consumer questions and information needs

Indiana Utility Regulatory Commission (IURC)

  • State agency
  • Regulates many, but not all, Indiana utilities
  • Regulates utility rates, financing, service territory, quality, etc.
  • Required by law to make decisions that balance the interests of utilities and consumers
  • Neutral, fact-finding body
  • Authority to investigate utility rates and practices

Information Meeting and Public Field Hearing:
What is the difference?

Public Information Meeting

  • Facilitated by the OUCC
  • Opportunity for attorney (OUCC) and client (consumers) discussion
  • Opportunity for consumers to advise OUCC staff of concerns
  • Provides an opportunity for consumers to ask questions and get information
  • Opportunity for consumers to make written comments that can be entered into the official record considered by the IURC in its decision

Public Field Hearing

  • Conducted by the IURC
  • Formal, legal proceeding presided over by an Administrative Law Judge and recorded by a court reporter
  • Often required by law
  • Conducted in utility’s service territory
  • Allows consumers to make sworn written or oral comments on the utility’s proposal, its service and any other relevant issue
  • Not a question and answer/discussion format; designed to allow consumer comment
  • Consumers providing oral comments may, at the conclusion of their testimony, be asked questions by judge, commissioners or an attorney for any formal party to the proceeding
  • Comments are part of the official record considered by the IURC in making its decision


Prepared by the OUCC
100 North Senate Avenue, Room N501
Indianapolis, IN 46204-2215

Toll-free 1-888-441-2494
Voice/TDD (317) 232-2494
Fax (317) 232-5923

www.IN.gov/oucc
UCCINFO@oucc.state.in.us