July 9, 2008

I&M Urged to Hold Off Raising Rates, Use Renewable Energy

By Kelly Metz, The News-Sentinel, Fort Wayne, Ind.

Jul. 9--Six people who spoke at a public hearing Tuesday night urged Indiana Michigan Power to consider renewable energy before raising rates by up to 20 percent.

"There isn't much incentive for people to use renewable energy," said Gary Washington, owner of the Solar Trade Group, which provides solar power as renewable energy in Indiana and Ohio. "And I already have 62 interested customers. Even though it costs a lot in the beginning, there is a huge payback."

I&M officials say the increase is necessary to accommodate growth and pay for infrastructure improvements. The monthly service charge for a residential customer would jump from $6.65 to $7.40; customers using at least 1,000 kilowatts hours in a month would see their base rate go from $68.49 to $81.50.

Walt Branson, vice chancellor for financial affairs at Indiana University-Purdue University Fort Wayne, and Regina Leffers, a construction engineering technology professor, said the university could save money by implementing net metering -- the process of creating and storing one's own renewable energy -- on campus.

"The price going up should always be the last resort, not the first," said Roger Hirt, who is retired from General Electric. "We need to know what you are doing for cost containment, alternative energy, what is increasing and why. Using an alternative method would save (I&M) money in the long run."

Any increase must be approved by the Indiana Utility Regulatory Commission. The Indiana Office of Utility Consumer Counselor -- the agency representing customers' interests, has not yet taken a position on the proposal but is scheduled to complete its review and file testimony by Aug. 1. The deadline for public comment is July 22, and a final decision could come Aug. 18.

I&M, a subsidiary of American Electric Power Co. Inc., serves about 455,000 residential, commercial and industrial customers in 20 northern, northeast and east-central Indiana counties. The utility's current base rates for Indiana customers were approved in 1993.


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