Dive Brief:
- Indianapolis Power & Light has filed a rate increase with Indiana regulators designed to cover rising operational costs and enhanced customer service functions. The request could go into effect late this year if approved by the state Utility Regulatory Commission.
- While the proposed increase will vary among business customers depending on rate class and usage approved, the AES Corp. subsidiary said average residential customers will pay about $8 more per month.
- The Indianapolis Business Journal reports most of the higher rates would be in the form of a fixed charge, not tied to a customer's energy usage.
Dive Insight:
IPL has proposed raising fixed monthly charges to $17, up from $11, according to the Indianapolis Business Journal. With the average residential customer expected to pay about $8 more per month overall, that means the majority of the utility's proposed increase would not be tied to a customer's electricity usage.
If IPL’s request is approved by the Indiana Utility Regulatory Commission, new rates would go into effect toward the end of 2015. According to the utility, IPL currently offers the lowest residential rates of the 20 largest cities in the U.S.
“The people of IPL take pride in providing high reliability and great service to our customers, while also being efficient to keep our costs low,” said Kelly Huntington, IPL president and CEO. “As the costs to do business rise we must make adjustments to maintain the safe and reliable electric service our customers depend upon.”
The rate increase would boost IPL's annual revenues by approximately $67.8 million, or an overall increase of 5.6%.
Increases in fixed charges were a nationwide trend in 2014, Utility Dive reported, with at least 23 utility requests across the country to tie less of customer's power bill to energy consumption. Solar advocates say the new rate structures are commonly sought by utilities to disincentivize rooftop solar and other distributed generation in their service areas.
