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Consumer Groups Object to Fixed-Price Power Increases

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Monday, November 30, 2015   

INDIANAPOLIS – Consumer groups are sounding the alarm about attempts by electric utilities in Indiana to increase their fixed monthly charge.

It's the base rate customers pay even before using any electricity.

NIPSCO's request to regulators would increase the base rate from $11 to $20 a month for residential customers. And a pending IPL case calls for a more than 50 percent hike.

John Howat, senior energy analyst with the National Consumer Law Center, says this shifts the burden of paying for the electric system to those who use it less.

"No matter how little you use or how small your house or apartment, you end up paying a similar amount as those living in a mansion or a larger business,” he points out. “So, there's a real fairness issue here."

According to the utilities, the increases are needed because they're selling less power as a result of increased energy efficiency and the use of renewable energy.

Opponents argue customers should not be penalized for being more energy efficient or for generating their own power through alternative sources.

Kerwin Olson, executive director of the Citizens Action Coalition, explains Indiana is a surplus state with plenty of electric capacity, and yet utilities are claiming the increased cost would ensure reliability.

"It's really scare tactics designed to scare the public into thinking that if rates are not adjusted upward, that somehow the lights are going to go out across the state of Indiana,” he states. “Nothing could be further from the truth."

Electric rates would also increase 11 percent under NIPSCO's request, with the average customer paying $17 more a month.

Howat calls this questionable public policy, because it disproportionately affects those who can least afford the increases.

"Lower income elders, households living below 150 percent of the poverty line and other low-income groups tend, on average, to use less energy than younger households, or higher-income households," he says.

The Indiana Utility Regulatory Commission is expected to issue a final order on the IPL case by early spring, and testimony is due in January on the NIPSCO request with a decision expected by the end of 2016.





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