FORT WAYNE – Electric and natural gas ratepayers could immediately be billed for infrastructure upgrades under a measure passed by a House panel Wednesday.
Senate Bill 560 now moves to the full House. It would expand the use of so-called trackers to items such as transformers, fuel, poles, lines and more – basically the entire transmission and distribution system.
This would provide the revenue for a seven-year infrastructure plan upfront through a slimmed-down regulatory proceeding instead of the utility waiting to recoup costs later in a full base rate case before the Indiana Utility Regulatory Commission.
Opponents contend investor-owned utilities should have to take the risk of investing in upgrades first and then have state regulatory commission decide what should be reimbursed by customers.
Sen. Brandt Hershman, R-Lafayette, told the House committee that the current process for a full rate case before the IURC is time-consuming – sometimes more than a year – and costly.
That is why there is a need for trackers – an expedited hearing for increases related to infrastructure costs found to be “reasonable and necessary.” And Hershman noted the bill requires a utility getting a tracker increase to come in for a full base rate case within seven years – something some electric companies haven’t done.
“To allow recovery costs as they occur will prevent major rate spikes,” said Ed Simcox, president of the Indiana Energy Association. “Indiana has aging infrastructure. This work has to be done now.”
The Senate altered the bill to address some concerns. For instance, the amount that can be tracked would be limited to 3 percent of the utility company’s revenues. And 20 percent of the project costs utility companies want to recover would be withheld until the full rate case.
The House committee went further Wednesday – dropping that limit to 2 percent – and making other tweaks.
But consumer opponents still argue the bill could authorize utilities to charge residential, commercial and industrial ratepayers hundreds of millions a year in transmission and distribution expenses.
“We’re talking about investment risk and who should bear the risk,” said Kerwin Olson, executive director of the Citizens Action Coalition.
He noted the average electric bill has risen 48 percent in Indiana over the last decade, and it can’t all be blamed on federal mandates.
Olson said the investor-owned utilities have the cash to finance the infrastructure upgrades – not senior citizens and small businesses choosing between, “heat and eat.” He acknowledged problems within the process for a full rate case but said the bill makes changes to streamline that procedure.
“We are fixing that. Why do we need a tracker?” Olson asked.
Gov. Mike Pence said his office is monitoring the bill. He pointed out Indiana’s low energy costs used to be a benefit when recruiting industry, but the state’s advantage is waning.
“My focus is going to be on what is it about this bill that puts Indiana back on a trajectory for lower utility costs for Hoosiers and Hoosier industry,” he said.
