Consumer Shock: I&M's proposed 25 percent rate hike
Billie Bratton held up her I&M electric bills and rattled the monthly totals from memory.

In four months this year, the South Bend resident paid $404.90 in January, $433.13 in February, $443.61 in March, and her bill in April so far totals $344.35.

Should Indiana Michigan Power be granted its request to increase its base rate by more than 25 percent, Bratton figures her electric bill would shoot up to about $550 a month.

"For me, a single woman struggling, it's not right," Bratton said.

"When people are so down, to raise anything now ... it's not just me, it's everybody that really hurts."

Bratton was among an estimated 35 residents, business owners and environmentalists who showed up at the Century Center Tuesday night for a public hearing to address the proposed I&M rate increase.

A panel made up of Indiana Utility Regulatory Commissioners Kari Bennett, Larry S. Landis, Jim Atterholt, and IURC Administrative Law Judge Jeffery A. Earl listened to the I&M customers who took to the podium in unanimous opposition to I&M's proposed base rate hike.

"This is not the time for this rate increase," said Steve Francis, Indiana chapter chairman of the Sierra Club.

In September last year, I&M filed a petition with the IURC seeking to increase its annual operating revenues by nearly $174 million to offset what the utility's officials say are higher operating and maintenance costs, environmental mandates, and infrastructure improvements.

According to testimony given during a seven-day evidentiary hearing in February, I&M's request would increase the monthly bill for a residential customer using 1,000 kilowatt hours by 25.38 percent.

"Electric heat is getting to the point where it's very prohibitive," said South Bend resident Joseph Jacob, who resides in an "all-electric home" and currently pays an estimated $400 a month using 4,000 kilowatt hours.

"It would be nice if I could realize some sort of discount for living in an all-electric home," Jacob said.

Commercial customers would feel the rate-hike pinch, too, and the lure of new businesses to the area would dampen, said Elkhart business owner Wayne Jones.

"Current costs (are) what attracts the businesses to the area now," said Jones, owner of Bimbo Bakeries, who took exception to I&M's rate-hike request to cover rising maintenance costs.

"When we have maintenance issues, we don't ask the customers to pick up the costs," Jones reasoned.

Besides, Francis noted of an economy still fighting a recession and residents continuing to struggle to keep up with household bills, "No company in its right mind could raise prices in this environment."

Francis cautioned there's more to I&M's request to raise rates by 25 percent than maintenance costs and infrastructure improvements.

A 25 percent spike, he said, would lend itself to future electric costs at the planned $2.6 billion coal-to-gas plant in Rockport, and $1.25 billion in additions slated for the Donald Cook Nuclear Plant near Benton Harbor.

"I&M has to come up with more than $3 billion in costs with further rate increases," Francis said.

James Hall of Elkhart wasn't buying any of I&M's reasons.

"Why such a big increase?" Hall asked. "Twenty-six percent is, quite awfully, a lot."

Staff writer Jeff Harrell:
jharrell@sbtinfo.com
574-235-6368