I&M Rate Case Settlement Marks Blow to Coal and Gains for Clean Energy

Utility’s original plan would have bolstered super polluting Rockport coal plant and “essentially killed” solar market in Michiana

Lansing, MI – The Michigan Public Service Commission (MPSC) on Thursday approved an all-party settlement in a rate case for the Indiana Michigan Power Company, which serves more than 129,000 customers in southwestern Michigan and the Michiana area.

I&M, a subsidiary of utility giant AEP, filed its request for a rate increase in June. The Environmental Law & Policy Center, Vote Solar, the Ecology Center, the Sierra Club and the Solar Energy Industries Association (SEIA) intervened.

The groups negotiated a settlement that cut the utility’s original annual revenue increase request by $22.1 million dollars, from $58.5 million to $36.4 million, saving money for I&M customers across southwestern Michigan.

The utility’s original plan would have greatly reduced the credit paid to customers who sell electricity from solar panels or wind turbines back to the grid, which would have “essentially killed” the solar market in southwest Michigan, said Environmental Law & Policy Center Staff Attorney Nikhil Vijaykar.

Over three months of negotiations, the environmental groups fought off those changes to the distributed generation tariff. They also successfully countered several of the utilities’ rate design proposals that would have hiked fixed charges on customers’ bills, hurting customers’ ability to implement and benefit from energy efficiency and renewable energy. They also secured a requirement that I&M seek approval from the Michigan Public Service Commission before extending their lease at Rockport coal-burning unit 2, which is one of 22 super polluters in the United States.

“This settlement is a victory on two fronts,” Vijaykar said. “First, we won a reasonable interim rate for distributed generation customers, and kept Michigan moving towards a fair, value-based rate for solar. Second, we kept Indiana Michigan Power’s original regressive rate design proposals out of the picture.”

“Sierra Club applauds the Public Service Commission’s approval of this settlement which requires I&M to get permission before extending its money-losing lease with the super polluter Rockport coal-burning plant in Indiana. This decreases the likelihood that I&M will extend its commitment to the massive Rockport unit 2, and instead create an opportunity for Michiganders to demand cleaner and less expensive energy.” said Mike Berkowitz, Sierra Club’s Beyond Coal Campaign Representative for Michigan.

“This is about fair rates and the freedom to choose where your energy comes from. Providing fair value for the local, clean energy hardworking Michigan families and businesses produce is essential to achieving our clean energy goals and ensuring customers can go solar if they so choose,” said Will Kenworthy, Midwest Regulatory Director for Vote Solar.

“We’re grateful that the Michigan Public Service Commission saw the I&M proposal for what it was, a backwards attempt to distort energy prices and lowball the value of solar in Indiana and Michigan.This decision is a win for energy consumers and will help to improve customer choice, grow local solar markets and create jobs that can’t be outsourced,” said Nakhia Morrissette, central region director and counsel at SEIA.

The new rates will go into effect Feb. 1. They will not affect I&M customers in Indiana.