Indiana's consumer advocate recommends removing all but about $5 million from Indianapolis Power & Light Co.'s proposed annual revenue increase.
The Indiana Office of Utility Consumer Counselor, or OUCC, filed testimony on May 24 with the Indiana Utility Regulatory Commission that supports a $4.9 million, or 0.4%, electric base rate increase for the utility, known as IPL.
The AES Corp. subsidiary in December 2017 requested a $124.5 million electric base rate increase. This request is premised upon a number of factors, including $2.1 billion of "significant capital additions" such as the recently completed 671-MW Eagle Valley combined-cycle gas plant and commission-approved environmental compliance projects.
IPL lowered its requested increase by nearly $30 million in February to reflect federal tax savings tied to tax reform legislation enacted by President Donald Trump late last year. The company now supports a $96.7 million, or 7%, rate hike premised upon a 10.32% return on equity, while the OUCC testimony backs an ROE of 9%.
OUCC testimony indicates a significant amount of its proposed reduction to the rate hike is tied to adjusting proposed operations and maintenance expenses, along with reflecting actual costs for coal ash disposal and actual Eagle Valley expenditures to date.
The change in the Eagle Valley costs alone result in a $49.4 million decrease to IPL's proposal, the OUCC said. (IURC Cause No. 45029)
