Indiana Michigan Power Co. reached a settlement agreement with other stakeholders to lower the company's proposed rate increase to $96.8 million, or 7.26%, as a result of the recent federal tax overahaul.
In July 2017, the American Electric Power Co. Inc. subsidiary filed for an increase of approximately $263 million, or 19.7%.
Indiana Michigan Power said the reduction in proposed rates for its "Building the Future" project reflects the utility's ability to pass along the company's tax reform savings to customers. In December 2017, the Tax Cuts and Jobs Act was signed into law, and included a provision to lower the corporate tax rate to 21% from 35%.
The "Building the Future" project aims to accelerate vegetation management, modernize the company's delivery system, and offer a new renewable energy program for customers. The program would also adjust the depreciation of unit 1 of the 2,600-MW coal-fired Rockport plant to prepare for its eventual retirement.
If approved by the Indiana Utility Regulatory Commission, under the settlement average residential customers who use 1,000 kWh monthly would see an increase of $9.41 on their bills, including the proposed customer charge portion of the bill which is $10.50 per month. The rates will become partially effective in July, and fully effective in early 2019.
Other parties in the settlement agreement include the Office of Utility Consumer Counselor, Indiana Community Action Association, Indiana Coalition for Human Services, City of South Bend, Sierra Club Hoosier Chapter, Citizens Action Coalition of Indiana, The Kroger Co., Wal-Mart Stores East LP, Sam's East Inc., City of Fort Wayne, 39 North Conservancy District, I&M Industrial Group, City of Marion, Marion Municipal Utilities and Muncie Sanitary District.