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Commission investigating the COVID-19 pandemic's impact on utilities, ratepayers

Indianapolis Star logo Indianapolis Star 6/10/2020 London Gibson, Indianapolis Star
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The Indiana Utility Regulatory Commission is investigating the impact of the COVID-19 pandemic on utility companies and ratepayers, in part because of a controversial request from state utility companies that asked permission to recover costs and lost revenue in ways that could include rate increases for customers.

The investigation will consider arrangements that could make the financial burden easier on ratepayers, including a disconnection moratorium, adjusted late fees and payment arrangements. It will also consider the utilities' request for recovering costs and lost revenue.

Kerwin Olson, director of consumer advocacy group Citizens Action Coalition, said he is glad to see that an investigation is taking place. 

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However, he also said he is disappointed to see that the Commission didn't shut down the utilities' request for permission to recover lost revenue from energy that wasn't used, a practice he previously told IndyStar he considered unfairly shifting the financial burden to ratepayers. 

"We were sort of hopeful that the Commission would just sort of put an end to this for now," Olson said. "We were incredibly disappointed to see the Commission leave the door open, if you will, on lost revenue being considered."

The Commission is expected to issue an order on these subjects before June 30, the day that the current executive order suspending disconnections ends. After that, a procedural schedule will be established for the second phase of the investigation.

A spokesperson for the Commission said they could not comment on pending cases. 

Utilities ask for permission to recover losses

Indiana's large, investor-owned utility companies, including Duke Energy, Indianapolis Power & Light, Vectren Energy and Northern Indiana Public Service Company, say they've faced financial impacts from social distancing and stay-at-home orders initiated because of the coronavirus pandemic.

As energy use overall plummeted and social distancing required added costs for labor, supplies and healthcare, these companies say they've experienced "a significantly reduced load and revenue," according to their petition filed last month.

In hopes of recovering these losses, the utilities petitioned the Commission for authority to defer their expenses, possibly through rate increases. Some utilities also asked for permission to extend payment plans for customers with past-due bills.

"The relief requested ... is necessary in pursuit of the public health, as maintaining strong and viable utilities is critical to the State’s public health," the petition said.

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Similar measures across the country have already been approved, although not all of them allow for companies to recover lost revenue. 

In an emailed statement, Danielle McGrath, president of the Indiana Energy Association, said the state's utility companies are preparing to meet the June 30 deadline and reviewing the Commission's request for information.

"Additionally, they will continue to work with their customers during this challenging time," McGrath said.

Recovering lost revenue is exactly what sparked concern from consumer advocates such as Olson, who characterize it as unfairly charging customers already struggling through a widespread economic recession. 

In the last 10 weeks, almost 700,000 first-time claims for unemployment insurance were filed in Indiana.

"I don’t know what more economic data we need," Olson said. “I think the most important priority the Commission should focus on is protecting customers."

Some smaller, municipal and nonprofit utilities in the state also filed a petition last week asking to be considered separately from these large, investor-owned utilities, citing different financial interests.  

How some decisions could help ratepayers

The Commission's investigation responds to the petition from the state's large utilities, but it also addresses a petition by the state's Office of Utility Consumer Counselor, also filed last month. This petition requested the Commission to evaluate how utilities should address pandemic-related issues, including extending the moratorium on disconnections, waiving fees and expanding payment arrangements. 

These consumer protections are something Citizens Action Coalition have supported for some time now, Olson said, and have asked the government to formally evaluate them in the past. While Olson said he's glad it is being investigated, he regrets that it took this long, allowing the utilities time to file their petition and "get in the driver's seat" of the discussion.

"We feared the utilities taking control of the conversation," Olson said. "We feel very strongly that the government and the Commission should have gotten ahead of this and done this earlier."

It's a quick turnaround to get input to the commission before the deadline, Olson said. Primarily, he said he would like to see the moratorium on utility disconnections extended. Other than that, he would like to see utilities require longer payment arrangements. 

"Our primary concern, as should be the primary concern of the Commission, is protecting consumers," Olson said. "Stop the disconnections, and we can talk about this other stuff."

Contact IndyStar reporter London Gibson at 317-419-1912 or lbgibson@gannett.com. Follow her on Twitter @londongibson

Connect with IndyStar’s environmental reporters: Join The Scrub on Facebook.

IndyStar's environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.

This article originally appeared on Indianapolis Star: Commission investigating the COVID-19 pandemic's impact on utilities, ratepayers

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