MPSC Approves Settlement Agreement Revising Indiana Michigan Power Company’s Cost Allocation and Rate Design Methods
WASHINGTON, D.C. – August 17, 2015 – (RealEstateRama) — The Michigan Public Service Commission (MPSC) today approved a settlement agreement authorizing Indiana Michigan Power Company (I & M) to revise its existing cost allocation methods and rate design methods. The proceeding was required under Public Act 169 of 2014.
The change in allocation methods for production and transmission costs will result in commercial secondary and commercial and industrial primary rates that are more competitive, while maintaining affordable rates for residential customers, based on average annual residential customer bills.
Under the terms of the settlement, production fixed costs will be allocated on a 4 CP 75 percent demand and 25 percent total energy basis; and transmission fixed costs will be allocated on a 12 CP 100 percent demand and 0 percent energy basis. There will be no change in the method for allocating distribution costs and there will be no change in customer charges.
I & M customer bills will be affected as follows: the industrial customer class will pay 3.16 percent less; the commercial customer class will pay 0.12 percent more; the residential customer class will pay 2.25 percent more; the lighting customer class will pay 5.18 percent less; and other customers will pay 7.24 percent less. The modified rates are effective with a billing cycle beginning no less than 35 days from today.
The utility, Michigan Environmental Council, Citizens Against Rate Excess and the MPSC staff participated in the settlement.
Case No. U-17698
For more information about the MPSC, please visit www.michigan.gov/mpsc.
Contact: Judy Palnau, 517-284-8300
