It’s no surprise that companies across the country have been hurting throughout the COVID-19 pandemic and shutdown, but now a group of Indiana utility companies are petitioning the state to give them the power to change rates and payment options in order to make up for the revenue they lost during the pandemic.
The petition was filed with the Indiana Utility Regulatory Commission last week, with the following companies signing onto it:
- Duke Energy Indiana, LLC
- Indiana Gas Company (D/B/A Vectren Energy Delivery of Indiana, Inc.)
- Indiana Michigan Power Company
- Indiana Natural Gas Corporation
- Indianapolis Power & Light Company
- Midwest Natural Gas Corporation
- Northern Indiana Public Service Company, LLC
- Ohio Valley Gas Corp. and Ohio Valley Gas, Inc.
- Southern Indiana Gas & Electric Company (D/B/A Vectren Energy Delivery of Indiana, Inc.)
- Sycamore Gas Company
The document filed with the Indiana Utility Regulatory Commission lays out the economic impacts, both on companies and individuals, caused by the COVID-19 pandemic and actions taken by the federal and state governments.
On March 19, 2020, Governor Holcomb issued Executive Order 20-05 to address the significant economic impact from COVID-19. Executive Order 20-05 deems utility service to be essential and prohibits utilities from discontinuing their services. The Executive Order further directs that all state agencies with rulemaking power, including the Commission, are “authorized to waive, suspend, or modify any existing rule of their agency where the enforcement of which would be detrimental to the public welfare during this emergency.”
It goes on to explain what steps these companies took, as providers of essential services, in order to help reduce the stress and financial impact on their customers. The companies that signed on to the petition say that they “suspended customer disconnects” before the governor required them to do so; they reconnected customers who had just recently been disconnected and did not require them to pay any fees in order to be reconnected; and they claim they also found ways to waive multiple fees customers would have normally been required to pay for certain services.
The companies also highlight the fact that all of these actions have never been taken before and that they made these choices with their customers’ current financial struggles in mind.
However, the petitioning companies also make the argument that “the additional social distancing and other requirements to prevent the spread of COVID-19 imposed on essential businesses… has changed the way that the utilities perform their tasks, imposing costs that are not reflected in utility revenue requirements used for setting rates.”
They argue that they have faced additional costs in the form of overtime pay; sick pay; cleaning supplies; costs of COVID-19 testing and temperature checks; personal protection equipment; and equipment to help their employees work from home.
In order to address their losses, the utility companies are asking the Commission to give them the
authorization of mechanisms that permit Joint Petitioners to adjust future rates to recover deferred revenues within 24 months following the end of the period in which they are recognized, and other details related to tracking, auditing and recovering deferred amounts.
In short, these companies are asking for permission to make customers pay the utility bills they were unable to pay during the COVID-19 pandemic by having them make those payments over a 24-month period. They’re also asking for the ability to change their overall rates and create repayment programs in order to decrease their losses in revenue.
An article from Inside Indiana Business breaks down how the Indiana Office of Utility Consumer Counselor is suggesting these matters be examined through a formal investigation, which would include two separate phases.
Phase one of this investigation would include:
expanding the disconnection suspension beyond June 4; waive all deposits, late fees, convenience fees, and reconnection fees; expand the use of payment arrangements to assist customers; and immediately start documenting and accounting for assets and liabilities related to stayed disconnections, waived fees, and extended payment plans.
The second phase features a focus on long-term issues, including “consideration of appropriate methodology to review the reasonableness, necessity, and prudency of any COVID-19-related cost recovery requests in future rate cases.”
We will keep an eye on how any such investigation plays out, as well as how the Indiana Utility Regulatory Commission responds to the petition and its requests. We will provide updates to this story as they become available.
The petition that was filed with the Indiana Utility Regulatory Commission is available online, and you can read it by clicking here.