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Consumer agency calls IPL ‘mismanaged’ in response to rate hike request

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INDIANAPOLIS, Indiana (July 29, 2015) – Indianapolis Power and Light is under fire from an Indiana consumer agency after the electric company called for a drastic rate hike, proposing a rate increase of nearly $68 million.

“They have the legal obligation to provide us all reliable and safe electricity and they are not holding up their end of the bargain,” Kerwin Olson, Executive Director of Citizens Action Coalition, said.

That’s what regulatory groups have been saying for months about the rate hike IPL wants. The company has said it would result in an average $8 per month increase for residential customers.

Now the Indiana Office of Utility Consumer Counselor, which represents the interests of utility consumers, says IPL should only be allowed to raise a fraction of that amount.

“We’d say that they’re asking for more than they need,” spokesperson Anthony Swinger said.

In a filing this week, the OUCC called IPL ‘misguided’ and ‘mismanaged,’ saying the company has spent too much on paying its investors and not enough on fixing crumbling infrastructure that has threatened peoples’ safety downtown.

“It is clear that IPL has not been putting enough money back into the system,” Olson said.

The last decade has seen multiple instances where IPL’s infrastructure has had very public issues, including 18 underground explosions and manhole fires since 2005.

“That was an unfortunate public display of IPL’s negligence and under-spending on their system,” Olson said.

IPL has asked state regulators for a $67.7M increase per year, but the OUCC said it believed the company only needs $5.9M.

In addition, Olson and other groups, including the NAACP, said the hike would disproportionately affect low-income residents and that $8 a month adds up.

“Folks at the low end of the scale are going to see a much higher impact than those on the higher end of the scale and that’s just not fair,” Olson said.

“I would be upset if they raised it even more,” ratepayer Sophia Lucas-Short said.

An IPL spokesperson released this statement regarding the proposed rate increases and OUCC’s criticism:

“IPL’s requested rate increase will cover the rising operational costs of providing safe and reliable electricity, as well as enhanced customer service functions. The average IPL residential customer will see an increase of about $8 per month, if approved by the Indiana Utility Regulatory Commission (IURC.) IPL currently has the lowest residential rates of Indiana’s investor-owned utilities, and of the 20 largest cities in the U.S.

IPL is reviewing the testimony filed by intervenors in our rate case proceeding with IURC this week. We will have an opportunity to respond to the testimony from the OUCC and others when we file our rebuttal testimony by September 4. IPL customers who want to learn more about the rate increase request and how it could impact their monthly bill can go to IPLpower.com/answers.”