A state regulatory agency has denied the request of NIPSCO and other utilities to charge customers for electricity and natural gas they did not use during the coronavirus pandemic.
NIPSCO, Duke Energy Indiana, Indiana Michigan Power Co., Indianapolis Power & Light, Vectren and five other utilities petitioned Indiana to track losses from lower gas and electricity use during the COVID-19 outbreak for future recovery through rate hikes, arguing the state guaranteed a certain profit margin when originally setting their rates. Utilities said they suffered financial losses during the pandemic when many businesses closed as a result of stay-at-home orders.
The Indiana Utility Regulatory Commission shot down the request to recover lost revenue.
"Under the regulatory compact, at a base level, utilities are obligated to provide safe, reliable service and customers are obligated to pay just and reasonable rates for any such service they receive," the IURC said in in its order. "The balance of this order seeks to work toward allowing customers to meet their obligation while providing utilities the reasonable relief they need to help such customers do so. However, asking customers to go beyond their obligation and pay for service they did not receive is beyond reasonable utility relief based on the facts before us.”
The IURC also extended its prohibition on disconnecting utility service for another 45 days, until Aug. 14. Utilities cannot collect late fees, convenience fees, deposits and reconnection fees during that period.
Instead, utilities must offer payment plans of at least six months to all customers who fall behind on their utility bills during the pandemic.
“Temporarily prohibiting disconnections until Aug. 14, 2020 is a balanced solution that allows both customers and utilities additional time to enter into reasonable payment arrangements to address any arrearages that may have accumulated and maintain essential utility services for the benefit of all customers, the utilities, and other stakeholders," the IURC ruled.
While customers won't be charged for electricity that wasn't used during the state-mandated shutdown, such as at a closed restaurant or bar, those who have struggled to pay their utility bills because of a job loss or reduced income may have to pay more later.
The IURC decided to let utilities track the COVID-19 impacts on the prohibition of disconnections and late fees, "which may be considered for cost recovery in the future."
The National Federation of Independent Businesses said the Indiana Utility Regulatory Commission's decision would help already struggling small businesses across the state.
“This is terrific news for the already battered small businesses of Indiana. The last thing they need is for their utilities to hammer them with rate increases for power they didn’t use during the shutdown,” said Barbara Quandt, NFIB State Director in Indiana. “It’s understandable to charge for a service. However, to ask small business owners to pay for something they didn’t use at a time when they’re barely surviving just adds insult to injury.”
Utility companies are currently reviewing the order, Indiana Energy Association President Danielle McGrath said.
"Throughout this pandemic, Indiana's utilities have provided continuous service and flexible bill arrangements for customers, including an early decision to voluntarily suspend service disconnections to ensure that families and businesses would not have to worry about having electric or gas service because they could not pay during this crisis," she said. "The energy companies have been in communication with their customers on payment options and customers are being urged to contact their provider to learn more about flexible payment options. Any one who is having difficulty paying their bills is also encouraged to contact 211, which is a resource that connects Hoosiers with the services they need."
NiSource spokesman Nick Meyers said the Merrillville-based utility accepted the decision.
"Helping businesses and families rebound from the economic impacts of this pandemic is vital and we respect the commission's decision," he said. "We plan to continue working with our customers, as we have from the beginning, to offer such help as six-month repayment plans and offering Low Income Home Energy Assistance Program customers up to 12 months to address their past due balances."
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