Indiana regulators were about to decide whether to reverse their approval of a $71 million rate increase for AES Indiana — until the new chair of the Indiana Utility Regulatory Commission struck the item from the commission’s Aug. 5 agenda.
Now, the vote could be delayed until two open positions on the five-member commission are filled. That would mean a new set of commissioners will likely find themselves deciding whether to leave the IURC’s earlier decision in place.
For Indianapolis-area residents, that means there’s a chance that higher electricity costs are short-lived. That would be a welcome development for Gov. Mike Braun, who opposed the rate increase even though one of the board members he appointed was among its backers.
The rate increase was approved by the IURC in a 3-1 vote on June 17. All three of the commissioners who greenlit the increase still sat on the IURC when the Office of Utility Consumer Counselor, the state agency that advocates for lower prices for Indiana ratepayers, announced it would seek reconsideration of the rate case.
That left the OUCC with the difficult task of convincing two or more commissioners to change their minds.
But on June 26, commissioner David Veleta, who voted to approve the rate increase, told Braun that he would resign by the end of the summer. He will be replaced by attorney Joby Jerrells on Aug. 17.
Then on Aug. 3, Braun fired commissioner Andy Zay, his own appointee, who also cast a “yes” vote on the rate increase — leaving Zay’s seat empty two days before the IURC was set to issue an order on the request for reconsideration.
The IURC’s deadline to take up the reconsideration petition is Sept. 5, 60 days after it was filed by the OUCC. That means that if the IURC chooses to wait, it still has plenty of time to consider it after Jerrells takes office. Meanwhile, an expedited process is underway to replace Zay, though no date has been announced for the appointment of his successor.
If the IURC does not act on the reconsideration petition by the Sept. 5 deadline, the rate increase will remain in place.
Why the vote was delayed
IURC chair Anthony Swinger told reporters on Aug. 5 that he decided to pull the order on reconsideration from the commission’s agenda “because there was no consensus among the commissioners.”
Swinger, who was appointed chair after Braun demoted Zay from the position in late July, has recused himself from the AES rate case because he worked on it for the OUCC before joining the IURC. With Swinger recused and Zay’s seat still unfilled, there would have been only three commissioners left to vote on the reconsideration request.
The order “was not ready to move forward” because the commission “did not have three unanimous voices,” Swinger said. Asked how his colleagues planned to vote, Swinger said he did not know because of his recusal.
“I have been completely walled off from the AES rate case,” Swinger said.
Two of the remaining commissioners, Veleta and David Ziegner, favored the rate increase in June. One, Bob Deig, voted against it. Once Veleta is replaced, Ziegner will be the only remaining commissioner who voted for the increase the first time around.
Swinger said he did not know whether the commission’s order on reconsideration had already been drafted prior to the Aug. 5 hearing.
“I can assure you that there will be a lot more discussion and a lot more review among the commissioners who are participating between now and the deadline,” Swinger said.
Who are Veleta’s and Zay’s replacements?
Braun, an outspoken opponent of the AES rate increase, has the final say. He will choose Zay’s successor from a pool of finalists selected by the same nominating committee, led by Secretary of Energy and Natural Resources Suzanne Jaworowski, that chose Jerrells.
The committee did not publicly solicit a new round of applications. It will pick a new set of three finalists on the afternoon of Aug. 6.
In a July 16 interview with the nominating committee, Jerrells did not directly address the AES rate case, but he repeatedly signaled his commitment to affordability.
“Seeing all of the outcry from Hoosiers about affordability and about rates really is a problem that needs to be solved,” Jerrell said. “I’m a problem-solver.”
Jerrells said he would press utilities on whether they had adopted austerity measures and organize regional hearings for consumers to describe the burdens imposed by higher rates. He also said he thought Indiana utilities should slow down their plans to retire coal plants, despite firms’ warnings that keeping the aging plants online could raise costs for consumers.
Jerrells currently serves as chief counsel for the Advisory Division in Indiana Attorney General Todd Rokita’s office. He previously served as ethics counsel for the Army and for former Vice President Mike Pence, and he spent almost three years as an attorney for the Indiana Gaming Commission.
Indianapolis City-County Councilor Josh Bain and HVAC businessman Nathan Cazee were the other two finalists in the search that landed on Jerrells. Neither spoke directly about the AES rate case in their interviews with the nominating committee.
But both Bain and Cazee emphasized affordability in their pitches to the committee.
Bain said he would be interested in stripping down the parts of Indiana law that govern the IURC to give the commission more space for “nimble” decision-making.
Cazee, whose LinkedIn says he is the divisional solutions development manager at HVAC manufacturer Daikin Applied Americas, said he wants to increase the share of Indiana’s electricity generated within the state. Like Jerrells, he said he was skeptical of utilities’ plans to shut down coal plants.
What would reconsideration mean for your electricity bills?
Households in Indianapolis have already started paying for the first phase of the rate increase, which took effect in July. For a household using 1000 kilowatt hours per month, the increase is less than $1 a month, AES spokesperson Claire Rice said in a statement to the IndyStar.
It’s unclear if customers would get a refund if the IURC reverses the rate increase.
“AES Indiana implements rates at the direction of the Commission,” Rice said in the statement.
A spokesperson for the commission did not respond to questions from the IndyStar before this article’s publication.
If the IURC keeps its authorization in place and the rate increase moves forward, a second phase will begin impacting customers’ bills in January. The second hike could add up to $5 more in monthly costs for a household using 1,000 kilowatt hours a month, AES estimated in July.
Tilly Robinson is a Pulliam fellow for the Indianapolis Star. She can be reached at tilly.robinson@indystar.com.
This article originally appeared on Indianapolis Star: Are higher electricity bills short-lived? A utility regulator shakeup could mean change
Reporting by Tilly Robinson, Indianapolis Star / Indianapolis Star
USA TODAY Network via Reuters Connect
By Tilly Robinson, Indianapolis Star | USA TODAY Network
