Bill Would Let Utilities Hike Rates, Skip OK ; to Upgrade Infrastructure

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INDIANAPOLIS - Utilities could add the costs of their infrastructure upgrades onto customers' bills after expedited regulatory reviews, rather than Indiana's normal in-depth process, under legislation that passed the state Senate on Tuesday. The measure would allow utilities to use cost "trackers" - a deregulatory move that would guarantee gas and electric providers the revenue they need to upgrade their substations, transformers, lines, poles and more.

It cleared the Republican-dominated Senate on a 37-12 vote Tuesday.

It advances to the House despite objections from opponents who said bypassing Indiana's current process for rate hikes would lock customers into higher bills and discourage utilities from making the shift toward renewable energy sources.

"What utility companies want is faster access to consumers' cash. They dictate policy that is against the public interest," said Kerwin Olson, the executive director of the Indianapolis- based Citizens Action Coalition.

The use of cost trackers to help utilities pay for infrastructure upgrades is a trend that has emerged over the past decade. At least 18 states now allow the mechanism for natural gas companies, and at least 11 states do so for water utilities.

Senate Bill 560's author, Sen. Brandt Hershman, R-Lafayette, said the lighting mishap during this year's Super Bowl in New Orleans underscored the need to speed up improvements to utilities' delivery systems.

"It's not something we think about a lot until we have a problem, and yet our infrastructure in this state is aging," he said, adding new groundwork is necessary for renewable energy sources to come online.

"We have to have a grid that not only connects to it but supports it," Hershman said. "Modernization and expansion is not free, nor are federal mandates free."

Hershman's bill includes several other components, including tax incentives to encourage utilities to build natural gas lines into Indiana's rural areas - something he said could save residents there about $1,600 per year.

It would allow utilities that have waited more than 300 days for state regulators to rule on their requests for rate increases to temporarily implement those rate hikes - although they would have to reimburse ratepayers if regulators ultimately rejected their requests.

"I don't have good news over the long term about electric rates, due to things that I have no control over," Hershman said. …

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