INDIANAPOLIS (WISH) — Indianapolis Power and Light customers will see their utility rates drop slightly, starting Sept. 1.
The adjustments come after state regulators lowered the amount of “add-on” costs the utility is allowed to pass on to ratepayers.
The net result is a total decrease of $1.35 per 1,000 kilowatt hours (kWh). The average Indianapolis single family home uses approximately 1,000 kWh per month.
The orders were approved Thursday by the Indiana Utility Regulatory Commission, following a review of IPL’s Fuel Adjustment Cost (FAC) and Environmental Cost Recovery (ECR) allowances.
FAC is reviewed quarterly by the IURC on every utility in the state. IPL’s last FAC review, held June 11, resulted in an approved increase of $0.50 per 1,000 kWh. That’s a typical quarterly rate increase, according to the Indiana Office of Utility Consumer Counselor, or OUCC.
ECR increases can be much larger. They allow utilities to pass along the cost of construction projects used to comply with federal Environmental Protection Agency mandates on air, soil or water quality.
IPL’s last ECR review resulted in a $0.91 per 1,000 kWh increase.
Large decreases do occasionally happen, but are more rare.
Thursday’s order dropped the FAC allowance by $0.32 per month for the average IPL ratepayer. The ECR rate drop was even higher, at $1.03 per month for the average IPL ratepayer.
“This is a win for ratepayers,” OUCC Director of External Affairs Anthony Swinger told 24-Hour News 8. “This will ensure lower rates on these costs for IPL customers through at least the end of November of this year, when the rates will be up for review again.”