A crack in the dike? Could Indiana's new rate proposal inspire other states?

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By: SGN Staff

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Quick Take: The Indiana legislature is considering a measure to allow utilities to increase rates on their own without going through the typical regulatory process, according to a story in the Evansville Courier and Press. The Senate has approved a bill that would let utilities use "cost trackers" to calculate what they need to upgrade infrastructure. It's still a long ways from becoming law – it must still pass the Indiana House where it faces opposition from consumer groups. Even so, it is a glimmer that perhaps some states are realizing that the current system is causing utilities to fall behind. Far too often, they cannot get reimbursement until after they've made the expenditures and must run the risk that some or all of the improvements will be disallowed. - By Jesse Berst

 

As Jesse Berst notes above Senate Bill 560, despite its passage by the Indiana Senate, faces a rough go in the House with opposition from not only consumer groups but commercial and industrial electric customers who are afraid it will lead to higher costs, said House Speaker Brian Bosma (R-Indianapolis), who was quoted in the news article. The Indiana Energy Association, a utility lobbying group, is supporting the deregulatory measure for electric and gas companies.

 

Bosma also predicted changes would be made to the bill by House Utility Chairman Eric Koch (R-Bedford). Bosma said Koch is expected to "try to find a sweet spot between allowing a reasonable portion of expenditures to be reimbursed during the course of improvements, not just reimbursed after they're completed – but also keeping Indiana competitive on utility rates, which a key economic indicator, as well. He hopes to moderate the bill in a reasonable way."

 

Should the House follow through on those expected changes and the bill it passes is different from the Senate version, it will go to a joint House-Senate conference committee where legislators will try to come up with a final version of the bill.

 

Jesse Berst is the founder and chief analyst of Smart Grid News.com, the industry's oldest and largest smart grid site. A frequent keynoter at industry events in the U.S. and abroad, he also serves on advisory committees for Pacific Northwest National Laboratory and the Institute for Electric Efficiency. He often provides strategic consulting to large corporations and venture-backed startups. He is a member of the advisory boards of GridGlo and Calico Energy Services.