The Utility Service Board heard the case Monday to gradually hike rates for Crawfordsville Electric Light & Power customers, as the company seeks to regain lost revenue and upgrade aging substations.
CEL&P is seeking a 14.5% increase in residential rates over the next two years. The first increase would come in the form of a temporary 3.2% rider to correct the undercollection of rates from a 2016 rate error.
Customers pay an additional 3.7% beginning about June 2021, with the rider rolling in to the new base rate design.
Bills go up another 7% in the final phase starting around June 2022.
The average residential customer would pay an additional $12.83 on their monthly bill when the full increase takes effect. Rate increases would be capped at 7% annually.
Joe Mancinelli, president and CEO of NewGen Strategies & Solutions, the consulting firm hired to do a study of the utility’s rate structure, noted the decline in rates since the last increase took effect in 2016.
“This is quite unusual,” he told the board during the city’s first in-person public meeting since most regular business was halted by the COVID-19 pandemic.
“Most rates are going up, and to see this kind of a rate decrease is actually quite a benefit you’ve enjoyed.”
The increase is also meant to reverse the utility’s negative net operating income and build a 90-day cash supply. The utility currently has 20 days of cash on hand.
Commercial customers would begin paying demand charges under the new rate structure.
“They have an opportunity, don’t they, to work with us and some of our people to figure out how to reduce some of those charges, like smoothing out their demand?” board vice president Lyle Fogel asked during the presentation.
Mancinelli replied that under the proposal demand charges will rise as energy charges drop to avoid potentially large bills from the power supplier.
“What that does is send a very strong signal to commercial customers to ... use energy smoothly ... consistently and wisely over time,” Mancinelli said.
The rate study also calls for merging commercial and municipal power rate structures to create similar rates.
The board will vote on the proposal in their next meeting at 5 p.m. June 30 in the City Building. If passed, the proposal goes to the City Council.
The request would then be sent to the Indiana Regulatory Commission for final approval.
