Crawfordsville Electric Light & Power customers could see electric rates increase by about 13% over the next four years under a proposal presented Thursday to the Crawfordsville Utility Service Board.
Consultants with NewGen Strategies and Solutions presented the results of a rate study recommending phased increases of approximately 3.5% annually from 2027 through 2030 to address rising operating costs, capital projects and future debt obligations.
If approved, the first increase would take effect Jan. 1, 2027. The Utility Service Board is expected to consider a resolution at its June 23 meeting to forward the proposal to the Crawfordsville City Council for consideration.
The study found CEL&P will need to generate about $50.2 million annually during the 2027-2030 period to cover operating expenses, capital improvements, debt service and reserve requirements. Consultants said rates are currently insufficient to meet those needs and warned that without increases, the utility’s financial position would steadily decline.
According to the study, CEL&P’s cash reserves would fall to approximately $830,000, or about six days of operating expenses, by 2030 without rate increases. Consultants noted utilities typically target between 100 and 150 days of cash on hand.
The study also found CEL&P’s debt service coverage ratio would become negative by 2030 without additional revenue. The utility must maintain a minimum ratio of 1.2 under bond covenants.
CEL&P General Manager Allison Huenemann said the proposed increases are being driven by several factors, including major infrastructure investments.
“Obviously, we have some large capital projects, too, that drive this, not only the new substation that we’re doing right now, which is where the debt is going to come from, but we also have transmission upgrades that have to be made,” Huenemann said.
Consultants said operating and maintenance expenses account for roughly $45.5 million, or about 91% of the utility’s projected revenue requirement. Power supply costs make up the largest share of expenses at approximately $37.4 million annually.
CEL&P officials emphasized that limiting the impact on residential customers, particularly seniors and low-income residents, was a major factor in recommending gradual increases rather than a larger adjustment all at once.
“We’ve spent a lot of time on it, and we wouldn’t have brought it before you if we didn’t think it was needed and fair,” CEL&P Assistant Manager John Douglas said. “I mean, our number one concern is probably the same one you have, low-income people, elderly folks. When you go into this, that’s usually your number one priority is to minimize the impact on them. I think we’ve done that.”
Under the proposal, the average residential electric bill would increase from about $112.96 per month in 2026 to $116.92 in 2027, an increase of about $4 per month. By 2030, the average monthly residential bill would be about $129.63.
The proposed plan would apply approximately 3.5% annual increases to most customer classes, though some categories would vary slightly. Residential customers would see 3.5% increases each year, while general power customers would see a 3.9% increase in 2027 followed by 3.5% increases in subsequent years.
Consultants concluded the phased approach would allow CELP to maintain reserves, meet debt obligations and recover rising costs while avoiding significant rate shock for customers. They recommended implementing the increases over four years rather than through a single double-digit increase.
