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MPSC Approves Settlement Agreement Authorizing Indiana Michigan Power Company Electric Rate Increase, Customers to See RefundContact: Judy Palnau, 517-241-3323
Agency: Michigan Public Service Commission
February 15, 2012 - The Michigan Public Service Commission (MPSC) today approved a settlement agreement authorizing Indiana Michigan Power Company to increase its electric rates by $14,644,416 annually, effective with the next full cycle of billings.
The amount approved is below the amount the company began to self-implement on January 2. Therefore, the MPSC has directed the company to refund to its electric customers approximately $1,355,584 on an annual basis, plus interest, subject to reconciliation.
As a result of today's MPSC order, customers will see a decrease of approximately 2.88 percent.
Today's order directs the utility to file a reconciliation application with the MPSC within 90 days regarding the refund.
Under the terms of the settlement, the utility's authorized rate of return on common equity is 10.2 percent, which results in an overall rate of return of 6.84 percent; the revised rates will reflect a new power supply cost recovery (PSCR) base rate of 23.77 mills per kilowatt-hour; a PSCR line loss factor of 1.046; and a negative 3.77 mills per kWh 2012 PSCR factor.
Indiana Michigan Power Company on July 1, 2011 filed an application requesting a $24.5 million rate increase. The final amount approved today ($14,644,416) is 40 percent below what the utility requested and represents an increase of 5.88 percent over the rates set in Indiana Michigan Power Company's last electric case (U-16180).
The utility, the MPSC staff and Dock Foundry Company participated in the settlement.
The MPSC is an agency within the Department of Licensing and Regulatory Affairs.
Case No. U-16801
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