The Inside Scoop: Proposed Electric Rate Increase

It’s been 24 years since Auburn Electric has requested a rate increase. Even more, it’s been 40 years since we last did an analysis of the cost to deliver electricity to homes and businesses in Auburn. Suffice it to say, the demand for electricity, along with the way it’s delivered, has changed dramatically compared to just a decade ago—let alone four decades.

As a result, in the spring of 2013, Auburn Electric commissioned a cost-of-service study to determine two key factors:

  • Whether rates are commensurate with Auburn Electric operating costs
  • Whether the allocation of cost of service to customers (there are 13 customer classes) is fair and equitable based on their usage and delivery type

The study revealed that rates no longer reflect the true expense of providing electricity to Auburn ratepayers. There’s also a need to reallocate costs across customer classes to more accurately reflect usage, delivery type, maintenance costs and capital expenditures that are important for future growth and development.

Therefore, you’ve probably heard or read in the newspaper that we’ve proposed a rate increase to reflect the realignment of costs across the customer classes. The Board of Works has approved this proposal, so the next step is to submit the proposal to the Auburn City Council and then to the Indiana Utility Regulatory Commission (IURC) for final approval. This process generally takes several months.

How the increase affects Auburn Electric customers

The impact of the proposed reallocation and rate increase will vary. We anticipate costs to increase somewhere between 1.39 and 20.08 percent depending on the customer class—with the average at about 8.92 percent. This means most residents can anticipate a monthly increase of $8 to $14.

While your bill will increase if the proposal is approved by the IURC, it will still be vastly lower than rates in neighboring counties. Even with this increase, monthly rates are expected to be $8 to $16 less than Indiana-Michigan Power and $20 to $26 less than Northern Indiana Public Service Co.

We believe the proposed reallocation and rate adjustments are necessary steps for ensuring a fiscally secure future for our municipal utility. We value our customers and are committed to delivering high-quality service at a fair and competitive rate.