Kokomo Tribune; Kokomo, Indiana

Letters

March 7, 2013

Letters to the editor - Friday, March 8, 2013

(Continued)

The FairTax, once you understand it, you’ll demand it.

Anthony Gasbarro, Fairhope, Alabama

Senate Bill 560 can help energy costs

The Kokomo Tribune recently picked up an editorial first published by the Fort Wayne Journal Gazette expressing concern about Senate Bill 560 — a bill aimed at expanding natural gas service to rural areas, providing an energy discount to large customers seeking to expand in Indiana, and making changes to improve and update the utility regulatory process.

Specifically, the editorial takes issue with a provision in the bill that allows natural gas and electric utilities to seek timely recovery of costs associated with improving or replacing aging infrastructure needed to distribute natural gas or electricity to customers. Unfortunately, the editorial ignores the extensive oversight the Indiana Utility Regulatory Commission (IURC) retains when it comes to utility rates and charges.

Here is how the bill would work: A utility could propose a seven-year infrastructure plan to improve or replace transmission, distribution and storage facilities. The IURC would conduct a public review of the plan, and customer groups and other affected parties would have the opportunity to comment on the plan and lodge objections to it.

If, after hearing from all sides, the IURC determines the plan is reasonable and approves it, the utility would go back to the IURC up to twice a year and petition to recover its costs through a regulatory tool called a “tracker.” This is another stage of detailed review by the IURC and interested parties. If the IURC finds the costs are unreasonable or unnecessary, it can reject them.

The editorial calls trackers a “deregulatory move,” which is not true. As is the case with any tracker, a utility could not recover a penny under SB 560 without explicit prior IURC review and approval. In fact, this proposed legislation provides the IURC with increased ability to review a utility’s infrastructure plans prior to implementation — a review that typically does not occur under traditional rate case processes.

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