Utilities Seek COVID-19 Relief, Could Result In Higher Energy Bills

May 12, 2020

An employee of Wellington Energy Inc. works to install a new watthour meter at a residence in Portland, Oregon.
Credit Portland General Electric

Several gas and electric utilities in Indiana are seeking financial relief due to COVID-19. But consumer advocates worry this could make energy bills even higher for people who are currently struggling to pay bills during the crisis. 

Several gas and electric utilities in Indiana are seeking financial relief due to COVID-19. But consumer advocates worry this could make energy bills even higher for people who are currently struggling to pay bills during the crisis. 

The utilities say they’re losing money because building closures have driven down the demand for energy. They’re also paying extra for things like protective gear and employee overtime. Meanwhile, many have stopped disconnections and late fees to help out residents unemployed due to the pandemic.

The utilities have asked the Indiana Utility Regulatory Commission to let them defer some of those costs and track them so they could be recovered at a later date — possibly by increasing rates.

“We're bringing this impact to the commission so that it's known and that we understand how these expenses should be handled on a going forward basis," says Danielle McGrath, who represents utilities through the Indiana Energy Association.

But Kerwin Olson — executive director of the consumer advocacy group the Citizens Action Coalition — says Indiana residents shouldn’t have to pay for lower energy sales.

“Effectively saying, you know, here, we're going to send you a bill for a product you didn't buy,” he says.

Olson says less demand for energy also means utilities are saving on other expenses, like fuel for their coal and natural gas plants. He says the state should look at all of these costs in detail before increasing rates. 

READ MORE: Governor Holcomb Outlines How – And Why – The State Will Reopen

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In response to the petition, an official with the Indiana NAACP has asked the state to deny utilities' request. In an email statement, the group's environmental climate justice chair, Denise Abdul-Rahman, said this is not the time to shift the financial burdens of the pandemic to vulnerable communities. 

"African American Hoosiers bear a disproportionate energy burden already in Indiana, and as indicated by the Indiana Regulatory Commission, high disconnects," said Abdul-Rahman.

McGrath says there would be no impact to customers at this time and utilities are only seeking to recover the costs of keeping their plants operating 24/7.

She says it's also worth noting that 29 states around the country have looked into similar regulatory actions. 

If the state grants the petition, McGrath says each utility would file their own request for relief based on their needs — and each one would have to be approved by the IURC.

CLARIFICATION: A previous version of this story attributed Denise Abdul-Rahman's quote to the NAACP. For the purpose of clarity, it has been changed.

Contact Rebecca at rthiele@iu.edu or follow her on Twitter at @beckythiele.

Indiana Environmental reporting is supported by the Environmental Resilience Institute, an Indiana University Grand Challenge project developing Indiana-specific projections and informed responses to problems of environmental change.