Settlement Agreements Under the 300-Day Rule

May 22, 2015 by Kay Pashos, Partner | Steven W. Krohne, Partner
Settlement Agreements Under the 300-Day Rule

The following is an excerpt from Ice Miller's Pathways to Success for Utilities Guide which provides insights on a variety of topics potentially impacting utility service providers. 

In Indiana-American Water Company’s recent rate case (IURC Cause No. 44450), the utility and the Indiana Office of Utility Consumer Counselor (OUCC) reached a settlement agreement, and the Indiana Utility Regulatory Commission (IURC) had not issued an order by the time the 300 days had lapsed. The statute does not explicitly address interim-rate increases in the context of a settlement, and perhaps one could argue that Indiana-American should have been entitled to implement 50% of its originally requested rate increase at the 300-day point, subject to refund. The IURC, however, determined that because Indiana-American and the OUCC had reached a settlement on the amount of the rate increase, it would only allow Indiana-American to put into effect 50% of the proposed settlement amount after the 300 days had lapsed. This may or may not discourage settlements, but it is a factor to consider.

In sum, Indiana Code § 8-1-2-42.7 modernizes Indiana’s rate case practices and should provide benefits to utilities and customers alike through a reduction in regulatory lag and lower cost of debt. Few utilities have used the new statute to date, but we are eager to work with clients on future or hybrid test period cases and to help them reduce regulatory lag.

To learn more, download the Pathways to Success for Utilities Guide or contact any member of Ice Miller's Energy and Utilities Law practice group.

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