(INDIANAPOLIS) - The Indiana Senate has taken a step to help Hoosiers who are frustrated by rising utility bills.
State Senator Sue Glick of LaGrange says the Senate passed House Enrolled Act 1002, which would overhaul Indiana's ratemaking process for electric utilities to promote affordability, predictable monthly bills and reliable service.
One of the major reforms in HEA 1002 is switching to performance-based ratemaking, which requires companies to meet affordability and reliability requirement goals to collect their full return on investment.
Glick says under this model, if a utility's average residential bill increases significantly faster than national electricity prices, the utility's return will be cut by the Indiana Utility Regulatory Commission. Service providers would also need to ensure their utility is reliable, and if the total duration of a utility's service outages significantly increases, their return will be cut.
Switching to a performance-based model is the biggest change to Indiana's ratemaking process in over 100 years. Glick says Indiana has historically operated under a cost-of-service model, where companies could charge customers to recoup their costs.
Going forward, the amount utilities can collect will be based on the quality of service they provide to customers.