Indiana Michigan 2023 Fuel Cost Reconciliation Docket
Synapse provided expert testimony and analysis to support the Michigan Attorney General, Citizens Utility Board of Michigan, and Sierra Club in reviewing Indiana Michigan Power Company’s (I&M) power supply cost recovery reconciliation application for the 2023 calendar year in Michigan Public Service Commission Docket U-21262. Synapse testimony focused on evaluating the reasonableness of purchased power costs paid to (1) the Ohio Valley Electric Corporation (OVEC) for power from the Clifty Creek and Kyger Creek plant; (2) American Electric Power Generation (AEG) for power from the share of Rockport owned by AEG.
We found that I&M purchases power from OVEC, an affiliate company, at above market prices and passes the unnecessary costs on to ratepayers. Over the source of 2023, those costs totaled $33.2 million more than the cost of equivalent energy and capacity purchased from the market, and more than $18 million more than the cost of long-term power supply benchmarks. I&M does the same with power purchased from AEG, where over the course of 2023, I&M customers were charged $62.3 million more than the cost of equivalent energy and capacity purchased from the market, and more than $51.1 million more than the cost of long-term power supply benchmarks. We also found that both the OVEC and Rockport coal plants lost money on an energy basis in 2023.
We recommend that the Commission disallow $2.7 million, Michigan’s share of the total $18 million in excess costs that I&M paid for OVEC service in 2023 (relative similar benchmarked resources). Similarly, we recommend a disallowance of $7.7 million for Michigan’s jurisdictional share of the $51.1 million in excess compensation that I&M paid AEG for Rockport in 2023 (relative similar benchmarked resources).