Five questions for Andy Zay, Indiana Utilities Regulatory Commission chairman - The Journal Gazette

Andy Zay was State Senator for District 17, including Huntington, Wabash and Grant counties, before Gov. Mike Braun appointed him in January to lead the IURC. Answers have been edited for length. 1 The IURC recently called in the “Big Five” utilities and announced a series of listening sessions regarding rising energy costs. What prompted this and what are you hoping to accomplish? Zay: Energy affordability is one of the most pressing challenges states are facing today. We’re seeing rising energy costs driven by a range of factors. Some are tied to necessary investments, while others are outside of a utility’s control, such as inflation, fuel price volatility or extreme weather. We are required by law to balance priorities like reliability and affordability, and ensure that utility service remains not only safe and reliable, but also just and reasonable. This creates some real challenges when demand is growing and expectations are evolving. It’s difficult to put a price tag on reliability, and the rates we set have real impacts. Careful attention must be paid to the rising costs that surround these demands. State lawmakers worked to address affordability during the past legislative session with House Enrolled Act 1002. For our part, the commission is conducting a multiphase strategy exploring potential solutions within our scope and authority. On March 24, the commission started this process by calling in representatives with the five largest investor-owned utilities who answered questions regarding the impact of growth on affordability, bill transparency and the steps they’re taking (or could take) to address rising costs. Phase II is already underway and involves hearing from customers directly. As part of a 10-stop listening tour, I will be traveling across the state to gather information and better understand their experiences, concerns and perspectives. The commission will review the information and determine any appropriate next steps. 2 With major data center projects expected to drastically increase energy demand, what’s the commission’s role? And how will you protect residential and small business consumers from bearing the high cost of new infrastructure? Zay: The commission is an impartial arbiter (think of us like a judge) that makes decisions in accordance with the laws and policies established by the General Assembly. Our responsibility is to ensure that the utilities under our jurisdiction are making prudent decisions as they meet their obligation to provide safe and reliable service. That responsibility remains the same, whether it’s a federal compliance case or a matter involving a large-load customer. Two recent decisions illustrate different approaches utilities are taking to prevent residential customers from being unduly burdened by the costs associated with large-load customers. The first is IURC Cause No. 46097. The commission approved an updated industrial power tariff for Indiana Michigan Power that sets the contract terms and conditions for large-load customers. There are several provisions, such as an 80% minimum monthly billing demand, 12-year minimum contract term, an exit fee of up to 5 years of the minimum charge, that work to ensure that the costs associated with serving high-energy users would be borne by them, not residential ratepayers. In IURC Cause No. 46183, NIPSCO was approved to create a subsidiary intended to structurally isolate large-load generation costs from other ratepayers. This model is designed to prevent data center-related energy costs from shifting to NIPSCO customers. 3 What’s the commission’s approach to implementing performance-based ratemaking under HEA 1002? Zay: House Enrolled Act 1002 gives the commission some new tools that incentivize utilities to make decisions that benefit customers, specifically related to service reliability and affordability. It does this by aligning shareholder outcomes with customer outcomes, meaning when utilities perform well and customers benefit, shareholders can be rewarded. Performance-based ratemaking changes the incentive structure. As a commission, it allows us to be more proactive and ensures utilities have more “skin in the game” to make prudent decisions that put customer reliability and affordability first. 4 What steps are you taking to ensure that utility trackers and riders are presented clearly and transparently, ensuring consumers understand how their total monthly bill is calculated? Zay: We don’t manage the day-to-day operations of utilities. However, in the past, the commission has authorized investments in technologies that would allow them to modernize their systems with the goal of improving bill transparency. We live in an age where information is always within reach, and customers deserve clear, accessible insights into their energy use and costs. Leveraging these investments or exploring options to provide more transparent, itemized billing is something I strongly support. 5 How does the commission balance utilities seeking to add new generation, such as wind and solar, with the need to maintain reliability and affordability? Zay: Balancing priorities like reliability and affordability is central to our mission. Utilities have an obligation to serve all customers and must provide that service safely and reliably. Not all generation resources are alike. Maintaining a balanced mix of intermittent and dispatchable resources is critical to ensuring a smooth, well-managed transition. But much of our decision-making revolves around cost. Thoughtful planning underpins this process and informs our evaluation of the investments utilities are making to meet demand and ensure reliability. Electric utilities consider these tradeoffs in the integrated resource plans they submit to us every three years. These plans show how each utility intends to meet demand over a 20-year planning horizon at the lowest cost reasonably possible while maintaining flexibility. These plans provide critical insight that we, as regulators, take into consideration in each case to ensure the grid remains stable, reliable and as affordable as possible during this transitional period. Most Read Christa Pike on a ventilator and unconscious after failed Tennessee execution, attorneys say Grabill man found guilty of murder for local attorney's stabbing death Recent divorce filings in Allen County – Oct. 6 Teen's lawsuit blames Fort Wayne Community Schools, its leaders for inaction after sexual misconduct 10 northeast Indiana school districts best state for proficiency in both English, math Stocks Market Data by TradingView