City also OKs bond issue for expanding industrial park
Richmond Power & Light wants to leave the state agency that reviews and approves changes to its electric rates. The RP&L board set that process in motion on July 5.
Also that evening, the Richmond Common Council approved a bond issue for expansion of a west side industrial park.
During the RP&L board meeting, General Manager Tony Foster asked permission to proceed with getting out of the Indiana Utility Regulatory Commission. The RP&L board approved. Foster will present the proposal to Richmond Common Council on Monday, July 18. The council and RP&L board are the same nine people.
If approved by council by Aug. 1, the proposal would be placed on the November election ballot as a referendum question.
Foster told the RP&L board that utilities regulated by IURC must submit to months-long court-like reviews before changing what they charge customers or make certain changes in operations. RP&L’s latest rate case, in 2019, cost the city-owned utility $837,688.90, he said.
Board member Larry Parker said, “We need to emphasize, when we spent that 837 thousand we didn’t spend it, the ratepayers did.”
Until 1988, all utilities in Indiana had to submit to rate reviews, Foster said. That year, state law changed to allow municipally owned utilities and membership-owned cooperatives to opt out. All but seven of the 72 municipally owned electric utilities and all 32 of the state’s rural electric membership cooperatives (REMCs) have left, Foster said.
Board member Ron Oler said local rates are always controlled by elected officials – the RP&L board – who are held accountable by voters.
Foster said RP&L would still perform a cost-of-service study before changing rates but would no longer have to spend staff time and legal resources in hearings before the IURC. Being non-profit, RP&L rates are set to cover costs without making a profit.
Before the RP&L board meeting, the Common Council approved a $3.25 million bond issue for the purchase of 360 acres that will expand the Midwest Industrial Park on Richmond’s west side. First Bank Richmond will purchase the bonds.
The plan was to go to the Richmond Redevelopment Commission on July 12 for approval, according to Beth Fields, the city’s strategic initiatives director. The Redevelopment Commission recommended adding the land to the city’s economic development area, making it eligible for tax increment financing, or TIF. That means the bonds will be repaid from the additional property tax that would be collected as improvements such as buildings are put on the land. None of the overlapping taxing districts, such as schools or townships, will lose tax revenue as a result.
The Common Council’s next regular meeting will be at 7 p.m. Monday, July 18, in the Municipal Building, 50 N. 5th St. The public may attend, or watch live on WGTV.