Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Rate Design topic
No spam. Unsubscribe anytime.
Consumer Groups Warn Economic‑Development Rates and Data‑Center Deals Could Shift Costs to Households
Summary
AARP and other witnesses told senators that special rates and contracts for large new industrial customers — including data centers — risk shifting costs to residential customers and recommended tighter safeguards such as separate rate classes or incremental‑cost tests.
Consumer advocates and critics of preferential industrial rates told a Senate Energy Subcommittee that language in House Bill 3309 and related proposals could allow “economic development” or transformational customers to receive discounts that shift costs to ordinary households.
“Rate setting is a zero‑sum game,” said John Ruth of AARP, who testified that if large customers are offered discounted rates, the commission’s revenue requirement must be allocated to remaining customers and could raise residential bills. Ruth recommended an approach used in other states — for example, creating separate rate classes or using an incremental‑cost test — so large new users pay costs their additions impose on the system.
Frank Knapp, a longtime energy commentator, criticized provisions that would change the mission language for the Office of Regulatory Staff and said the bill’s economic‑development rate language is “tremendously anti‑consumer.” He added that one section would permit transformational industrial customers to “pay up to 25 percent less than the cost of producing the electricity,” a gap he said residential customers would make up.
Those who testified asked lawmakers to protect low‑income and fixed‑income households from subsidizing large accounts, and to require Public Service Commission oversight of any discounted rates and transmission cost allocation tied to big industrial projects. Some witnesses suggested the Legislature consider the Indiana approach of a separate rate class for large data centers.
Ending note: Senators heard repeated requests to ensure any economic development incentives are crafted so they do not increase bills for ordinary residential customers and to require transparent PSC review before rate discounts are authorized.
