Vectren Energy Delivery and the Indiana Office of Utility Consumer Counselor filed a settlement Monday with the Indiana Utility Regulatory Commission to encourage customers to use less natural gas and lower energy bills.
The settlement is an extension of an energy efficiency plan originally created in 2006, which would have expired at the end of the month and cut the program at the end of 2015, according to a company press release.
The settlement ensures the plan will remain in place until 2020, according to the statement.
The Indiana Office of Utility Consumer Counselor is a state agency that represents ratepayers before state and federal regulatory agencies, according to its website.
The plan includes an energy efficiency program that works to incentivize the gas and energy delivery company, headquartered in Evansville, to help customers conserve energy rather than using more gas and raising consumer bills.
The agreement will also extend a rate design known as “decoupling” that encourages the company to lower consumer energy use to raise its own profits.
This rate design removes the link between gas sales and profits and encourages the company to lower gas use and thereby gas bills for its consumers.
This was opposed before the original 2006 plan was enacted when the company actually could raise its profits by encouraging its customers to use more energy, leading to higher energy bills, according to the release.
The system works by splitting the gas bill into two parts.
The first 60 percent of the bill is determined by gas usage and price, which Vectren does not make a profit on. Instead, Vectren makes a profit on the remaining 40 percent, which relates to distribution and service charges.
This system has saved enough energy over the past eight years to heat over 100,000 homes, according to the press release.
Brian Gamache
