- Associated Press - Monday, December 1, 2014

INDIANAPOLIS (AP) - Municipal electric companies around Indiana are preparing to fight an expected push in the state Legislature that would block them from adding territory as cities or towns annex new areas.

A proposal being developed by Republican Sen. Mike Crider of Greenfield would prohibit the state’s 72 municipal electric companies from taking territory from rural electric cooperatives and investor-owned utilities or change the formula for compensating the existing electric provider.

Crider told The Journal Gazette (https://bit.ly/1vbT4ke ) he believed the statewide property tax caps were prompting many cities and towns to try more annexations.

“Cities are looking to improve their tax base, so they seek to annex, and electric service is a result of that,” he said. “I think the annexations have happened enough that if you are a rural electric or investor-owned, it’s a concern.”

Columbia City Mayor Ryan Daniel said the municipal electric companies only have 7 percent of the state’s customers and that the legislation would create a monopolistic situation. Cities that annex territory have to buy the infrastructure and facilities from the existing electric provider and pay that provider based on the gross annual revenue of the area for five years, Daniel said.

“I’m confused as to why this is a good time to pit us against each other,” he said.

Indiana Energy Association President Mark Maassel said the investor-owned utilities his group represents, such as Duke Energy and Indiana Michigan Power, and the REMCs aren’t allowed to take municipal territory, so they are looking for an even playing field.

“It has really only become more challenging for us in the last couple of years,” Maassel said. “We are in a different world with property tax caps, and we need to step back and assess whether it works.”

South Whitley Town Manager David Wilkinson said the community doesn’t have annexation plan right now, but in the future, it wouldn’t make to offer water, sewer, police and fire services and not be able to provide municipal electric as well.

Carolyn Wright, vice president of government relations at the Indiana Municipal Power Agency, said the group representing the municipal utilities believed it was better for residents to have a locally owned electric company when possible.

“Seventy-two communities are fortunate to have their own electric service,” she said. “The motivation is to provide a low-cost service to the citizens in the community. Why should we be prohibited from providing that one service?”

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Information from: The Journal Gazette, https://www.journalgazette.net

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