FORT WAYNE, Ind. – Indiana Michigan Power (I&M), a subsidiary of American Electric Power (AEP), June 25  informed the Michigan Public Service Commission (PSC) it intends to implement an interim rate increase of $44.3 million annually, effective July 26, while the PSC considers the full $62.5 million annual increase requested in January.

Regulations inMichigan allow utilities to adjust rates on an interim basis 180 days after filing a general rate case if a final decision on the original filing has not yet been reached.

“This is the first base rate case that I&M has filed in nearly 20 years. The cost of providing electric service has risen greatly since the last time our base rates were adjusted, and I&M’s revenues and overall rate of return are currently below a proper and reasonable level. The interim increase is necessary to assure adequate revenues to fund the operations that will allow us to continue meeting the expectations of our customers until a final decision is made on our rate filing,” said Helen J. Murray, president and chief operating officer of I&M.

I&M’s interim rate request will enable the company to recover basic costs associated with providing service.

The interim rate proposal does not include increases associated with proposed trackers, proposed changes to sharing mechanisms or the proposed recovery for regulatory assets, each of which requires separate commission approval. An average residential customer in Michigan using 1,000 kilowatts of electricity per month currently pays between $72 and $74 per month for service.

Under proposed interim rates, that customer could see an increase of approximately $17 per month until a final decision is reached on I&M’s general rate case, on or before Jan. 27, 2011.