PSI Energy reaches rate settlements with Indiana consumer groups.

PLAINFIELD, Ind.--(BUSINESS WIRE)--Dec. 9, 1994--PSI Energy has reached a settlement with Indiana consumer groups on a rate and a merger savings case pending before the Indiana Utility Regulatory Commission. If the commission approves the settlement, the average overall customer rate increase will only be about 4.2 percent, reflecting in part the impact of savings from PSI Energy's merger with The Cincinnati Gas & Electric Co.

The settlement was reached today with the Indiana Utility Consumer Counselor, the Citizens Action Coalition, and the PSI-Industrial Group.

The 4.2 percent increase does not include a second rate case pending before the commission or future rate updates to cover finance charges on pollution control equipment construction.

``This settlement was a compromise to achieve the lowest possible rate increase for customers while still earning a fair return for shareholders,'' said James E. Rogers, vice chairman, president and chief operating officer of CINergy, the parent company of PSI Energy. ``This is considerably less than the 11.6 percent increase we requested, but we were able to reduce that number through things like extending our schedules for depreciating assets, which does not have an earnings impact. We also were able to lower the increase by providing an upfront guarantee and credit of merger savings to customers.''

The rate increase will go toward such projects as the company's energy conservation programs, new power facilities to help the company during periods of peak usage, and environmental improvements needed to comply with new laws. The increase reflects an additional $28.7 million in annual revenue, plus about $9 million for ``Construction Work in Progress.'' Construction Work in Progress, or CWIP, is a term for a process under Indiana law that allows utilities to update their rates every six months to reflect the finance charges of pollution control equipment under construction. Following this rate order, PSI will be filing for future CWIP updates.

PSI first petitioned the commission for a rate increase in November 1992. The case was delayed several times due to PSI's merger and defense against a hostile takeover attempt.

Now that the settlement has been reached, a hearing before the commission has been proposed for Jan. 18, 1995. The hearing will be an opportunity for the commission to review the settlement.

A second rate request, announced last July, is still pending before the commission. The company has not yet filed testimony in that case, initially estimated at about 8 percent. That case primarily covers PSI's Clean Coal Gasification project at the Wabash River Generating Station and the new scrubber to remove sulfur dioxide emissions at Gibson Generating Station.

PSI Energy serves more than 617,000 customers in 69 of Indiana's 92 counties. PSI is a subsidiary of CINergy Corp., which includes The Cincinnati Gas & Electric Co. that serves electric and gas customers in Indiana, Ohio and Kentucky.

CONTACT: PSI Energy, Plainfield

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