Service Territory Boundaries

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Priority: Protect the service territories of member cooperatives

Issue: Maintain fair and equitable electric service territories that are in the best interest of all ratepayers.

Call for action: Indiana Electric Cooperatives urges the Indiana legislature to enact legislation that protects the electric cooperatives’ service territory boundaries and supports a fair and balanced transfer of territory in the best interest of all ratepayers.

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Since the 1930s electric cooperatives have served as a backbone for rural Indiana, providing safe, reliable and affordable power to the rural areas formerly without electric service. The cooperative business model has allowed for consumer ownership and control, while providing electricity at the most affordable rate possible. Preserving service territories is essential to the survival of Indiana’s electric cooperatives.

As the rural community expands and becomes more vibrant, that same territory becomes more attractive for cities and towns to annex into their footprint. As the service territory is annexed, municipal electric providers are able to simply take control of the territory with very little resistance. The incumbent utility is forced to incur numerous man hours and legal fees to defend what they have fought so hard to build and maintain.

As electric cooperative service territory boundaries shrink there are fewer members to distribute the overhead cost amongst, and electricity rates rise for those remaining. The high emphasis on local economic development in today’s political landscape should not come at the expense of the consumer.

Indiana Electric Cooperatives urges the Indiana legislature to enact legislation that protects the electric cooperatives’ service territory boundaries and supports a fair and balanced transfer of territory in the best interest of all ratepayers.

As a state we must continue to:

  • Promote public convenience and necessity
  • Avoid unnecessary duplication of service, waste of resources or inefficient service.
  • Maintain reliability and service quality.
  • Minimize the adverse effects on rates paid by consumers inside and outside of the newly assigned territories.

We want to protect the left-behind consumer who is saddled with a larger share of fixed costs when cities and towns “cherry pick” the most profitable loads off an incumbent system.