Banner Graphic, Volume 15, Number 86, Greencastle, Putnam County, 13 December 1984 — Page 3

Gov. Orr quick to reject recommendation for CWIP T ur.int trv rrot it this mnr- —SharpH nwnprshin of DOWer DrodllCtion

GOV. ROBERT ORR Rejects CWIP plan

Wait for all recounts, he says McCloskey asks delay in Bth decision

INDIANAPOLIS (AP) Secretary of State Edwin J. Simcox should await recount results from all 15 counties in the Bth Congressional District before declaring a winner, Rep. Frank McCloskey, D-Ind., says. For Simcox to certify fellow Republican Rick Mclntyre the winner based only on new results from Gibson County would be “a farce, a political sore point,” McCloskey told reporters Wednesday. Simcox has said he would declare Mclntyre the winner as soon as he gets corrected vote totals from Gibson County. The Bth, where more than 233,000 people voted Nov. 6, is the only congressional race

Administration wants to use funds on highways

INDIANAPOLIS (AP) - The Orr administration wants to tap Indiana’s general fund for $45 million a year for road and bridge construction each of the next two years. In the two-year budget period ending June 30,1985, the general fund is providing about SB9 million for highways. But more than $75 million of that figure was appropriated only for the current fiscal year, which started July 1. And much of that money was spent to qualify the state for increased federal aid. The State Budget Committee, which is considering agencies’ requests for 1985-87 funding, agreed with the administration’s proposal to continue assisting Indiana Department of Highways programs. Funding for those programs is primarily from gasoline taxes and other state revenue earmarked for road and bridge improvement and repair.

Tax policies toughening?

INDIANAPOLIS (AP) The state should adopt better tax auditing and tougher penalties for delinquents to encourage people to pay taxes on time, the Commission on State Tax and Finance Policy recommends. It prefers those methods to the amnesty programs offered in some states under which penalties, prosecution and interest payments are waived if overdue taxes are paid, the agency said. It said amnesty programs produce a negative reaction in “honest taxpayers.” The commission issued a report this week which will be forwarded to the

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INDIANAPOLIS (AP) A key recommendation by a panel he appointed to study Indiana’s utility regulatory system has drawn a quick veto from Gov. Robert D. Orr. Orr received the 140-page report from the Governor’s Committee on Indiana’s Utility Future and immediately announced he rejected its plan to allow electric utilities to charge for construction work in progress. “I am convinced that any inclusion of CWIP will only serve to distract everyone from the important contents of this report,” Orr told reporters. CWIP has been the main utility battleground in the Legislature for the last 10 years. Under current law, electric companies cannot charge customers for plants until the plants are “used and useful” actually in service and needed to meet customer demand for power. The nine-member committee recommended that CWIP be permitted for future plant construction not those currently on the drawing board. The committee said that by financing plants on a “pay-as-you-go basis,” accumulations of “carrying

in the nation without an official winner. Returns certified Monday by a Gibson County recount commission gave Mclntyre a 34-vote lead over McCloskey, who had led by 72 votes in original returns from the district. McCloskey lost 106 votes when a Gibson County vote-counting error was corrected. Meanwhile, other recounts are underway in Martin, Vanderburgh, Posey and Daviess counties. Bill Finch, an aide to McCloskey, said Wednesday the congressman had experienced a net loss of six votes in Vanderburgh County and 15 in Martin to place him 54 votes behind Mclntyre in the

The committee rejected the administration’s request to add 62 people to the highway department payroll for con-struction-related work. The cost would have been $1.7 million. The committee said the money should be allocated to construction contracts. The $45 million annual appropriation would reduce, but not prevent, funding shortfalls. The highway department warned of these even if it just tries to do the same amount of work the next two years as in 1983-85. Michael Fiwek, an analyst with the State Budget Agency, who presented the administration’s proposal, said the department still faces shortfalls of $49 million in 1985-86 and s7l million the next year. The State Transportation Coordinating Board last week proposed funding that would overcome the shortfall and also allow a long-range program.

Legislature. Tax law compliance could be improved by updating both the auditing procedures used to investigate tax evasion and delinquency and the data processing capabilities of the State Revenue Department and by increasing penalties for noncompliance, according to the report. The commission, headed by Rep. Patrick Kiely, R-Anderson, estimated that one-time state income tax credits of SSO to SSOO for Vietnam veterans would cost the state between $2.6 million and $26 million. The commission made no recommendation on that item.

state

charges” could be eliminated and the cost to ratepayers would be lower. CWIP would also tend to eliminate “rate shock” caused when the cost of a new plant is finally added to a utility’s rate base, the report said. At a Statehouse news conference, Orr formally accepted the report developed by the committee he appointed last year and said he hoped it would be a basis for reform legislation in the 1985 General Assembly. Committee chairman Dan Evans said the recommendations were designed to give utilities incentives to operate es-

district. McCloskey predicted the lead would shift between the two men many times before the recounts are completed. To be consistent, Simcox must either make a new certification every time that lead changes or refrain from declaring a winner until all the recounts are finished, McCloskey said. Simcox was out of the office Wednesday. His election deputy, Craig Campbell, declined to comment on McCloskey’s request. McCloskey said he hopes that the recounts will be completed before Christmas, possibly by Dec. 20, well in time for

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ficiently, to protect ratepayers and to foster a statewide environment for economic growth. “I think they’re all rational and they’re all reasonable,” Evans said of the recommendations. Lt. Gov. John M. Mutz said the report “does send a positive signal to the business community and potential investors in the state of Indiana” that government is serious about having well regulated utilities at reasonable rates. Asked why the committee recommended CWIP, Evans replied, "If the governor chooses not to support it for political

the seating of the new Congress Jan. 3. “They are trying to get him (Mclntyre) seated with this spurious certification,” McCloskey said. Even though the dispute may ultimately wind up in the Democratic-controlled U.S. House, McCloskey said it does make a difference who is the state-certified winner in the district. “The presumption is in favor of the certification. It places that person in a stronger position to be sworn in,” he said. But beyond this race, McCloskey said, the real problem is “the total instability and opportunity for chaos in Indiana’s election laws as far as judgirfg races.”

December 13.1984, The Putnam County Banner-Graphic

reasons, I don’t want to get into it this morning.” Under persistent questioning by reporters, Orr remained adamant, saying, “a debate on CWIP is to no purpose in terms of the implementation of these recommendations.” Mutz was more blunt in his response to why CWIP would not be part of the administration’s recommendations. “CWIP will not pass the General Assembly,” he said. As an alternative to minimize rate shock, the committee said the Public Service Commission should consider “trended” rates which would phase in increases gradually. The committee also recommended: —Annual statewide forecasting of electricity demand. Currently, this is done utility by utility according to its service area. —Developing a statewide power pool with a system of economic dispatch. That would enable electricity to be “wheeled” between utilities according to need, so that power would be dispatched from the cheapest source available at any time.

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—Shared ownership of power production facilities to minimize cost. —Refurbishing outmoded power plants instead of building new, more costly ones. —lmplementing a modified future test year for setting utility rates. The PSC would set rates based on operating cost goals it wants the utility to attempt to meet. It would also set a range of rates of return that a utility could earn during the period. Thus, if a utility operated efficiently and saved expenses, it could keep that extra return for its stockholders provided it was within the range set by the PSC. —Utility property should be valued, for rate-setting purposes, on the basis of its original cost, not according to its fair market value. —Adoption of simplified regulatory procedures for small utilities. —Removing municipal utilities from PSC jurisdiction. —Taking transportation regulation away from the PSC and placing it under the jurisdiction of the Department of Transportation.

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