On January 27, 2010, Indiana Michigan Power Company (I&M) filed a request with the Michigan Public Service Commission to change base rates. The Company is proposing to increase rates by $62.5 million. This increase is based on the forecasted test year of twelve months ended December 31, 2010.

The requested revenue requirement covers increased costs related to distribution O&M, taxes, interest and employee related expenses. In addition, the revenue requirement includes requested recovery through tracker mechanisms of enhanced distribution reliability expenditures ($2.6MM), gridSMART program cost recovery ($1.5MM), net loss revenue recovery ($1.2MM), and requested a modification to the mechanism by which off-system sales margins are shared between customers and the company ($5.1MM).

Also included is a proposed tariff which will provide for the adjustment of monthly electric bills for the difference between a base level of transmission-related costs included in base rates and the going level of transmission-related costs as charged by PJM ($4.7MM).