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Agreement in NIPSCO Electric Infrastructure Case Will Cut Ratepayer Costs

March 30, 2016 By Cheryl Kaften

The Indiana Office of the Utility Consumer Counselor (OUCC), industrial customers, the LaPorte County Board of Commissioners, the Indiana Municipal Utility Group, and Northern Indiana Public Service Company (NIPSCO) announced on March 24 that they had reached a settlement agreement on the utility’s proposed seven-year infrastructure improvement plan.

NIPSCO, one of seven energy distribution companies of NiSource, serves 821,000 natural gas customers and 468,000 electric customers across the northern third of Indiana. This case concerns the electric customers only.

If approved by the Indiana Utility Regulatory Commission (IURC) (Cause No. 44733), the agreement will reduce the capital costs for infrastructure investments by $80 million, which are subject to recovery from customers through periodic rate tracker increases.

That means that Indiana ratepayers are likely to see a reduction of the plan’s capital costs eligible for periodic rate recovery from $1.33 billion to $1.25 billion, including annual caps on such rate recovery.

This is the second time NIPSCO’s electric utility has sought IURC approval of a seven-year infrastructure plan under Indiana’s 2013 Transmission, Distribution, and Storage System Improvement Charge (TDSIC) statute, which allows for expedited cost recovery of capital improvement projects under an approved plan. Projects that are eligible for TDSIC rate recovery include line and pole replacements, the installation of new transformers and substations, and other capital expenditures to replace aging transmission and distribution system infrastructure.

NIPSCO’s original electric plan received IURC approval in 2014 but was set aside by the Indiana Court of Appeals in 2015 and remanded to the IURC for further proceedings.

“The Court’s opinion and subsequent IURC orders in similar cases have provided additional guidance with regard to the disposition of proceedings under the 2013 law. With that guidance in place, the OUCC and additional parties have negotiated an agreement that balances consumer concerns with NIPSCO’s need to upgrade the safety and reliability of its transmission and distribution systems,” said Indiana Utility Consumer Counselor David Stippler. “The agreement will ensure that the plan’s projects will proceed in the most cost-effective manner possible, while allowing the utility to make the infrastructure investments that will strengthen its grid for many years to come.”

“There is a critical need to modernize and upgrade the energy infrastructure,” said NIPSCO executive vice president Violet Sistovaris. “Through smart investments and proactively replacing aging parts of our electric system, this plan is about ensuring that our customers have the safe, reliable, and affordable source of energy they depend on today and into the future.”

The settling parties will file testimony in support of the infrastructure agreement in the near future.

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