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IURC Approves NIPSCO Electric Rate Settlement

July 20, 2016 By Cheryl Kaften

On July 18, the Indiana Utility Regulatory Commission finalized the approval of a collaborative agreement (Cause No. 44688) reached on February 19 by Northern Indiana Public Service Company (NIPSCO), the Indiana Office of Utility Consumer Counselor (OUCC), NIPSCO’s industrial customers, a coalition of eight northern Indiana municipalities, and the United Steelworkers, with no opposition from La Porte County regarding new base rates for electric customers – the first such change since 2011.

The newly approved rate increase – which represents about half of NIPSCO’s original request of 11 percent – would increase the electric bill of the average residential customer by $5.70 per month, or about 6 percent.

The change for individual commercial and industrial (C&I) customers will vary depending on their usage patterns – but on average, commercial and smaller industrial customers would see an increase of about 5 percent to 6 percent. It will be effective with the delivery of NIPSCO’s October bills.

The agreement also reduced a proposed fixed charge to $14.

NIPSCO claims to serve a particularly large base of C&I customers. In its filing, the public utility said, “During the 12 months ended March 31, 2015, NIPSCO delivered more than 17.7 billion kilowatt-hours (kWh) of electricity to more than 461,000 residential, commercial, industrial, wholesale, and other customers in accordance with its tariffs, rules and regulations. More than 50 percent of that electricity was provided to NIPSCO’s industrial customers – making its proportion of industrial load among the highest in the industry.”

Since is 2011 rate case, the company said its cost of providing service has increased. “NIPSCO has and must continue to make significant capital expenditures for additions, replacements and improvements to its utility property, both as a result of environmental mandates and to maintain safe and reliable service,” the filing said. “In addition, changes in the service lives of NIPSCO’s utility property warrant the implementation of revised depreciation rates. Further, NIPSCO has and must continue to incur increasing operation and maintenance expenses in order to maintain safe and reliable service. It is necessary and appropriate to recognize these and other costs of providing retail electric service by establishing new rates and charges.”

The IURC’s decision follows a nearly 10-month review process, which includes direct input from customers and a range of consumer groups. This resolution provides several benefits to customers, including:

  • A smaller overall bill impact and substantially reduced monthly customer charge increase for residential, commercial, and industrial customers when compared to the original proposal;
  • A platform for NIPSCO’s continued reliability investments and service improvements for customers;
  • A new LED streetlight rate, which supports a new, recently approved LED streetlight conversion program for municipalities; and
  • Expansion of an interruptible incentive program for industrial customers.

“Customers want to be certain they’re receiving quality service at a price that’s fair,” commented Violet Sistovaris, NIPSCO executive vice president.  “We believe these newly approved electric rates represent a balanced outcome that allows us to continue improving the level of service to our customers.”

“The agreement approved today provides a fair resolution for NIPSCO’s residential and commercial customers, along with NIPSCO’s industrial customers that are crucial to Northwest Indiana’s economy,” said Indiana Utility Consumer Counselor David Stippler. “The OUCC and additional parties negotiated more than $54 million in consumer benefits, reducing the rate impact while ensuring that the utility has the revenues necessary to provide safe and reliable service to all of its electric customers.”

Natural gas rates were not at issue in this case.

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