Business and Economics

Public Comments Sought On NIPSCO Electric Improvements

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September 9, 2013 — The Indiana Office of Utility Consumer Counselor is inviting written comments from NIPSCO customers on the utility’s $1.07 billion plan for electric transmission, distribution and storage system improvements.  This includes NIPSCO’s request for incremental electric rate recovery of the costs as the projects proceed, through a new rate adjustment mechanism.

The OUCC – the state agency representing consumer interests in cases before the Indiana Utility Regulatory Commission  – is reviewing the utility’s plan and has not yet taken a position in the pending IURC cases. The OUCC anticipates completing its review and filing testimony on October 11, 2013.

NIPSCO’s request is the first to be filed under a new Indiana law, Senate Enrolled Act 560, which the Governor signed into law earlier this year.       The law allows an investor-owned electric or natural gas utility to seek IURC approval of a seven-year infrastructure improvement plan.
If the plan is approved, the utility may then adjust rates every 6 months, subject to IURC and OUCC review, to recover project costs as they are incurred.   The rate adjustments – under a new Transmission, Distribution, and Storage System Improvement Charge (TDSIC) mechanism – may not exceed two percent of the utility’s total retail revenues each year.
Twenty percent of the costs must be deferred until the utility’s next base rate case, which must be filed before the end of the seven-year period.

In IURC Cause No. 44370, NIPSCO is seeking approval of its proposed seven-year plan.

According to the utility’s testimony, the proposed projects throughout its electric service territory would be built from 2014 through 2020.
Projects would include new transmission and distribution lines, new substations, upgrades to existing lines and substations, and replacement of aging poles, transformers, line equipment and other infrastructure.
Under the new law’s timing requirements, the IURC must issue a final order no later than February 14, 2014.

In IURC Cause No. 44371, NIPSCO is seeking establishment of the methodology for calculating rate recovery for future costs.

The total cost for capital improvement projects in the seven-year plan is approximately $1.07 billion.
According to NIPSCO’s testimony, annual rate increases through the TDSIC mechanism would average 0.9 percent each year over the seven-year term.
The first increase of 0.4 percent would take effect in 2015.
Increases would grow each year, reaching 1.7 percent in 2020.

A number of additional parties have formally intervened in these cases and are also expected to file testimony on October 11, 2013. They include the Indiana Municipal Utility Group, which includes eight cities and towns in Lake and Porter counties, the LaPorte County Board of Commissioners, the Citizens Action Coalition of Indiana, the Hoosier Environmental Council, and the NIPSCO Industrial Group, which includes BP Products North America, Inc., Praxair, Inc. and USG Corporation.

This proposal – referred to by NIPSCO as its Electric Infrastructure Modernization Plan – would not affect NIPSCO’s natural gas utility’s system, service or rates.

An IURC technical evidentiary hearing in these cases is scheduled to start November 12, 2013 at the PNC Center, 101 W. Washington St. in Indianapolis. While evidentiary hearings are open to the public, participation is typically limited to attorney and Commission questioning of expert witnesses who have filed technical testimony on behalf of the case’s formal parties.

For more information on these cases and the new law, please visit

Consumers who wish to submit written comments may do so via the OUCC’s Website at, or by mail, email or fax:

Mail: Consumer Services Staff
Indiana Office of Utility Consumer Counselor
115 W. Washington St., Suite 1500 South
Indianapolis, IN 46204
Fax: (317) 232-5923

ritten comments the OUCC receives by October 4, 2013 will be filed with the Commission and included in the cases’ formal evidentiary records. Comments should include the consumer’s name, mailing address, and a reference to “IURC Cause Nos. 44370 & 44371.”

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