NIPSCO Requests First Rate Hike in Five Years

Northern Indiana Public Service Company (NIPSCO) submitted a request (Docket No. 4468) to the Indiana Utility Regulatory Commission (IURC) on October 1 seeking to raise electric base rates – a change that must go through a thorough regulatory review process and will not take effect until mid-2016.

As Indiana's second- largest electric distribution company, NIPSCO serves about 460,000 electric customers across 32 counties. Under the utility’s filing, residential electric bills would rise by $10.53 a month – from $91.63 to $102.16, based on the typical amount used by residential customers. Customers can calculate how the rate hike would affect their individual bill based on their actual usage at NIPSCO.com/rates.

The impact on individual commercial and industrial customers will vary depending on their usage patterns; but ,on average, rates for C&I customers would increase about 7 percent to 9 percent, when compared with today's bills.

NIPSCO’s last request to change base rates was five years ago, and the utility said that the price of providing service has catapulted since that time – providing the following examples of investments made in infrastructure:

• $95 millionin system upgrades to increase reliability (replacing poles, lines, constructing new substations, etc.);
• $90 million to replace all meters to eliminate estimated billing;
• $8.5 million in technology upgrades to improve response time and introduce options for customers to be better informed during power outages;
• Increased labor and material costs; and
• Higher costs to generate electricity associated with operating and maintaining newly installed equipment to comply with federal environmental regulations to improve air/water quality.

In addition, the company said, it is proposing a new low-income assistance program for summer electric assistance – when electric usage is typically at its highest point. The mechanics of the program will be determined in the review process, but it will be comparable in nature to the existing winter heating assistance program that NIPSCO and other Indiana utilities offer.

"Customers deserve and depend on reliable electricity at a fair price," said NIPSCO President,Violet Sistovaris. “Our proposal works to strike the right balance of cost and service, so that we can provide the level of service customers expect."

In Indiana, where energy costs are relatively low when compared to the Midwest and the nation, NIPSCO has held the line on electric rate increases “better than any other Indiana utility during the last decade,” the utility said – pointing to IURC annual residential bill surveys. The average bill in Indiana has increased approximately 5 percent annually, while NIPSCO bills have increased at 3 percent annually.