NIPSCO and the state’s other jurisdictional electric utilities have been ordered by the Indiana Utility Regulatory Commission (IURC) to create “core demand-side management (DSM) programs” intended to help consumers save energy.

“Through a reasonable but aggressive timeline, the utilities are expected to achieve an annual energy savings goal of 2 percent within 10 years with interim savings goals for years one through nine,” the IURC said in a statement released on Wednesday.

“Due to nonexistent or inconsistent DSM program offerings between the individual utilities, the (IURC) ordered the utilities to move forward with the following core programs: a home energy audit program; low-income weatherization program; residential lighting program; energy efficiency schools program; and commercial and industrial program,” the IURC said.

“DSM programs benefit consumers by saving energy, which is the most cost-effective way of meeting future energy supply needs,” the IURC noted. “It also has the corresponding benefit of reducing the need to build additional generation capacity. The initial core programs should be designed and offered by end of calendar year 2010 for all customers classes—residential, commercial, and industrial.”

The IURC said that it will be issuing to requests for proposals: the first for an independent third-party administrator to oversee and coordinate the utilities’ core programs; the second for an evaluation administrator to under the evaluation, measurement, and verification of the DSM programs to ensure their effectiveness.

Indiana Utility Consumer Counselor David Stippler applauded the IURC’s order in a separate statement released on Wednesday by the Indiana Office of Utility Consumer Counselor, the state agency charged with representing the interests of Indiana’s utility consumers. “Hoosier consumers will benefit greatly from this order,” Stippler said. “Electric utilities under IURC jurisdiction will establish a consistent group of demand side management (DSM) programs that will benefit all of their customers in saving energy in future years. I am especially encouraged that a statewide coordination committee will develop these programs and am also pleased that independent third-parties will be hired to administer and evaluate them. This approach will provide significant opportunities for consistency in program offerings and marketing messages, as well as economies of scale that can ensure these programs operate most efficiently.”

With regard to energy savings as a percentage of utility sales, Indiana ranks 22nd nationally and fourth among the seven Midwest states, the IURC said. For the amount spent on energy efficiency initiatives, Indiana ranks 31st and sixth respectively.