More than three years after NIPSCO filed its first electric rate case—and more than a year after the Indiana Utility Regulatory Commission (IURC) authorized a 16.8 percent rate hike, the public outcry over which prompted NIPSCO to promptly backtrack and file a second case—the odyssey has ended.

On Wednesday, the IURC approved a collaborative settlement reached in July by NIPSCO, the Indiana Office of Utility Consumer Counselor (OUCC), NIPSCO’s industrial customers, and a coalition of municipalities.

That settlement puts into immediate effect new electric rates for NIPSCO’s more than 457,000 electric customers across Northern Indiana.

Brass tacks: under that settlement, the average household using 688 kilowatt hours per month will see a $3.33 or 4.45 percent increase in its monthly bill, from $74.88 to $78.21.

That 4.45-pecent hike is a far cry from the 16.8 percent hike authorized in August 2010 by the IURC and significantly less still than the 7.9-percent hike which NIPSCO sought in a second rate case filed late last year, after the OUCC and other parties objected loudly to the IURC’s original order.

For the record, the 16.8-percent increase was never actually applied to customers’ bills.

“The newly approved electric base rates—which have not been modified in 24 years—are being updated to reflect investments made to improve service reliability and environmental technology, including the $330 million purchase of the highly efficient Sugar Creek natural gas-fired power plant in West Terre Haute, Ind., as well as costs associated with customer growth, system upgrades and ongoing maintenance,” NIPSCO said in a statement released late on Wednesday.

“This decision is a pivotal step in furthering our commitment to enhance reliability and customer service for our customers, while providing a modern energy infrastructure to support northern Indiana jobs and economic growth,” NIPSCO CEO Jimmy Staton said. “The approved settlement also helps provide families, businesses, and industries with the reliable, affordable and environmentally sustainable energy they need now and in the future.”

NIPSCO said that the IURC’s order on Tuesday will benefit customers in several ways:

•“A lower bill increase than what was originally requested.”

•“A platform for ongoing NIPSCO investments in improving customer service, reliability, and environmental technology.”

•“NIPSCO-funded rebates to convert electric furnaces to more efficient natural gas units.”

•The resolution of municipalities’ “concerns regarding rates for streetlights and traffic lights.”

•“An expanded interruptible service program for NIPSCO's largest industrial customers. This voluntary program ultimately benefits all customers by meeting near-term and planned system energy needs, including periods of peak demand when market prices are high.”

“While providing a much smaller base rate increase than originally requested, this agreement ensures NIPSCO will be able to continue making the infrastructure investments that will be needed for safe, reliable service,” Indiana Utility Consumer Counselor David Stippler said. “I am pleased that the OUCC, NIPSCO, and other settling parties were able to work together to reach a balanced resolution to this extremely complicated litigation.”

“We believe the concerns raised by the local municipalities were addressed through this process, which was both open and collaborative,” said Michael Griffin, representing the municipalities of Dyer, East Chicago, Griffith, Highland, Munster, Schererville, Valparaiso, and Winfield. “This agreement provides a reasonable solution for local communities across northern Indiana working hard to manage very tight and resource-challenged budgets.”

Maintaining electric rates below the U.S. average NIPSCO anticipates that the decision will help the company maintain electric rates below the national average, NIPSCO said. “According to the most recent Edison Electric Institute’s survey of electric rates, NIPSCO’s residential, commercial and industrial electric rates are below the average price nationally for electricity and near the Indiana average.”

Natural gas rates and charges are not at issue in this case.

“Ensuring that rates for business customers remain affordable and competitive is important,” NIPSCO said. “The impact on individual commercial and industrial customers will vary. Many factors determine commercial and industrial customers’ rates. On average, rates for commercial and industrial customers would increase approximately 4.8 to 11 percent per month compared with current bills.”

Ironically, the IURC’s August 2010 order authorized an electric rate hike of only around 4 percent for industrial and commercial customers, while NIPSCO for its own part had justified its first rate case in part on the ground that industrial and commercial customers for years have been paying more than their fair share of the cost of electric service and in fact have been subsidizing residential customers.

NIPSCO did say that folks can lower their electric bills in a number of ways, like participating in the company’s Appliance Recycling program, under which a customer earns $35 by recycling an old refrigerator or freezer and then saving another $100 in energy costs by running a more efficient appliance.

See nipsco.com/SaveEnergy for more ideas. A copy of the IURC’s decision will be available at https://myweb.in.gov/IURC/eds/ and searching for Cause No. 43969. It will also be available at www.in.gov/oucc/2643.htm

For more information about NIPSCO’s rates and this filing, customers are encouraged to visit NIPSCO.com and the OUCC’s Website at www.IN.gov/OUCC

Posted 12/22/2011