A state consumer agency is recommending denial of the rate increase sought by the Northern Indiana Public Service Co.

The Indiana Office of Utility Consumer Counselor (OUCC), the state agency that represents residential and business consumer interests in cases before state and federal utility regulatory commissions, filed formal testimony Friday against NIPSCO's requested rate hike.

The OUCC presented its recommendations to the Indiana Utility Regulatory Commission, which will decide NIPSCO's rate increase request.

NIPSCO is seeking an $85.7 million increase in its annual base electric rate revenues. The OUCC says it is recommending a revenue reduction of $135.2 million; however, because of the expiration of monthly residential rate credits and special contract rates for industrial customers, the base electric rates paid by NIPSCO residential customers would remain at or near their current levels under the OUCC's recommendations.

"Our team of attorneys and technical experts has been working diligently in examining NIPSCO's request since the utility filed its case-in-chief last August," said Indiana Utility Consumer Counselor David Stippler. "We have been listening to the concerns voiced by numerous NIPSCO customers over the last eight months, and the case which we have filed before the IURC represents the culmination of what we have learned in conducting our review of NIPSCO's request on behalf of the rate paying public."

The OUCC's key recommendations include: Significant decreases in NIPSCO's requested cost recovery for depreciation, return on investment, aging workforce expenses and gasoline/diesel fuel; an authorized return on equity of 10 percent; and a six-year amortization of rate case expenses instead of the three-year amortization NIPSCO requests.

The OUCC's testimony in this case is focused on NIPSCO's overall revenue requirement for its electric utility. Specific billing impact will vary among residential, commercial and industrial rate classes.

The outcome of this case will only affect the base rates for NIPSCO's electric utility. Electric base rates typically cover a utility's infrastructure, operating and maintenance costs.

An electronic copy of the OUCC's testimony is available online at www.in.gov/oucc/2457.htm

Posted 5/11/2009