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MERRILLVILLE, Ind. - Northern Indiana Public Service Company (NIPSCO) is asking for highter electric rates. In a press release the company said that it is the first comprehensive rate hike case in more than 20 years. NIPSCO "proposes a change in rates to reflect the increased cost of operating the utility since its last rate case, as well as the company’s need to invest . . . to enhance reliability and meet growing customer demand for electricity," the statement said. Under the company’s proposal, NIPSCO would adjust rates in two steps. The company estimates that, If approved, a typical NIPSCO residential electric customer would see an increase of approximately $7.24 in their monthly electric bill for the first step of the proposal, with an additional $5.90 month increase at the time of the second step of the increase. Step one includes an overall 2.7 percent base rate increase to recover increased operating and maintenance costs. Step two requests an additional 9 percent overall base rate increase to reflect the addition of the Sugar Creek Generating Station to NIPSCO's rate base when it becomes available to serve NIPSCO customers, no later than June 2010.“NIPSCO has aggressively managed its costs for providing electric service over the past 20 plus years while providing a high level of customer service,” said Eileen O’Neill Odum, Group CEO for Northern Indiana Energy (NIE).
Plan Would Simplify Rates Offer Off-Peak Incentives As part of its efforts to make rates easier to understand and administer, NIPSCO is proposing to reduce the number and complexity of rate categories. These redesigned rate structures will promote more efficient use of energy. The company also is proposing more rate incentives for customers to shift their usage from peak to off-peak hours. Reliability Issues NIPSCO’s rate case filing addresses a number of steps the company is taking in support of its mission to provide safe and reliable service to meet customers’ needs. The most significant of these recent steps was NIPSCO’s purchase of the Sugar Creek Generating Station in May 2008. “The purchase of Sugar Creek was a significant step forward in solidifying NIPSCO’s generation capacity position and modernizing our generating fleet,” Odum noted. “The second step of our base rate adjustment will reflect NIPSCO’s investment in the Sugar Creek facility, and is timed to coincide with the availability of that plant to meet our customers’ needs.” The Sugar Creek plant is under contract to provide power outside of the NIPSCO service territory until June 2010. In addition to the purchase of Sugar Creek, NIPSCO’s filing details other steps the company is taking to maintain and increase investments in system improvements, maintenance programs and work management systems designed to enhance the company’s ability to serve customers. The filing also outlines the company’s important new electric employee safety program, as well as the company’s strategy for addressing upcoming transitions in its workforce associated with the anticipated retirement of older workers.
This rate proposal also addresses a change that the electric industry has undergone in transforming from an interconnected network of individual utility systems to an independently managed grid. This new industry structure is intended to support long-haul power transactions, market-based pricing and the economic dispatch of generating units. In the request, NIPSCO proposes updated rate mechanisms that can deal with this new environment. Rate Case a Public Process A rate case is a formal proceeding that all regulated utilities in Indiana must go through in order to make any modifications to their base rates. Included in the process will be participation by interested parties, called intervenors, and the Indiana Office of Utility Consumer Counselor (OUCC), which represents all NIPSCO customers throughout the process. After an extensive review, which can take 12 to 18 months, the Indiana Utility Regulatory Commission (IURC) will make a determination regarding the amount of revenue NIPSCO should have the opportunity to earn, as well as the company’s appropriate rate structure. Hearings on NIPSCO’s case will be held in January 2009. A public field hearing will be held at a time and location to be determined early next year. TIMELINE FOR RATE CASE August 29, 2008 - NIPSCO files it case in chief January 6-23, 2009 - Hearing on NIPSCO's case-in-chief Early 2009 - Public field hearing date to be determined June 12, 2009 - NIPSCO files rebuttal testimony July 27-August 7, 2009 - Final hearing 4th Qtr 2009-1st Qtr 2010 - Expected IURC decision August 2009-Early 2010 - Step 1 rates expected to take effect On or before June 2010 - Step 2 rates expected to take effect
More Background from the NIPSCO release: For additional information and updates please access the NIPSCO website at www.nipsco.com.NIPSCO, with headquarters in Merrillville, Ind., is one of the 10 energy distribution companies of NiSource Inc. (NYSE: NI). With over 712,000 natural gas customers and 445,000 electric customers across the northern third of Indiana, NIPSCO is the largest natural gas distribution company, and the second largest electric distribution company, in the state. NiSource distribution companies serve 3.8 million natural gas and electric customers primarily in nine states. More information about NIPSCO is available at www.nipsco.comCurrently, the NIPSCO generating facilities have a total capacity of 2,787 megawatts (“MW”) and consist of the following separate generation sites: R.M. Schahfer Generating Station, Michigan City, Bailly Generating Station, and two hydroelectric generating sites near Monticello, Indiana. Of the total capacity, 92.4 percent is from coal-fired units, 7.3 percent is from natural gas-fired units and 0.3 percent is from hydroelectric units. As part of the need to expand its existing amount of generating capacity by 1000 MW, NIPSCO recently received approval to purchase the 535-MW combined cycle gas turbine (CCGT) Sugar Creek, located near Terre Haute, Indiana. Additionally, NIPSCO recently added 100 MW of wind power be supplied from Buffalo Ridge I LLC and Barton Windpower LLC, which are both subsidiaries of Iberdrola Renewables. NIPSCO intends to dismantle the 485-MW Dean H. Mitchell generating station, which was indefinitely shutdown in January 2002. Restarting the plant was considered when NIPSCO was looking to add additional generating capacity, however the cost of purchasing one or more CCGT’s was far less expensive than the $587.5 million cost associated with restarting the Mitchell plant. NIPSCO will also retire two natural gas-fired units - Units 2 and 3 - from the Michigan City generating station, as the units have reached the end of their useful life. NIPSCO employs more than 2,500 people in Indiana, ranging from professional and administrative staff to hourly workers such as linemen, power plant operators, mechanics, and construction workers.
Posted 8/30/2008 |
