The Indiana Office
of Utility Consumer Counselor (OUCC), industrial customers, the LaPorte
County Board of Commissioners, the Indiana Municipal Utility Group, and
Northern Indiana Public Service Company (NIPSCO) have reached a settlement
agreement on the utility's proposed seven-year infrastructure improvement
If approved by the
Indiana Utility Regulatory Commission (IURC), the agreement will reduce the
capital costs for infrastructure investments by $80 million, which are
subject to recovery from customers through periodic rate hikes.
* Reduction of the
plan's capital costs eligible for rate hikes from $1.33 billion to $1.25
billion, including annual caps on such rate hikes.
* A retrofit
project for the replacement of utility-owned streetlights with energy
efficient LED lighting throughout NIPSCO's electric service territory. Costs
will be divided evenly between municipalities and customers.
* A 9.975 percent
return on equity (ROE) for eligible plan investments made during the
* Up to $3.5
million for an economic development project at the Kingsbury Industrial Park
in LaPorte County.
This is the second
time NIPSCO's electric utility has sought IURC approval of a seven-year
infrastructure plan under Indiana's 2013 Transmission, Distribution, and
Storage System Improvement Charge (TDSIC) statute, which allows for
expedited cost recovery of capital improvement projects under an approved
plan. Projects that are eligible for TDSIC rate recovery include line and
pole replacements, the installation of new transformers and substations, and
other capital expenditures to replace aging transmission and distribution
electric plan received IURC approval in 2014 but was set aside by the
Indiana Court of Appeals in 2015 and remanded to the IURC for further
opinion and subsequent IURC orders in similar cases have provided additional
guidance with regard to the disposition of proceedings under the 2013 law.
With that guidance in place, the OUCC and additional parties have negotiated
an agreement that balances consumer concerns with NIPSCO's need to upgrade
the safety and reliability of its transmission and distribution systems,"
said Indiana Utility Consumer Counselor David Stippler. "The agreement will
ensure that the plan's projects will proceed in the most cost-effective
manner possible, while allowing the utility to make the infrastructure
investments that will strengthen its grid for many years to come."
"There is a
critical need to modernize and upgrade the energy infrastructure," said
NIPSCO executive vice president Violet Sistovaris. "Through smart
investments and proactively replacing aging parts of our electric system,
this plan is about ensuring that our customers have the safe, reliable, and
affordable source of energy they depend on today and into the future."
Natural gas rates
and infrastructure are not at issue in this case.
parties will file testimony in support of the infrastructure agreement in
the near future.
Any agreement filed
with the IURC may be accepted, modified, or rejected.