Media reports of the impending sale of the Northern Indiana Public Service Company’s electric operations have prompted the LaPorte County Commissioners to propose the creation of a public power authority which would acquire those operations instead.

At their meeting on Tuesday, the LaPorte County Commissioners unanimously adopted a resolution which does three things:

•Instructs legal counsel to ensure that “a full and complete review of the merits of any proposed sale . . . is conducted by the Indiana Utility Regulatory Commission and the Federal Energy Regulatory Commission prior to the approval of such transfer and sale and to oppose such sale if evidence does not indicate it is in the public interest.”

•Urges legislators to declare “a moratorium on any sale of NIPSCO’s electric operations until such time as the public interest of such proposed sale” is reviewed by regulators.

•And—the crux of the resolution—also urges legislators to consider the creation of a “northern Indiana public power authority to bid for and acquire the assets of NIPSCO’s electric operations and to then operate and maintain such assets in the public interest as a non-profit entity.”

The resolution notes that “successful public power systems” have been established in Omaha, Neb., and Sacramento, Calif., in addition to the Long Island Power Authority.

“We believe that reliable and cost-affordable electric service is too important to our constituents to trust to an out-of-state utility holding company and that the merits of public power must be carefully and completely considered as a viable alternative for northern Indiana ratepayers.”

President of the Porter County Commissioners Robert Harper, D-Center, told the Chesterton Tribune today that he and his colleagues have not considered adopting a similar resolution. “We’d have to study that,” he said.

On Jan. 24 Bloomberg News and Crain’s Business Chicago both reported, citing unnamed sources, that NiSource Inc., NIPSCO’s parent company, is looking to sell the electric operations for between $3.4 billion and $4 billion, probably to Duke Energy Group, headquartered in Charlotte, N.C.

NiSource has declined to comment on those reports, although on Jan. 30 NiSource President and CEO Robert Skaggs Jr. did say that senior management and the Board of Directors “remain intently focused on completing the strategic and financial review process initiated during 2006 to unlock the underlying value of the company’s asset base and position it for the future.”

Skaggs added that investor and stakeholders would be informed “in a transparent and timely fashion when decisions are made.”

Among other things, the LaPorte County Commissioners‚ resolution made note of the following:

•“NIPSCO’s electric rates are the highest of all utilities in the State of Indiana and the company’s service—as measured by the highly respected rating firm J.D. Power & Associates—remains the worst in the country for customer satisfaction among mid-sized electric utilities.”

•“Continuing consolidations and mergers in the for-profit utility industry have meant further concentration of power and market influence in just a few key utility conglomerates and that one or more of such entities may even be targets for foreign investment and control.”

• “This body is concerned that any prospective sale is being viewed primarily by NiSource corporate officers as a way to reduce the extraordinary $6 billion in debt that still remains from the ill-advised 2000 hostile takeover of Columbia Energy.”

•“It is the captive ratepayers of northern Indiana . . . whose interests should be primarily considered in any asset sale.”

•“NIPSCO’s high rates and poor service are not only a significant burden to residential, commercial, and industrial customers in LaPorte County, but they pose a needless hurdle to our attempts to lure in new business and industry.”

Posted 2/8/2007