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Indiana Office of Utility Consumer Counselor

Indiana Office of Utility Consumer Counselor

OUCC > Electric > Key Cases By Utility > NIPSCO Electric Infrastructure Plan NIPSCO Electric Infrastructure Plan

In a July 12, 2016 order, the IURC approved a seven-year plan for electric transmission, distribution and storage system improvements for Northern Indiana Public Service Company (NIPSCO), including incremental rate recovery of those costs as the projects proceed.

While the utility had originally proposed a $1.33 billion plan, the Commission's order approved a settlement agreement that will cap rate recovery for the plan's projects at $1.25 billion. For a summary of the agreement, please see the March 25, 2016 news release.

The OUCC issued a February 17, 2016 news release to invite written consumer comments.

NIPSCO filed its request under a law (Senate Enrolled Act 560) passed by the Indiana General Assembly in 2013.

This proceeding is separate from NIPSCO's recent base rate case.

NIPSCO's first requested rate adjustment under the plan is pending. According to the utility's testimony, it would raise the monthly residential electric bill for a customer using 698 kWh by 24 cents (or by 34 cents for a residential customer using 1,000 kWh). The OUCC is scheduled to file testimony on the tracker request on October 10, 2016.

 

A brief summary of the 2013 law

Indiana Code 8-1-39 allows electric and natural gas utilities to submit 7-year infrastructure improvement plans for IURC approval. It requires the IURC to rule within 210 days once such a request is filed.

  • Once a 7-year plan receives IURC approval, the utility may request incremental rate increases every 6 months to pay for the projects. The rate adjustment is referred to as the Transmission, Distribution and Storage System Improvement Charge (TDSIC). The IURC has 90 days to rule on such a request.
  • TDSIC rate increases are limited to no more than 2 percent of a utility's total retail revenues.
  • The TDSIC rate mechanism (or tracker) allows the utility to recover 80 percent of the costs as they are incurred. The remaining costs are deferred until the utility's next base rate case, which must be filed before the end of the 7-year period.

 

Approved NIPSCO request

All public filings in the case are available by visiting the IURC's Electronic Document System and entering docket number 44733.

According to the utility's testimony and exhibits:

  • Projects throughout NIPSCO’s electric service territory include breaker and relay replacements, replacement of aging infrastructure (including transformers, substations, poles, and lines), and the replacement of municipal streetlights with light emitting diode (LED) technology.
  • Under the utility's plan as proposed, the projected annual rate increase amounts from 2017 through 2022 would vary by year, ranging from 0.4 percent to 1.3 percent annually. The average annual percentage increase over the 7-year term was projected at about 0.9 percent.

 

Previous NIPSCO request

The recent case was NIPSCO's second proposal for a 7-year electric system improvement plan. Its first request received IURC approval but is no longer in effect following further proceedings before the Indiana Court of Appeals and the IURC.

NIPSCO filed its original plan in July 2013, in IURC Cause No. 44370. In a separately filed case, IURC Cause No. 44371, NIPSCO requested establishment of the methodology for calculating rate recovery of future costs.

Further proceedings were conducted before the Indiana Court of Appeals, in which the filed its brief in August 2014. The Court issued its opinion in April 2015.

In a May 2015 settlement agreement, as described here, NIPSCO agreed to refund all money previously collected under the TDSIC tracker.

The IURC issued orders on remand in September and December 2015.

All filings in the cases are available by visiting the IURC's Electronic Document System and entering the appropriate docket number.

 

This page will be updated based on future developments.

 

NIPSCO has received approval of its 7-year natural gas infrastructure plan in a separate case.

9-26-16