Northern Indiana Public Service Company (NIPSCO) has received Indiana Utility Regulatory Commission (IURC) approval of a long-term plan for electric transmission, distribution and storage system improvements, including incremental rate recovery of those costs as the projects proceed. The utility refers to the program as its Electric Infrastructure Modernization Plan.
NIPSCO's request was the first to be filed under a new law (Senate Enrolled Act 560) passed by the Indiana General Assembly in 2013.
The Indiana Office of Utility Consumer Counselor's (OUCC's) testimony in these cases is summarized in its October 11, 2013 news release. Links to the testimony are available below.
The IURC issued orders on the 7-year plan and the methodology for calculating cost recovery on February 17, 2014.
On March 10, 2014, the OUCC filed a petition for reconsideration, which was denied on May 7. The OUCC has appealed the Commission's order to the Indiana Court of Appeals.
A brief summary of the new 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 total retail revenues each year.
- 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.
NIPSCO filed its 7-year electric system improvement plan on July 19, 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 with the first rate increase expected in 2015.
According to the utility's testimony and exhibits:
- The 7-year plan has a total of about $1.07 billion in capital improvement projects, including $314.2 million in transmission projects, $544.5 million in distribution projects, and $214 million in overhead and economic development.
- Projects throughout NIPSCO's electric service territory include new transmission and distribution lines, new substations, upgrades to existing lines and substations, and replacement of aging infrastructure (such as poles, transformers, etc.).
- Construction is scheduled start in 2014 with a proposed electric rate increase of approximately 0.4 percent in 2015. The annual rate increase amounts are projected to grow over the course of the plan, reaching 1.7 percent in 2020. The average annual percentage increase over the 7-year term is 0.9 percent.
NIPSCO is requesting approval of a 7-year natural gas infrastructure plan in a separate case filed on October 3, 2013.
NIPSCO's July 19, 2013 filings include:
All filings in both cases are available by visiting the IURC's Electronic Document System and entering the appropriate docket number.
OUCC review & testimony
The OUCC issued a September 6, 2013 news release to invite consumer comments and filed the following testimony on October 11, 2013:
Cause No. 44370: Smith (18 pages)
Cause No. 44370: Eke (13 pages)
Cause No. 44370: Rutter (14 pages)
Cause No. 44371: Bolinger (39 pages)
Cause No. 44371: Blakley (14 pages)
Cause No. 44371: Hand (13 pages)
Cause No. 44371: Eckert (14 pages)