Chesterton Tribune



IURC okays NIPSCO's $1.1B plan to upgrade electric system

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The Indiana Utility Regulatory Commission (IURC) has approved the Northern Indiana Public Service Company’s seven-year, $1.1-billion electric-infrastructure modernization plan.

Under that plan, annual rate increases through a surcharge on customers’ bill--a new “Transmission, Distribution, and Storage System Improvement Charge” (TDSIC)--would average 0.9 percent each year over the seven-year term, with the first increase of 0.38 percent taking effect in 2015 and the last annual increase of 1.7 percent being implemented in 2020.

Revenues from the TDSIC would pay for 80 percent of the project costs as they’re incurred. The remaining 20 percent must be deferred until NIPSCO’s next base rate case, which must be filed before the end of the seven-year period.

The company’s plan--a similar one for natural gas is now pending before the IURC--was made possible by a new Indiana law, Senate Enrolled Act 560, approved in 2013, which permitted investor-owned energy utilities to seek IURC approval of such seven-year plans and to adjust rates every six months to recover 80 percent of project costs as incurred.

“Electricity powers our everyday lives and our future depends on having a safe, reliable, and affordable source of energy,” NIPSCO CEO Jim Stanley said in a statement released on Monday. “We’re planning for the future today through smart investments and replacing critical parts of our electric system to help ensure a more modern system for homes and businesses across Northern Indiana.”

“Vast portions of the nation’s electric system--including NIPSCOs--were built in the post-World War II era,” the statement said. “After more than 50 years, those systems are nearing the limits of their original design, and NIPSCO’s plan proactively addresses these critical areas before they become problematic.”

Modernization projects--scheduled to begin in March--include replacing 450 miles of underground cable which is unjacketed and prone to failure (estimated cost: $140 million); rebuilding 500 miles of electric lines and circuits ($365 million); and replacing 75 substation transformers and 900 breakers ($290 million).

NIPSCO said that customers and communities will see the following “direct benefits” of the plan:

* The identification and elimination of recurring outages caused by an aging system, by--for example--replacing 40-year-old wooden poles and 50-year-old electric lines.

* A “more modern energy system” is “a critical component to attracting new businesses and expanding existing businesses.”

* The plan will support “the equivalent of 1,200 direct and indirect jobs, including local trades,” throughout the rest of the decade.

* The $1.1 billion investment will result “in a direct local economic boost.”

NIPSCO said that its current electric rates “are below the national average and below the average electric rates for neighboring states across the Midwest.”

It added that the modernization projects envisioned by the seven-year plan “weren’t previously necessary,” as the company “focused on maximizing its existing resources.” In addition, “much of NIPSCO’s energy system is just now beginning to approach the limits of its original design and is in need of replacement to sustain the next 40 to 50 years.”


Posted 2/18/2014