The Indiana Office
of Utility Consumer Counselor (OUCC) is recommending approval by the Indiana
Utility Regulatory Commission of NIPSCO’s proposed seven-year natural gas
infrastructure replacement plan.
Indiana Public Service Company is specifically requesting $713 in capital
improvements under that plan.
agree that the plan’s projects--including replacement of transmission mains
dating to the 1940s and 1950s, improvements to distribution infrastructure,
and proposed expansions into rural areas that do not currently have natural
gas service--appear to be in compliance with requirements in state law and
will enhance the system’s safety and reliability over the long term,” the
The OUCC also said
that it believes NIPSCO’s cost estimates to be “reasonable at this time.”
The OUCC is,
however, recommending, that the IURC require NIPSCO to file work order level
details for each project a year before construction starts; and that NIPSCO
be required to file annual progress reports including specific cost
estimates for each project, detailed explanations for any proposed revisions
to the plan, and a detailed accounting of revenue derived from rural
extensions as part of each request for rate recovery.
NIPSCO’s request is
pending under a new Indiana law (Senate Enrolled Act 560) approved in 2013.
That law allows an investor-owned electric or natural gas utility to seek
IURC approval of a seven-year infrastructure improvement plan. Under that
law, if the plan is approved, the utility may then adjust rates every six
months, subject to IURC and OUCC review, to recover project costs as they
adjustments may not exceed 2 percent of the utility’s total retail revenues
each year. And 20 percent of the costs must be deferred until the utility’s
next base rate case, which must be filed before the end of the seven-year
NIPSCO’s natural gas service territory would include replacement of aging
infrastructure, new transmission mains, the installation of automated
valves, and expansion into rural areas which currently do not have natural
NIPSCO plans to
file its first TDSIC natural gas rate increase request in September 2014.
If the seven-year
plan is approved by the IURC, NIPSCO’s first natural gas TDSIC rate increase
of approximately 1.0 percent would take effect in 2015. The annual rate
increase amounts from 2016 through 2020 would vary annually, ranging from
1.5 percent to 1.9 percent each year. The average annual percentage increase
over the seven-year term is 1.4 percent.
Under the law’s
timing requirements, the IURC must issue a final order on the 7-year plan no
later than May 1, 2014.
The proposal in
this case would not affect NIPSCO’s electric utility’s system, service, or
rates, the OUCC noted. NIPSCO is seeking approval of a seven-year electric
infrastructure replacement plan and establishment of the methodology for
calculating future electric rate increases in IURC Cause Nos. 44370 and
44371. All hearings and filings in the electric cases are complete.