Chesterton Tribune



OUCC endorses NIPSCO seven year gas infrastructure plan with caveats

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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.

The Northern Indiana Public Service Company is specifically requesting $713 in capital improvements under that plan.

“OUCC witnesses 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 OUCC said.

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 are incurred.

Those rate 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 period.

Projects throughout 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 gas service.

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.


Posted 1/27/2014