The Indiana Office of Utility Consumer Counselor (OUCC) is not objecting to
most aspects of Northern Indiana Public Service Company’s (NIPSCO’s)
proposed seven-year electric infrastructure replacement plan.
But the OUCC does believe that NIPSCO’s proposed methodology for recovering
the plan’s $1.07 billion in costs should be denied.
The OUCC made its recommendations in testimony filed before the Indiana
Utility Regulatory Commission (IURC) after deadline on Friday.
NIPSCO’s request is the first to be filed under a new Indiana law (Senate
Enrolled Act 560) approved earlier this year, the OUCC said. That law
provides for the following:
’s total annual retail revenues.
In IURC Cause No. 44370, NIPSCO is seeking approval of its seven-year
“Electric Infrastructure Modernization Plan.”
Under that $1.07 billion plan, capital improvements throughout NIPSCO’s
electric service territory would include new transmission and distribution
lines, new substations, upgrades to existing lines and substations, and
replacement of aging poles, transformers, line equipment and other
The OUCC has reviewed the plan and believes “most aspects are reasonable and
will benefit NIPSCO’s customers.” But the OUCC is recommending denial of
NIPSCO’s request to use budgeted economic development funds for other
The OUCC is also recommending several reporting requirements to be adopted
and used throughout the seven-year period.
Under Indiana law, the IURC must issue a final order on the plan by February
Meanwhile, in IURC Cause No. 44371, NIPSCO is seeking establishment of the
methodology for calculating future rate increases for the plan’s project
According to NIPSCO’s testimony, annual rate increases through the TDSIC
mechanism would average 0.9 percent each year over the seven-year term, with
the first increase of 0.4 percent taking effect in 2015 and the last annual
increase of 1.7 percent being implemented in 2020.
“The OUCC’s analysis shows that NIPSCO’s proposed rate recovery mechanism
will overestimate the utility’s need for additional revenue between rate
cases, overcharge customers for capital expenses, and not accurately measure
NIPSCO’s transmission and distribution rate base investment growth as it
relates to investments whose costs are already embedded in base rates,” the
“Analysis also shows that NIPSCO’s plan inflates the estimate of base rate
growth and proposes cost allocators that are contrary to those required by
statute,” the OUCC added.
An IURC technical evidentiary hearing in both cases is scheduled to start
The proposals in these cases would not affect NIPSCO’s natural gas utility’s
system, service, or rates. NIPSCO is seeking approval of a seven-year
natural gas infrastructure replacement plan in IURC Cause No. 44403. The
natural gas case was filed recently, with the OUCC scheduled to file
testimony on Jan. 10.