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Indiana Office of Utility Consumer Counselor

OUCC > Natural Gas > Natural Gas Cases of Note > NIPSCO Gas Infrastructure Plan NIPSCO Gas Infrastructure Plan

UPDATE: The IURC issued an order approving NIPSCO's 7-year gas plan on April 30, 2014. The approval of the plan does not modify rates at this time, with the order directing NIPSCO to file its first rate adjustment request on September 1, 2014.

 

Northern Indiana Public Service Company (NIPSCO) has filed a new case with the Indiana Utility Regulatory Commission (IURC), seeking approval of a long-term plan for natural gas 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 Natural Gas Infrastructure Modernization Plan.

NIPSCO filed its request filed under a new law (Senate Enrolled Act 560) passed by the Indiana General Assembly in 2013.

The Indiana Office of Utility Consumer Counselor (OUCC) has reviewed NIPSCO's proposed plan and filed testimony with the IURC on January 13, 2014:

For a summary of the testimony, please see the OUCC's recent news release. The OUCC also issued a November 7, 2013 news release to invite written consumer comments.

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's request

NIPSCO filed its 7-year natural gas system improvement plan on October 3, 2013. The plan is pending as IURC Cause No. 44403.

According to the utility's testimony and exhibits:

  • The 7-year plan includes about $713.1 million in capital improvement projects.

  • Projects throughout NIPSCO's natural gas service territory include replacement of aging infrastructure, new transmission mains, the installation of automated valves, and expansion into rural areas that currently do not have natural gas service.

  • If approved by the IURC, construction would start in 2014 with the first rate increase of approximately 1.0 percent taking effect in 2015. The annual rate increase amounts from 2016 through 2020 would vary by year, ranging from 1.5 percent to 1.9 percent each year. The average annual percentage increase over the 7-year term is 1.4 percent.

  • NIPSCO plans to file its first TDSIC natural gas rate adjustment request in September 2014.

An evidentiary hearing is scheduled to start on February 18, 2014 at the PNC Center in Indianapolis. The IURC has until May 1, 2014 to issue an order.

NIPSCO's electric system and rates are not at issue in this case, with a proposed 7-year electric plan pending in a separate docket.

This page will be updated based on future developments.

 

2-14-14