UPDATE: An IURC Order approving the settlement agreement among the OUCC, NIPSCO and other parties was issued Sep. 23, 2002.

OUCC News Release, issued June 20, 2002:

Northern Indiana Public Service Company, Inc. (NIPSCO) electric customers will receive a rate credit totaling at least $225 million if a settlement agreement filed today with the Indiana Utility Regulatory Commission (IURC) is approved. The agreement - reached by the Indiana Office of Utility Consumer Counselor (OUCC), NIPSCO and a group of industrial customers - addresses NIPSCO's high electric rates while resolving a number of other important issues and requiring the utility to make long-term commitments to its Northern Indiana customers.

Under the agreement, which requires IURC approval to take effect, NIPSCO customers are guaranteed to receive credits of approximately 6 percent annually off the electric portions of their monthly bills for the next 49 months. Customers will continue to receive the rate credits for an indefinite time period after 49 months, which will only end when and if the IURC issues an Order affecting NIPSCO's base electric rates in a future proceeding. All customer classes (residential, commercial and industrial) will receive rate credits.

"This is a victory for consumers," said Indiana Utility Consumer Counselor Anne E. Becker. "While the process has been long, contentious and costly, we have found a fair resolution that will bring a variety of benefits, both immediate and long-term, to NIPSCO's electric customers. This agreement also provides incentives to strengthen Northwest Indiana's economy."

The investigation into NIPSCO's electric rates (IURC Cause No. 41746) was initiated by an IURC Order on Jan. 24, 2001, with the purpose of examining whether the company is meeting its obligation to charge just and reasonable rates as required under Indiana law. During the proceedings, NIPSCO asserted that it is entitled to a substantial rate increase while the OUCC and other parties called for rate reductions.

In addition to the rate credits, the agreement filed today also:

• Requires the establishment of an electric service reliability mechanism with both penalties and rewards for NIPSCO, depending on its performance;
• Requires NIPSCO to pursue a new economic development rate tariff to promote job growth in its electric service territory;
• Requires NIPSCO to withdraw its current proposal to separate its electric and natural gas operations (IURC Cause No. 42149) and not pursue similar efforts for at least one year;
• Commits NIPSCO to maintaining and fully staffing its corporate headquarters in Indiana throughout the next four years;
• Resolves NIPSCO's cost recovery proposal for new clean coal technology (IURC Cause No. 42150);
• Resolves a number of issues with certain industrial customers; and
• Requires NIPSCO to resolve its membership in an appropriate regional transmission organization. This provision increases the reliability and cost efficiency of NIPSCO's transmission system in the new, competitive wholesale market.

"Our agency is carefully monitoring NIPSCO and will continue to do so," said Becker. "While we stand ready to hold the utility accountable, we trust and expect that all terms of the settlement will either be met or exceeded over the next four years."

The proposed settlement agreement applies only to electric service and will not affect natural gas rates or service. If approved by the IURC, the credits and other benefits will be immediately implemented regardless of whether the case is appealed. If an IURC Order is appealed under typical circumstances, the implementation of its provisions is delayed while an appeal is pending.

The following industrial customers are signatories to this agreement: ISPAT Inland Steel, Central Soya, Unilever Home and Personal Care USA, United States Steel Corp., Bethlehem Steel Corp. and Praxair, Inc.

Additional Media Contacts:
Regina D. Biddings, NIPSCO (219) 647-6388
Jack Wickes or Bette Dodd, NIPSCO Industrial Customers (317) 639-1210

The Indiana Office of Utility Consumer Counselor (OUCC) is the state agency that represents the interests of all utility consumers and the public in matters related to the provision of utility services. The agency is active in proceedings before regulatory and legal bodies, and committed to giving consumers a voice in the creation of utility service policy. Utility consumers with questions or concerns regarding utility service can contact the OUCC toll-free at (888) 441-2494 or on the World Wide Web at www.IN.gov/oucc.

(IURC Cause No. 41746)

 

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