NIPSCO Electric Infrastructure Plan
In a July 12, 2016 order, the IURC approved a seven-year plan for electric transmission, distribution and storage system improvements for Northern Indiana Public Service Company (NIPSCO), including incremental rate recovery of those costs as the projects proceed.
While the utility had originally proposed a $1.33 billion plan, the Commission's order approved a settlement agreement capping rate recovery for the plan's projects at $1.25 billion. For a summary of the agreement, please see the March 25, 2016 news release.
The OUCC issued a February 17, 2016 news release to invite written consumer comments.
NIPSCO filed its request under a law (Senate Enrolled Act 560) passed by the Indiana General Assembly in 2013.
This proceeding is separate from NIPSCO's rate cases.
NIPSCO's first requested rate adjustment under the plan received Commission approval and raised the monthly residential electric bill for a customer using 698 kWh by 23 cents (or by 34 cents for a residential customer using 1,000 kWh).
The utility's second requested adjustment received Commission approval and increased the monthly residential electric bill for a customer using 698 kWh by an additional $2.01 (or by $2.87 for a residential customer using 1,000 kWh).
NIPSCO's proposed third adjustment was approved in May 2018 and decreased the monthly residential electric bill for a customer using 698 kWh by 3 cents. The OUCC filed testimony (Gruca and Alvarez) on April 4, 2018. To review the case file for Cause No. 44733-TDSIC-3, click here.
The fourth proposed adjustment was approved in November 2018. Under the terms of a settlement agreement between the OUCC and NIPSCO, the adjustment reduces the monthly residential bill by 74 cents for a customer using 698 kWh (or by $1.06 for a customer using 1,000 kWh). The agreement reduces the overall spending cap from $1.25 billion to $1.19 billion.
NIPSCO's most recent request will raise the monthly residential bill for a customer using 698 kWh by $1.20 (or by $1.71 for a customer using 1,000 kWh).It received Commission approval in June 2019.
Indiana Code 8-1-39 allows electric and natural gas utilities to submit infrastructure improvement plans for IURC approval. A plan may cover a 5- to 7-year range. The IURC must rule within 210 days once such a request is filed.
- Once a 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 120 days to rule on such a request.
- TDSIC rate increases are limited to no more than 2 percent of a utility's total retail revenues.
- 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.
All public filings in the case are available by visiting the IURC's Electronic Document System and entering cause number 44733.
According to the utility's testimony and exhibits:
- Projects throughout NIPSCO’s electric service territory include breaker and relay replacements, replacement of aging infrastructure (including transformers, substations, poles, and lines), and the replacement of municipal streetlights with light emitting diode (LED) technology.
- Under the utility's plan as proposed, the projected annual rate increase amounts from 2017 through 2022 would vary by year, ranging from 0.4 percent to 1.3 percent annually. The average annual percentage increase over the 7-year term was projected at about 0.9 percent.
Previous NIPSCO request
The recent case was NIPSCO's second proposal for a 7-year electric system improvement plan. Its first request received IURC approval but is no longer in effect following further proceedings before the Indiana Court of Appeals and the IURC.
NIPSCO filed its original plan in July 2013, in IURC Cause No. 44370. In a separately filed case, IURC Cause No. 44371, NIPSCO requested establishment of the methodology for calculating rate recovery of future costs.
- The OUCC filed testimony in October 2013. (This news release offers a summary.) An OUCC news release inviting consumer comments was issued in September 2013.
- The IURC issued orders on the 7-year plan and the methodology for calculating cost recovery in February 2014.
In a May 2015 settlement agreement, as described here, NIPSCO agreed to refund all money previously collected under the TDSIC tracker.
The IURC issued orders on remand in September and December 2015.
All filings in the cases are available by visiting the IURC's Electronic Document System and entering the appropriate cause number.
This page will be updated based on future developments.
NIPSCO has received approval of its 7-year natural gas infrastructure plan in a separate case.