NIPSCO Electric Infrastructure Plans
A brief summary of the TDSIC law
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 plan's term.
- 2022-2026 Plan
This case is on appeal. Industrial customers and the OUCC filed a brief with the Indiana Court of Appeals on May 13, 2022.
The OUCC filed the following testimony on Aug. 30, 2021:
The plan includes rate increases through a Transmission, Distribution, and Storage System Improvement Charge (TDSIC), and replaces the utility's plan that received Commission approval in 2016. Key components include installation of advanced metering infrastructure (AMI), pole replacements, and upgrades and replacements to transformers, substations, steel transmission line structures, and additional projects to be built through 2026.
NIPSCO's case-in-chief includes the following:
- 2016-2021 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 (Cause No. 44733).
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.
- 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.
- 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 fifth adjustment raised 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.
- The sixth adjustment was approved in December 2019. It raised the monthly residential bill for a customer using 698 kWh by 85 cents (or by $1.22 for a customer using 1,000 kWh).
- NIPSCO's September 2020 request will set the tracker amount at $3.72 over base rates, for a residential bill at 1,000 kWh. The utility had proposed a $4.24 amount. OUCC testimony (Haselden and Lantrip) recommended limiting the amount to $2.64.
- Under NIPSCO's most recent request, the tracker amount for a 1,000 kWh residential bill will go down to $2.98 over base rates.
NIPSCO terminated this plan as of May 31, 2021, as allowed by statute.
These proceedings are separate from NIPSCO's rate cases. They are also separate from NIPSCO's natural gas infrastructure plans.
- Initial NIPSCO Request
The 2016 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.