OUCC recommends lower rate hike than the 11.5 percent increase sought by NIPSCO

The OUCC filed its testimony in the case, which is pending before the Indiana Utility Regulatory Commission, on Friday.

Through the rate increase, NIPSCO is seeking nearly $126.6 million in new annual operating revenues. The OUCC, which represents consumer interests in IURC cases, recommends that the increase be limited to approximately $15.6 million. Natural gas rates and charges are not at issue in this case.

"Between the base rates that were approved in 2011 and the multiple trackers that have effectively allowed NIPSCO to increase its rates since then, the facts show that NIPSCO's electric utility is essentially financially healthy," said Indiana Utility Consumer Counselor David Stippler in a release. "The modest rate increase which we recommend today will help ensure that the utility has the revenue necessary to provide safe, reliable electric service throughout northern Indiana. However, in our view the increase should be fairly limited as demonstrated by the OUCC's thorough analysis of NIPSCO's request."

NIPSCO's request would raise a monthly residential electric bill for 1,000 kilowatt hours from $126.18 to $137.28 — most of which happens due to an increase a flat, monthly residential customer charge from $11 to $20. Small commercial customers would see their monthly charges go up from $20 to $30. The customer charge covers things like NIPSCO's 24-hour call center and maintenance for electrical lines.

In its testimony, the OUCC said NIPSCO should keep its customer charges at existing levels. NIPSCO's current electric base rates were approved in 2011

NIPSCO has stated that the increase is needed due to increased operating and maintenance costs and to pay for capital improvements, including the replacement of meters throughout its service territory, infrastructure improvements such as new lines, poles and substations, technology upgrades, and plans to retire both units at the Bailly Generating Station by 2023.

"Improving service for customers is our primary focus, and we want to work toward determining rates that are fair to customers and the company," said NIPSCO spokesperson Nick Meyer in an email. "Customers should and do have a voice in the review process, which is reflected in the OUCC's filing."

The OUCC also recommended that the IURC lower NIPSCO's authorized return on equity to 8.7 percent. The utility's current authorized return is 10.2 percent, and the rate case requests an increase to 10.75 percent. The OUCC said that NIPSCO should modify its proposed low-income electric assistance program by advocating for the creation of an assistance fund. NIPSCO customers, employees, and shareholders would be able to contribute to the fund voluntarily with the company matching the voluntary contributions.

It also recommends denying the utility's proposed early retirement date for Bailly Generating Station Unit 8 and the corresponding depreciation costs.

In a separate pending case, NIPSCO has requested IURC approval of a $1.33 billion infrastructure plan, to be accompanied by rate increases over the next seven years. The OUCC has not yet taken a position in that case and will likely file testimony in late March.