OUCC Recommends Lowering Rate Request

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The Indiana Office of Utility Consumer Counselor is recommending a significant reduction in a rate increase request by NIPSCO. The OUCC says the proposed hike would discourage energy efficiency.

NIPSCO is seeking nearly $127 million in new annual operating revenues, which would raise monthly residential charges from $11.00 to 20.00 and the monthly small commercial charges from $20.00 to $30.00. The OUCC filed testimony Friday, recommending that the increase be limited to just $15.6 million.

"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. "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."

The following recommendations were also made:

• Lowering NIPSCO’s authorized return on equity to 8.7 percent. The utility’s current authorized return is 10.2 percent, and it is requesting an increase to 10.75 percent in this case.
• Denying the utility’s proposed early retirement date for Bailly Generating Station Unit 8 and corresponding depreciation costs.
• Modifying various line items pertaining to the electric utility’s operating expenses including personnel costs, operations of environmental compliance equipment, planned outage expenses, and vegetation management.
• Modifying NIPSCO’s 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.

The OUCC also filed written comments from NIPSCO customers, gathered from a public field hearing in Hammond last month.

NIPSCO has until February 12 to submit rebuttal testimony. An IURC evidentiary hearing is scheduled for February 29 in Indianapolis.