INDIANAPOLIS - A settlement agreement has been reached regarding Merrillville-based Northern Indiana Public Service Co.'s proposed seven-year infrastructure improvement plan. The Indiana Office of Utility Consumer Counselor says, if approved, the agreement will reduce capital costs for the project by $80 million.

NIPSCO original proposal would have cost $1.33 billion, which would have been subject to recovery from customers through periodic rate tracker increases. The agreement reduces that amount to $1.25 billion, including annual caps on the rate recovery.

The agreement also includes a project replacing utility-owned streetlights with energy-efficient LED lighting throughout NIPSCO's service area. Costs for the project will be divided evenly between municipalities and customers.

The OUCC says up to $3.5 million will also be made available for an economic development project at the Kingsbury Industrial Park in LaPorte County. Details of the project were not released.

"There is a critical need to modernize and upgrade the energy infrastructure," said NIPSCO Executive Vice President Violet Sistovaris. "Through smart investments and proactively replacing aging parts of our electric system, this plan is about ensuring that our customers have the safe, reliable, and affordable source of energy they depend on today and into the future."

The settlement agreement also involved the LaPorte County Board of Commissioners, the Indiana Municipal Utility Group and industrial customers. The settling parties will file testimony in support of the agreement with the Indiana Utility Regulatory Commission, which may accept, modify or reject it.