INDIANAPOLIS -- Consumer groups representing homeowners and major industries are asking NIPSCO to reconsider its rate hike request in light of the tumbling economy.
The dramatic impact of the proposed hike in rates was highlighted Monday when lawyers representing steelmakers quizzed NIPSCO parent company Chief Executive Officer Robert Skaggs Jr. on proposed new rates at a hearing in Indianapolis.
NIPSCO is proposing to raise residential rates 15.6 percent, which would hike a typical customer's monthly bill by $12.76. The overall increase when all classes of customers are factored in would be 9.8 percent, according to NIPSCO.
"What kind of conceptual support do you have for the notion that if you have higher rates and depend on industry for business that you should then raise rates?" asked Jack Wickes, a lawyer representing some of the region's largest steelmakers.
Wickes said the new rates, which would take the place of contracts under which the steelmakers now operate, would raise actual costs for electricity 54 percent.
NIPSCO officials on Monday did not have information on how much a new rate proposed for heavy industry would raise steelmakers' costs.
Advocates for residential customers were no happier with NIPSCO's proposal, with lawyers representing LaPorte County, Hammond, and statewide consumer groups quizzing Skaggs.
Attorney Shaw Friedman, representing LaPorte County, asked Skaggs why NIPSCO consistently ranks so low on JD Powers surveys of utility customer satisfaction.
Skaggs admitted some big corporate moves made in the last decade at NiSource and NIPSCO may have been flawed but also outlined moves the company is making to improve.
"We do use best practices used by our peers," Skaggs said. "You can see that in our storm response, our call center, ... we even try to look beyond our peers."
He added the JD Power survey is something the company wants to improve on, while pointing out the survey is only one means of looking at utility performance.
Friedman also pointed out NIPSCO electric rates were the highest of any investor-owned utility in Indiana in 2007, the test year that is being used to set new rates for the company.
Hammond Mayor Thomas McDermott Jr. said Friedman's points about how much NIPSCO charges and the low JD Power rankings were well taken.
"We as NIPSCO customers pay for a Cadillac, but we don't get a Cadillac," he said.
NIPSCO CEO Eileen O'Neill Odum is expected to testify today.
