Hammond wants court to nix NIPSCO rate hike

The city of Hammond is challenging state regulators' approval of NIPSCO's electric rate hike in court.

The city never signed onto last year's settlement, which the Indiana Utility Regulatory Commission approved in late December, and remains opposed to its terms, Hammond Mayor Thomas McDermott Jr. said.

"The general concept is NIPSCO is getting a large rate increase at a time when I'm laying off police and firemen," McDermott said.

The city contends the IURC order is affecting both city budgets and city residents, with some low-use customers seeing their bills go up more than the 4.5 percent NIPSCO has pegged as the bill increase for a typical customer.

Responding on Wednesday, NIPSCO spokesman Nick Meyer said the utility responded quickly to customer concerns after the IURC issued an order in August 2010 that would have allowed the utility to hike rates 16.8 percent. NIPSCO filed a second case requesting a rate increase less than half of that.

"And that increase was further reduced to the smaller increase in the settlement," Meyer said.

The 16.8 percent increase did not go into effect, and the IURC rescinded that order when it approved the 4.5 percent increase in December. That increase was part of a settlement reached with a number of municipalities and large industrial users earlier in the year.

The city of Hammond filed its appeal with the Indiana Court of Appeals in late January. Shaw Friedman, Hammond's lawyer in the case, points out testimony from the case showing that an extra 3.14 percent could be tacked onto residential customers' bills once a discount program for large industrial users is put into place this year.

NIPSCO in the past has said that second increase will be more like 1.7 percent and will only be that high if large industry takes full advantage of the discount.

NIPSCO has 457,000 electric and 786,000 natural gas customers in northern Indiana. It is a subsidiary of utility holding company NiSource Inc., of Merrillville.