Dim street lights have become a bright flashpoint in NIPSCO's case before state regulators to undertake $1 billion in electric system improvements and hike customer bills a cumulative 6 percent.
A plan to replace outdated NIPSCO-owned street lights with LED lights at a cost of $5.6 million was proposed by a group of eight Northwest Indiana municipalities intervening in the case.
"These lights have to be changed out sooner or later," said Theodore Sommer, who has been representing the municipalities. "Every one of them is aging and right now the paybacks are very attractive."
The eight municipalities in the Indiana Municipal Utilities Group are Valparaiso, East Chicago, Munster, Schererville, Dyer, Highland, Griffith and Winfield.
But attorneys for U.S. Steel have vigorously challenged the street-lighting plan. They state in their most recent filing there is no evidence replacing street lights will be an effective use of money NIPSCO will raise through surcharges on customer bills.
In all, NIPSCO wants to devote $70 million out of the $1 billion in spending to economic development projects, which it says could include the street lighting project.
U.S. Steel asserts the overall hike to customer bills could be cut 7.5 percent if the $70 million in economic development projects were eliminated from the improvement plan altogether.
In July, NIPSCO became the first utility in the state to submit a seven-year improvement plan to the Indiana Utility Regulatory Commission under Senate Bill 560. The bill allows utilities to submit such plans for regulatory approval and recoup 80 percent of the cost of improvements through surcharges on customer bills known as "trackers."
Those surcharges would increase a typical residential customer's electric bill by just 0.4 percent in 2015, according to NIPSCO. But those bill hikes will increase each year until a final 1.7 percent increase is levied in 2020. The cumulative hike in a typical residential customer's bill by then would be just above 6 percent.
The bulk of NIPSCO's $1 billion improvement plan remains aimed at upgrading or replacing aging infrastructure such as poles, underground wires and substation transformers in order to increase system reliability.
The Indiana Office of Utility Consumer Counselor let it be known in its most recent filing it could support a street lighting program up to $10 million per year for municipalities in NIPSCO territory.
Witnesses for the Indiana Municipal Utilities Group have testified the LED lights could cut energy consumption by 60 percent. The eight municipalities estimate about two-thirds of the street lights are owned by NIPSCO, with municipalities paying the electric bill.
In its most recent filing, the group estimates the program could be implemented in all 48 municipalities in NIPSCO's electric service territory for about $35 million.
The NIPSCO Industrial Group, composed of ArcelorMittal, BP and Praxair, has issued a broadside against the NIPSCO plan in its entirety in its latest filing. The companies maintain NIPSCO's improvement plan lacks any specificity after the first year, with its proposed order allowing it to undertake or strike just about any projects it chooses after 2014.
"They are talking about spending $1 billion with the details to be filled in later," said lawyer Jennifer Terry, of Lewis & Kappes, which represens the Industrial Users Group. "We don't think that's good rate making nor is it in accord with what the new statute requires."
In that same vein, if the NIPSCO plan is approved, the NIPSCO Industrial Group thinks economic development funds should only be used for economic development and not diverted to other projects, Terry said.