MERRILLVILLE | NIPSCO plans a $713 million upgrade of its natural gas delivery system and is requesting annual rate hikes that would total more than 10 percent by 2020.
The request is being made under a law passed in the last session of the Indiana General Assembly that allows utilities to file seven-year improvement plans and pay 80 percent of the cost through bill surcharges known as trackers.
In making the request of state regulators, NIPSCO stated safety, reliability and maintaining access to low natural gas prices are central to the plan.
“We are proud to be among the lowest cost natural gas providers in Indiana," NIPSCO CEO Jim Stanley said in a statement. "And, this plan helps to ensure a safe and modern natural gas system for the future, while continuing to maintain competitive rates for customers.”
Improvements would include replacement of remaining bare steel pipe, construction of 80 miles of new transmission pipes and new service lines to rural customers.
Senate Bill 560, passed in the last session of the General Assembly, gives the Indiana Utility Regulatory Commission 90 days to consider utility requests for comprehensive improvement plans like the one submitted by NIPSCO, according to the Office of Utility Consumer Counselor.
The passage of Senate Bill 560 was opposed by some consumer groups. They contended it would lead to utilities coming forward with "shopping lists" of improvements while eliminating checks and balances on what they can charge.
In July, NIPSCO filed a request under Senate Bill 560 with the IURC to invest $1 billion in improving its electric system, which it would pay for by successive rate increases starting next year. By the end of the decade, those increases would increase a customer's electric bill by about 6 percent
Under the natural gas infrastructure improvement plan filed this week, the natural gas rate increases would start with a 1 percent increase in 2015 that would be followed by annual increases that would average 1.4 percent per year through 2020.
An average residential natural gas customer using 72 therms per month would see their bill grow from today's $52.22 per month to $57.76 by 2020, according to information provided by NIPSCO. Natural gas usage and bills, however, vary due to the weather.
On Friday, NIPSCO was emphasizing its customers pay some of the lowest prices in Indiana for natural gas. According to information published by the Indiana Utility Regulatory Commission, a NIPSCO customer paid $37.05 for 50 therms of natural gas in Sept. 2013 as compared to the average Indiana utility customer who was paying $53.63.
A customer's natural gas bill includes both the commodity price and a delivery charge.
NIPSCO has 712,000 natural gas customers and 457,000 electric customers in Northern Indiana. It is owned by Merrillville-headquartered NiSource Inc., a Fortune 500 energy company.