NiSource CEO weighs in on Indiana General Assembly bill

2013-02-19T14:00:00Z 2014-02-16T18:53:25Z NiSource CEO weighs in on Indiana General Assembly billBy Keith Benman keith.benman@nwi.com, (219) 933-3326 nwitimes.com

NiSource Inc. CEO Robert Skaggs Jr. on Tuesday said he believes a bill that would allow utilities to adjust customer charges to pay for new wires and pipelines is "progressing rapidly" in the Indiana House.

"I do believe there is good support for the legislation and the direction of infrastructure in Indiana," Skaggs told Wall Street analysts on a morning conference call.

Skaggs was even able to recite almost the exact vote total by which SB 560 passed the Senate, in a sign of just how important the bill is to his multi-state company. It now must win passage in the Indiana House.

NiSource is the owner of NIPSCO, which serves 457,000 electric and 786,000 natural gas customers in Indiana. NiSource also owns utilities in six other states as well as a gas transmission business serving 16 states.

SB 560 is fiercely opposed by consumer groups, which protest letting utilities tack customer surcharges known as "trackers" onto monthly bills to pay for basic infrastructure improvements. They claim that change, provided for in the bill, would shift the burden and risk of such improvements onto ratepayers when it should remain with utility investors.

"I couldn't disagree more with Bob Skaggs on this," said Kerwin Olson, executive director of the Citizens Action Coalition. "The sunshine has been put on this bill and we are hoping to beat it down in the House."

In addition to bill surcharges tracking the cost of basic infrastructure improvements, the Citizens Action Coalition opposes a bill provision allowing utilities to temporarily implement up to 75 percent of a requested rate hike if state regulators take more than 300 days to decide a case.

"This bill from our perspective just obliterates the way we are supposed to regulate monopoly utilities," Olson said.

Ed Simcox of the Indiana Energy Association, an industry group, points out any portion of the temporary increase implemented when the deadline is missed would have to be refunded if the commission later rules for a smaller increase. The commission can also extend the deadline by 60 days.

"We tried to impress on the Senate this is not a sweetheart deal for utilities," Simcox said.

On Tuesday's conference call, Skaggs said the bill would help utilities across the state make needed modernization investments in infrastructure. He also said it would aid utilities in extending natural gas service to under-served rural communities.

The NiSource CEO also told analysts about progress with the construction of environmental safeguards at two of NIPSCO's generating stations.

Construction on a $250 million pollution control project at the Michigan City Generating Station should start in March, Skaggs said. A similar project costing $510 million at the R.M. Schahfer Generating Station, in Wheatfield, should be completed and in operation later this year, Skaggs said.

Skaggs also told financial analysts on Tuesday that NIPSCO plans later this year to unveil a long-term modernization program for the replacement of basic electric infrastructure such as poles, transformers and other equipment.

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