Forecasters say Hoosier electricity prices will jump

2014-01-01T22:30:00Z 2014-01-02T12:34:07Z Forecasters say Hoosier electricity prices will jumpBy Keith Benman keith.benman@nwi.com, (219) 933-3326 nwitimes.com

A report prepared for the Indiana Utility Regulatory Commission is forecasting electricity use in Indiana will stagnate in coming decades while customer charges soar.

The State Utility Forecasting Group is predicting a 32 percent increase in electricity rates in the next decade, while electricity use will increase just 0.74 percent per year.

"This is something we've never seen before: essentially no growth in electricity for the rest of the decade," said Douglas Gotham, director of the State Utility Forecasting Group.

Indiana's heavy reliance on coal-fired electricity will drive much of the increase in customer bills as those plants are upgraded to control pollutants like mercury and other toxins. Costs associated with additions to electric generating plants as well as modifications to extend their lifetimes will also increase electric rates.

Utility customers across the state are already seeing more frequent changes in bill charges and rates, as utilities come to rely on bill surcharges known as "trackers" to pay for pollution control equipment and system improvements.

NIPSCO electric customers are currently paying tracker-related charges for the installation of pollution control equipment called "scrubbers" at the Schahfer Generating Station, in Wheatfield, and the Michigan City Generating Station. NIPSCO has also asked regulators to raise bill charges by a cumulative 6 percent by 2020 in order to undertake $1 billion in system improvements.

The Utility Forecasting Group is composed of a state-funded panel of researchers at Purdue University. The group makes its electricity forecasts about every two years in accord with a state law enacted in 1985 to provide state regulators with impartial projections of electricity consumption and peak demand.

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