A second Indiana utility plans to follow NIPSCO in asking the Indiana Utility Regulatory Commission for permission to undertake a multimillion upgrade to its infrastructure and charge much of the cost to customers.
Vectren Corp., which serves southern and central Indiana, will ask the IURC for permission to spend $865 million to replace 1,000 miles of underground natural gas lines and gradually raise customer rates over a seven-year period.
The first rate increase in 2015 would increase a typical customer's monthly bill about $1 and similar increases the next six years would have a cumulative impact of about $8 to $9 on a typical customer's bill, according to Vectren spokeswoman Chase Kelley.
NIPSCO in October asked the IURC for permission to spend $713 million on an upgrade of its natural gas delivery system. NIPSCO wants to gradually increase customer rates starting in 2015 until the increases reach a cumulative 10 percent by 2020. That would result in about a $5.50 increase in a typical customer's monthly natural gas bill by 2020.
NIPSCO made its request under Senate Bill 560, which was passed in the last session of the Indiana General Assembly. Vectren's request largely utilized mechanisms outlined in Senate Bill 251, which was passed in 2011, while also utilizing some provisions of Senate Bill 560, Kelley said.
Senate Bill 251 allows utilities to recover costs from customers they feel are due to complying with federal mandates.
Other utilities in the state have been monitoring the NIPSCO case and are expected to follow with their own requests for infrastructure improvements.
Vectren says its gas infrastructure project is aimed at improving safety by removing bare steel and cast iron distribution mains and installing new pipes, most of which will be plastic.
Vectren chairman Carl Chapman told the Evansville Courier & Press the pipelines it now has meet current safety rules, but the upgrades are needed to meet stricter federal regulations that are coming. Chapman told The Indianapolis Star some pipes being replaced are 60 to 70 years old.