In its proposed 16 percent rate increase, NIPSCO is telling state regulators it wants customers to shoulder a larger burden for everything from power plant coal to energy efficiency.

That has alarmed consumer groups, who say the utility is shifting risk onto the backs of customers already burdened by high energy costs.

"The affordability issue is just crucial in Northwest Indiana," said Grant Smith, of the Citizens Action Coalition. "The people up there are paying much too much for the service now."

The biggest shift under NIPSCO's rate plan would come in its fuel charge, which adjusts customer charges monthly to reflect the cost of fuel for power plants.

The company wants to shift all fuel costs now contained in its fixed base rate into its variable fuel charge.

NIPSCO calculates that the fuel surcharge that made up 7 percent of a customer's bill based on fuel costs in December would make up almost 25 percent of a customer's bill under its rate proposal.

In fact, NIPSCO's base rate actually goes down under its rate proposal. All of the utility's projected overall 16 percent increase in customer charges comes about because of the increase in the fuel charge.

NIPSCO contends the shift would help simplify customers' bills and subject all fuel charges to monthly review by the Indiana Utility Regulatory Commission.

"It's a chance to recover actual costs -- not more and not less than what it costs the company -- with no mark-up to customers," NIPSCO spokesman Nick Meyer said.

But what worries consumer representatives is the monthly up and down nature of fuel costs. For example, the fuel surcharge contained in customers' bills this month is 43 percent higher than the one in December.

That would add $9.71 to a typical customer's bill under NIPSCO's rate proposal.

"They would shift the volatility and risk for fuel costs almost entirely to ratepayers under this plan, rather than those being shared with stockholders," LaPorte County Attorney Shaw Friedman said.

Surcharges are widely used by utilities in the United States, but the increasing use is alarming consumer groups. NIPSCO currently has three in place, all previously approved by the Indiana Utility Regulatory Commission.

NIPSCO is the a largest utility in Indiana, with 445,000 electric and 712,000 natural gas customers.

In its rate case, NIPSCO is asking state regulators to approve one more tracker. The company is calling it a "reliability adjustment." It would pay for the cost of power purchases and fees paid to transmission grid operators.

That surcharge also would be used to refund some of the money NIPSCO makes from selling power to other utilities to its own customers.

NIPSCO also told regulators it will be seeking another tracker to cover costs associated with a new energy efficiency program it wants to begin. That proposal will come in a petition to be presented to state regulators this fall.

Those energy efficiency programs will give customers one more chance to cut their costs for electricity, Meyer said.