NIPSCO plans to ask state regulators this March for changes in its charges for natural gas service, but it is not yet saying whether those changes will hike or decrease customers' bills.
"Because it has been some time since our last gas rate case filing, there is a need for a redesign of existing rates," NIPSCO spokesman Nick Meyer said Monday.
NIPSCO already has a request before state regulators for an electric rate hike that would increase a typical residential customers' bill 15.6 percent.
The Indiana Utility Regulatory Commission is done taking testimony in that case and is expected to rule on the request before July, the CEO of NIPSCO parent NiSource Inc. told Wall Street analysts Monday.
NiSource CEO Robert Skaggs Jr. also confirmed that NIPSCO plans to file a second electric rate hike request before the end of this year, to cover the utility's increased pension costs and adjust rates for recent changes in demand for electricity. That case will not be decided by regulators until at least 2011.
That means NIPSCO customers who get both gas and electric service from the utility could see multiple bill hikes over the next two years.
NIPSCO has 712,000 natural gas customers and 457,000 electric customers in northern Indiana, with most residential customers in Northwest Indiana getting both services.
Meyer said the utility has not yet determined the exact impact of any proposed changes in gas rates on customer's bills.
However, NiSource natural gas subsidiaries in Massachusetts and Kentucky won increases this past year that will result in 3.7 percent hikes in their base revenue, Skaggs said. And NiSource's Columbia Gas of Pennsylvania subsidiary last week filed a rate case there that would hike residential customers' gas bills 6.9 percent.
"And last but certainly not least, our Northern Indiana Public Service Co. subsidiary plans to file a natural gas rate case as early as March, with new rates expected in 2010," Skaggs said.
NIPSCO has not filed a base gas rate case since 1987.
However, it has added surcharges during that time to pay for environmental improvements. And a combined conservation and rate simplification plan approved by state regulators three years ago resulted in higher charges for residential customers using more than 200 therms of natural gas per month.
Meyer said the utility cannot divulge specifics on the changes it will seek next month, but that it is looking at including some kind of low-income energy assistance program as well as an energy efficiency program in its gas rate request.
Any rate change would affect the delivery portion of a customer's bill, which typically represents 25 percent of the charges. Under state regulation, NIPSCO's charge for the natural gas itself is directly tied to the wholesale price of natural gas with no markup.
THREE-PRONGED APPROACH
Indiana regulators are mulling an electric rate hike request from NIPSCO that would increase residential bills by about 15.6 percent. A decision is expected by July. Meanwhile, the company next month plans to file its first natural gas rate case in decades, and it will pursue another electric rate case before the end of the year. NIPSCO hasn't said what either of the upcoming filings could cost customers.
