EDITORIAL: NIPSCO investments must become energetic

2013-07-25T00:00:00Z EDITORIAL: NIPSCO investments must become energetic nwitimes.com
July 25, 2013 12:00 am  • 

NIPSCO is poised to make some major investments in its power lines and other transmission equipment over the next seven years. It will be money well spent.

This appears to be a responsible plan aimed at ensuring reliable delivery of electric service decades into the future.

NIPSCO filed its electric infrastructure modernization plan Friday, the first utility to do so since Senate Bill 560 became law, requiring these plans.

That legislation allows utilities to use "trackers," essentially surcharges, to recoup costs quickly instead of building a major rate case. These trackers, like the modernization plans, must be approved by the Indiana Utility Regulatory Commission.

NIPSCO's planned improvements include replacing poles — going from 1,000 poles a year now to 3,000 when the plan is in full swing — underground wires and substation transformers.

"Every electric utility in the country has assets that are old," NIPSCO CEO Jim Stanley said. By that, he means 40 to 50 years old.

"We're targeting the very old assets," he said.

NIPSCO has about 161,000 poles, 43 percent of the total, that have been in place 40 years or more, he said, and 35 percent of the underground cable is in the "prone to fail" category.

Over the life of the plan, NIPSCO plans to invest about $1 billion and create 1,200 jobs. And that's just for the electric side of the business.

A separate plan for the gas business, which will include expanding NIPSCO's service territory will be filed later. Stanley said that plan will include expanding NIPSCO's service territory so people who currently must rely on LP gas delivered by truck would be able to purchase less expensive natural gas instead.

Utilities' modernization plans must receive not only initial IURC approval but also will be subject to annual review, with updates every six months. Utilities must be held to their promises.

Regulators should review NIPSCO's electric infrastructure modernization plan cautiously, of course, but it seems to address customers' needs.

Customers could see 1 percent annual increases in their electric bills later in the decade when the construction is in full swing. That's necessary for NIPSCO to ramp up its investment in its transmission infrastructure.

Failing to make these investments would jeopardize the reliability of the system.

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