The Indiana Utility Regulatory Commission has approved an electric rate increase for NIPSCO that will cause the average residential customer’s bill to go up about $6 per month, according to the utility.
The new rates will go into effect in two phases, the first in January and the second in March.
Wednesday’s order by the IURC followed more than one year of regulatory review. NIPSCO’s original rate request would have raised the average user’s monthly bill by about $11.
In addition to the usage rate increase, the IURC order reduced the monthly fixed charge for residential customers by 50 cents to $13.50. NIPSCO had originally requested an increase of that fee to $17.
“Providing affordable and reliable energy is essential,” NIPSCO President Violet Sistovaris said. “New rates are anticipated to remain in line with the national average as we focus on continuing to better serve customers now and into the future.”
NIPSCO has argued that the additional revenue, which, according to the IURC, would amount to about $42.7 million, is necessary to upgrade electrical infrastructure and make environmental improvements. The utility is currently engaged in a decade-long plan to retire its coal-fired generation plants and shift as much generation as possible to renewable sources.
The IURC order also provides a new structure for NIPSCO’s relationship with its largest industrial clients, allowing them to pursue other sources of electricity and reducing their reliance on NIPSCO.
Opponents contend that the rate increase for residential, business and smaller industrial customers constitutes a subsidy for those larger industrial users. The Indiana Office of Utility Consumer Counselor, the state agency that represents customers and citizens in utility matters, objected to the new arrangement for heavy industry, saying in earlier testimony that it would benefit industrial customers between $40 million and $60 million annually.
An OUCC spokesman said that the agency is “pleased with the commission’s approval of benefits we negotiated for ratepayers, but disappointed with the commission’s approval of the new rate favoring industrial customers."
"We are still analyzing today’s 237-page order and reviewing our options,” the spokesman said.
The ratepayer benefits include a requirement that NIPSCO develop a new low-income assistance plan. That was also lauded by the Citizens Action Coalition, which is active statewide in utility matters, and the environmental law group Earthjustice.
But they said the IURC has unnecessarily acquiesced to threats from large companies that they would leave Indiana without the ability to reduce their energy expenses by pursuing other sources.
“We are very disappointed with the commission’s decision to choose six multi-billion dollar corporations over northern Indiana’s families and other businesses,” Earthjustice attorney Raghu Murthy said.
The IURC wrote in its order that high electricity use among its largest industrial customers — who buy about 40% the electricity NIPSCO sells — "presents a unique business risk” to NIPSCO, particularly with those customers’ claims that they need to reduce energy expenses for their northern Indiana operations to remain viable.
“It is not in the public interest to ignore the challenges of NIPSCO’s traditional rate structure in the face of demonstrated and probable industrial load loss," the IURC stated in its order.
A settlement between NIPSCO and industrial users including U.S. Steel, ArcelorMittal USA, NLMK Indiana, Praxair and BP will allow NIPSCO to better project the industry’s needs, the IURC argued in its order. It "will also enable NIPSCO to make better resource decisions while maintaining system reliability and resiliency.”