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NIPSCO Seeks To Modify Electric Rates, Further Improve Service To Customers

Friday, October 09, 2015

This is only the second time in more than 25 years that NIPSCO has requested to change base electric rates. The last time was five years ago. Since then costs to produce and distribute power to customers have continued to increase, while at the same time NIPSCO has continued to make necessary and prudent investments to maintain and improve service and reliability to our customers. 

“Customers deserve and depend on reliable electricity at a fair price,” said NIPSCO executive vice president, Violet Sistovaris. “That’s why NIPSCO is working hard to continually improve service while effectively managing costs. Our proposal works to strike the right balance of cost and service, so that we can provide the level of service customers expect.”

Continuing to Improve Service and Reliability While Working to Hold the Line on Costs
For NIPSCO, just as with most businesses, the costs to serve our customers increase over time.  We are focused on strategically and proactively making the necessary investments and improvements to the reliability and service we provide to our customers, while working to hold the line on costs. 

It’s important for customers to understand what they’re paying for and that they’re getting a good value for their money. NIPSCO in recent years has invested in a range of improvements that directly benefit our customers, including:

  • Eliminating estimated bills by replacing all customer meters
  • Reducing the time customers spend without power by 40 percent
  • Upgrading technology to further improve response times and make it easier for customers to do business with us, including the introduction of a new alert option for customers to receive text, email and phone calls with better information during power outages
  • Offering ways to help customers save energy and become more energy efficient
  • Providing optional programs for customers to generate electricity from renewable energy

Examples of the costs of investments made since NIPSCO’s last case to achieve these customer benefits include:

  • $95 million in system upgrades to increase reliability (replacing poles, lines, constructing new substations, etc.)
  • $90 million to replace all meters to eliminate estimated billing
  • $8.5 million in technology upgrades to improve response time and introduce options for customers to be better informed during power outages
  • Increased labor and material costs
  • Increased costs to generate electricity associated with operating/maintaining newly installed equipment to comply with federal environmental regulations to improve air/water quality

Maintaining the Balance Between Cost and Service
Customers deserve and depend on reliable electricity at a fair price.  Maintaining the right balance of cost and service is important to all of our customers, from residential to commercial and smaller industrial to our very largest industrials. NIPSCO’s request seeks to find a balance between new rates that are fair to all customers and the utility. 

Under the IURC regulations, public utilities can request to recover all or part of their investments. NIPSCO’s request includes evidence to support the requested increase and demonstrates how the dollars will be used fully to the benefit of customers. It also satisfies the terms of a previous requirement to file a case by the end of 2015.  Ultimately, the IURC will decide the outcome of NIPSCO’s request.

Customers have a voice in the process in multiple ways – written comments submitted directly to the IURC, a public field hearing, and through various consumer advocacy organizations who participate in the process.

Effectively Managing Customer Bill Impacts
Managing company costs while maintaining affordable and competitive rates for our customers is a key part of this case. 

In Indiana, where energy costs are relatively low when compared to the Midwest and the nation, NIPSCO has held the line on electric rate increases better than any other Indiana 
utility during the last decade, according to the IURC annual residential bill surveys. The average monthly bill in Indiana has increased approximately five percent annually, while NIPSCO has seen the lowest change at three percent annually.

For NIPSCO’s Commercial and Industrial Customers
Maintaining competitive rates for businesses, while improving electric reliability and decreasing outages, is vitally important for our businesses. Investments made by NIPSCO since the last electric rate case have reduced the time customers spend without power by 40 percent.

The impact on individual commercial and industrial customers will vary depending on their electric usage patterns. But on average, rates for overall commercial and smaller industrial customers would increase approximately seven to nine percent when compared with today’s bills.

NIPSCO’s major accounts team continues to be available to our businesses. Major accounts managers can work with businesses on energy efficiency programs that are available to support more efficient use of energy and help keep electric costs down.

For NIPSCO’s Residential Customers
In a perfect world, consumers’ bills would never go up and we would all still be paying $2 instead of almost $4 for a gallon of milk. NIPSCO is in the same boat as others in that it’s costing more to provide safe and reliable power to run residential home appliances, heating, cooling, mobile devices, computers, TV’s and other day to day residential electric needs.

Under the proposal, an average residential bill would rise by $10.53 from $91.63 to $102.16.

NIPSCO has residential energy efficiency programs that can help residential customers with more efficient use of energy to keep electric costs down.

NIPSCO is also proposing a new low-income assistance program for summer electric assistance – when electric usage is typically at its highest point. The mechanics of the program will be determined in the review process, but it will be comparable in nature to the existing winter heating assistance program that NIPSCO and other Indiana utilities offer.

More Information
Customers with questions regarding NIPSCO’s electric rate proposal may visit for more information. NIPSCO’s web site also provides information about available energy efficiency programs.

Violet Sistovaris, Executive Vice President