Facts about NIPSCO’s 2019 proposal to modify electric rates

Customers deserve and depend on reliable electricity at a fair price. That’s why NIPSCO is working hard to continually improve service while effectively managing costs.

It's Your Energy and it's Your Future

As we envision a brighter future for northern Indiana, we are focused on making the transition to lower-cost, cleaner energy options when it comes to supplying the future energy needs of our customers. 

Though customers will realize savings over the long-term as a result of these changes – largely through lower fuel costs from increased utilization of renewable energy and the avoidance of costs associated with maintaining and upgrading aging facilities – NIPSCO is making a request to adjust electric rates, which proposes an increase for customers to support the transition.

NIPSCO’s proposal seeks to the needs of customers and support the company's future plans.Customers have a voice in this year-long process, which is ultimately decided by the Indiana Utility Regulatory Commission (IURC).

Limiting the impact on customers

Balancing the need for system improvements while limiting the bill impact on customers is important. Newly proposed electric rates would be phased in over two steps in September 2019 and March 2020.

Under NIPSCO’s filing, an average residential customer using 690 kilowatt hours (kWh) per month would see an overall $11 per month increase in their monthly electric bill – or 12 percent per month.

Included as part of the overall bill change is a proposal to increase the existing, fixed monthly customer charge by $3 per month.

The projected change does not account for future changes that can occur outside of base electric rates – which could go up or down depending throughout a given year – such as fuel costs to run its generating facilities and the cost of administering energy efficiency programs for example. Those costs still require regulatory oversight and approval.

Changes in rates for business customers will vary. Today, NIPSCO’s electric rates are below the national average.

Why rates are changing

In addition to supporting NIPSCO’s plans to accelerate the retirement of its remaining coal-fired electric generating units and transition to lower-cost renewable energy, the other primary drivers of the proposed increase include investments in upgrading electric infrastructure, recent environmental upgrades and a shift in demand among large industrial customers. New rates also support continued investments and improvements to better serve customers into the future.

Benefits and service improvements

It's important for customers to understand what they're paying for and that they're getting a good value. NIPSCO’s plan highlights a range of improvements made in recent years that directly benefit customers, including:

  • Providing electric rates below the national average
  • Investing $535 million in the last five years in upgrades and improvements to modernize our electric infrastructure
  • Making investments to minimize power outages and provide better overall response and information to customers during events
  • Helping customers save an estimated $155 million in energy savings programs since 2010, based on current average electric rates
  • Completing environmental upgrades to improve local air and water quality

Frequently asked questions

Do customers have a voice in the review process?

It’s important that customers understand they have a voice in the process in multiple ways: via written comments, a public field hearing, and various consumer advocacy organizations that participate in the process.

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Why now? Why do rates need to increase?

In addition to supporting NIPSCO’s plans to accelerate the retirement of its remaining coal-fired electric generating units and transition to lower-cost renewable energy, the other primary drivers of the proposed increase include investments in upgrading electric infrastructure, recent environmental control upgrades and a shift in demand among large industrial customers. New rates also support continued investments and improvements to better serve customers into the future.

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How will residential electric bills be affected?

Newly proposed electric rates would be phased in over two steps in September 2019 and March 2020.

Under NIPSCO’s filing, an average residential customer using 690 kilowatt hours (kWh) per month would see an overall $11 per month increase in their monthly electric bill – or 12 percent per month.

Included as part of the overall bill change is a proposal to increase the existing, fixed monthly customer charge by $3 per month.

The projected change does not account for future changes that can occur outside of base electric rates – which could go up or down throughout a given year – such as fuel costs to run generating facilities and the cost of administering energy efficiency programs. Those costs still require regulatory oversight and approval.

Changes in rates for business customers will vary. Today, NIPSCO’s electric rates are below the national average.

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How will commercial and industrial customer bills be affected?

Maintaining competitive rates for businesses while supporting job growth and the local economy is important. Just as NIPSCO focuses on holding the line on costs for residential customers, it is important to maintain competitive electric rates for higher-usage customers as well.

The impact on individual commercial and industrial customers will vary depending on their usage patterns.

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When was the last time NIPSCO changed its electric base rates?

The last change was approved in 2016, and this new proposal would represent only the third such change in base rates in nearly 30 years.

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Are costs for charitable giving included in NIPSCO’s request?

No. NIPSCO is proud to support hundreds of charitable organizations across the communities it serves, but those costs are not part of this request.

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How has NIPSCO improved service to its customers?

It’s important for customers to understand what they’re paying for and that they’re getting a good value. NIPSCO’s plan highlights a range of improvements made in recent years that directly benefit customers, including:

  • Providing electric rates below the national average
  • Investing $535 million in the last five years in upgrades and improvements to modernize our electric infrastructure
  • Making investments to minimize power outages and provide better overall response and information to customers during events
  • Helping customers save 1.04 million megawatt hours since 2010
  • Completing environmental upgrades to improve local air and water quality

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Does NIPSCO offer programs to help low-income customers?

Yes. Programs such as budget plans, summer cooling assistance, credit arrangements and income-qualified weatherization are currently available.

And, within NIPSCO’s proposal, the company also highlighted its commitment to working collaboratively to identify and create a new electric bill payment assistance and weatherization program for income-eligible electric customers.

Customers experiencing difficulty with their bill – regardless of their income – are encouraged to contact us to determine what help might be available to them.

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Does NIPSCO offer incentives for customers to be more energy efficient?

Yes. NIPSCO promotes a variety of programs and incentives designed to help all customers be more energy efficient, including free in-home energy assessments, equipment rebates, weatherization and more.

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Does increasing the fixed monthly customer charge discourage energy efficiency?

No. Just like today, customers who use less electricity in the future will spend less otherwise. And being energy efficient can continue to have a positive effect on a customer’s bill.

Today, residential customers pay a monthly customer charge of $14 – a separately itemized portion of the bill – which helps account for those fixed costs to maintain a customer regardless of usage (e.g., maintaining an electric system that serves customers, responding to emergencies, reading meters, maintaining account information, etc.).

Increasing the customer charge gives customers a clearer picture of how energy use affects their bill by better separating out the fixed portion of bills versus the portion that is variable.

Additionally, increasing the customer charge further stabilizes customer bills throughout the year, especially during the summer, when electric bills are typically higher because of warmer temperatures and increased usage.

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Does this request impact bills for natural gas customers?

No.

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What is a rate case?

Unlike most companies, which can change the cost of their product/service overnight, regulated utilities like NIPSCO must submit a detailed request to change their rates. The request includes evidence to support the increase in costs and demonstrate how those dollars will be used fully to the benefit of customers.

This process is called a rate case, and NIPSCO’s approval must come from the Indiana Utility Regulatory Commission (IURC). Ultimately, the goal of the yearlong review process is to strike a balance on new rates that are fair to both customers and the company.

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Have an emergency?

Natural Gas: If you smell gas, think you have a gas leak, have carbon monoxide symptoms or have some other gas emergency situation, go outside and call 911 and then our emergency number 1-800-634-3524.
Electric: For any electric emergency, including a downed power line, power outage or other electric-related situation, please call 1-800-464-7726.