NIPSCO case nears end of round 1

BY KEITH BENMAN
kbenman@nwitimes.com
219.933.3326 | Saturday, January 24, 2009

The first two weeks of hearings on a proposed 15.6 percent increase in NIPSCO residential electric rates wrapped up in Indianapolis this week.

Both the utility and consumer groups said they are getting solid information and feedback at the hearing, but they remain at odds over the need for a rate increase.

"NIPSCO has a long way to go to justify a rate increase in the depths of a recession," said Shaw Friedman, a lawyer representing LaPorte County in the case.

He pointed out NIPSCO rates are already among some of the highest in the state.

The hearings are taking place before the Indiana Utility Regulatory Commission in Indianapolis.

But Friedman, who has fought the utility in a number of cases going back almost a decade, praised the utility's efforts to deal with consumer groups in a straightforward way.

"I think there has been a good, strong exchange of information," Friedman said.

NIPSCO officials had similar kind words for consumer groups.

"The intervenors and those involved with the case have asked good questions and we have provided solid answers," said NIPSCO spokesman Nick Meyer.

The hearings are set to reconvene Feb. 3, according to IURC spokeswoman Danielle Dravet. Nineteen NIPSCO witnesses have been cross-examined so far and three more are scheduled.

The residential rate increase proposed by NIPSCO would hike a typical customer's monthly bill by $12.76. The overall increase when all classes of customers are factored in would be 9.8 percent, according to NIPSCO.

NIPSCO is the state's largest utility with 455,000 electric and 712,000 natural gas customers.

The IURC has scheduled a field hearing on the rate hike at which the public can comment at 6 p.m., March 3 at the Savannah Center auditorium at Indiana University Northwest in Gary.

The case could run for much of this year and part of next before commissioners issue an order setting NIPSCO rates.

NIPSCO is aware of the challenges faced by customers during this recession, Meyer said. He pointed out the utility was required to file a rate case in 2008 under the terms of a previous settlement reached with consumer groups.

All five Indiana Utility Regulatory Commission members have attended a number of the hearings.

Commissioners have questioned NIPSCO officials on the 2001 closing of the Mitchell generating station, NIPSCO plans for increasing generating capacity and special contracts the utility has with large industrial users.

Commissioners have also wanted to know more about parent company NiSource Inc.'s efforts to sell NIPSCO's electric business last year.

On the hearing's first day, NiSource CEO Robert Skaggs Jr. told commissioners NiSource is not trying to sell NIPSCO and does not plan to.