Regulators jolt utilities in NIPSCO case

Utilities across the state were put on notice last week that state regulators will not wait for service meltdowns before taking decisive action.

The notice came in the form of an order barring Northern Indiana Public Service Co. from closing maintenance hubs where equipment and repair crews are housed.

In its Wednesday order, the Indiana Utility Regulatory Commission said it could not "ignore the possible impact" the closure of five service hubs and a work force reduction of as many as 300 employees would have had on NIPSCO customer service and reliability.

The ruling came just one week after a utility snafu involving both NIPSCO and Indiana American Water Co. caused the second boil order in two weeks for communities across a wide swath of Northwest Indiana.

Gary Mayor Scott King, whose community was under the water-boil orders, said he couldn't discount the idea that outrage over those incidents may have "tipped the scale" for the IURC in the service hubs' case.

When asked about the current controversy over the boil orders, IURC spokeswoman Mary Beth Fisher said the commission hopes the cities and utilities can come to an agreement among themselves to resolve the issue.

NIPSCO found some solace in Wednesday's IURC order. The order authorized the utility's continued use of its area service model, under which repair and maintenance workers take trucks home, where they are on call.

"NIPSCO remains firm in its position that the consolidation of our LOA's (maintenance hubs) represents what our customers have said they wanted -- safe and reliable service supported by a stronger, more visible local presence in the communities in which we serve," NIPSCO president Mark Maassel said in a prepared statement in response to the IURC order.

The utility is deferring "full reaction" until it thoroughly reviews all impacts of the decision, the statement said.

IURC orders can be appealed back to the commission and to the courts.

Under its original plan, NIPSCO would have closed five of its 12 maintenance hubs. During the three-year-long case, it reached settlements with some communities that would have kept hubs in Plymouth and LaPorte open, but at reduced staffing levels.

NIPSCO had argued during the case that its workers with take-home trucks were in some situations better positioned to handle emergency repairs than workers stationed at maintenance hubs.

The commission did not buy that, saying NIPSCO did not present enough information during the three-year case to determine what the effect of the hub consolidations, when combined with the area service model, would be.

Last week's order in the hub closings case was unusual, because the IURC in the past generally has avoided getting directly involved in utilities' business decisions, including staffing.

That changed somewhat with meltdowns in Ameritech's customer service in 1999 and 2000 and a similar meltdown at Indianapolis Power & Light after a storm in 2001.

In both cases, the IURC imposed strict customer service requirements and penalties on the utilities. Those requirements were so stringent they forced the utilities to rethink staffing at certain facilities.

But in the hub-closings case, the IURC ordered NIPSCO to keep all 12 of its hubs open, fully staffed, and operating.

Opponents of the closings also note NIPSCO reportedly had begun shutting down at least two of the hubs in spring 2002 and had plans to sell off some properties. They contended that would have made the action irreversible.

The IURC order pointed out that NIPSCO planned to save about $140,000 per week by closing the hubs.

NIPSCO's plan was stopped in its tracks in mid-March 2002 when LaPorte County and Michigan City succeeded in winning both a court order and an IURC order putting the closings on hold.

Over the next three years, the movement to stop the closings was joined by communities across Northwest Indiana, the United Steelworkers, and LaPorte Hospital.

In January, the Hammond City Council joined the fight. It picked Hammond lawyer Thomas McDermott Jr. to represent Hammond's interests and fight the closing of NIPSCO's Hammond hub, where 137 people worked.

McDermott then was in the midst of a campaign to unseat Hammond's incumbent mayor, Duane Dedelow. In the campaign, McDermott attacked Dedelow's acquiescence to the NIPSCO plan. McDermott was elected mayor in the fall of 2003.

This week, McDermott greeted the news of the long-awaited IURC order by saying Hammond and other communities seemed to be "ahead of their time" in fighting the closures.

"It means right now the city of Hammond will still have NIPSCO workers working in Hammond and that's important for NIPSCO customers, and it's very important for the city of Hammond," McDermott said.