Date posted online: Wednesday, October 17, 2007
$33.5M refund in works for NIPSCO customers
Settlement would lower price of purchased power
NIPSCO would refund $33.5 million to customers early next year and give them a price break on some electricity under a settlement reached this week with consumer groups.
The action would settle claims the utility overcharged customers for power it purchased from other generators to supplement that produced at its own power plants.
LaPorte County Attorney Shaw Friedman said with NIPSCO purchasing more electricity from other utilities, there need to be tough standards to ensure that NIPSCO purchases power at the lowest possible cost."This agreement does just that and should help cushion against constantly increasing monthly electric bills," Friedman said.
LaPorte County, the state's Utility Consumer Counselor, and a group of industrial customers, were parties to the settlement. It now must be submitted to the Indiana Utility Regulatory Commission for approval. The IURC is expected to act by the end of the year.
A typical NIPSCO residential customer will get a line item reduction of about $5 on each monthly bill starting in February and ending in April, according to NIPSCO spokeswoman Colleen Reilly.
That refund will be in addition to a rate credit of a little more than $4 per month that NIPSCO residential customers have been receiving since 2002 under a separate rate case settlement.
The settlement also provides for a new system for pricing purchased electricity, which will result in NIPSCO paying a greater share of the costs and customers paying less.
NIPSCO will need to continue to purchase power from other producers to meet customers' demands, said company president Mark Maassel. But it also wants to introduce new programs that will allow customers to reduce their use of electricity.
"We are investigating adding additional generation and implementing programs that will provide customers attractive choices to reduce their energy use," Maassel said.
State Utility Consumer Counselor Susan Macy also praised the settlement, saying it provides protection for customers, while acknowledging NIPSCO's need to purchase some power from other producers.
NIPSCO started purchasing significant amounts of electricity from outside power plants in 2002, after it mothballed the Dean H. Mitchell power plant in Gary. In some cases, the purchased power cost three times what it had cost NIPSCO to produce its own at Mitchell.
One year after the Mitchell mothballing, major steel producers asked for an investigation of the increased prices they were paying for electricity. At one time, they estimated it cost them up to $80 million annually for the higher-priced purchased electricity.
That case was settled a year later, but there have been other cases since, with the one settled this week contesting how NIPSCO priced the purchased power for its customers in 2006 and 2007.
Copyright © 2007 nwi.com