Local utility activists are calling for a temporary halt to a potential sale of NIPSCO's electric operation, as the company and one of its likely suitors remain tight-lipped about the prospect of a deal.

LaPorte officials want a moratorium on any sale until its impact on utility rates can be determined. They are quickly beginning to lobby lawmakers to file a bill.

They also want lawmakers to grant authority for Northwest Indiana officials to form a public power authority, which could bid for the electric service, said Shaw Friedman, attorney for LaPorte County, which has battled NIPSCO over high utility rates.

"There is no assurance whatsoever that NIPSCO customers will see Duke rates. In fact, they could come in with a rate case and propose increases," he said.

Neither officials at NiSource, NIPSCO's parent company, nor one of its likely suitors, Duke Energy, would comment Thursday on industry rumors that the company is about to sell its electrical operation in northern Indiana. The Indiana Utility Regulatory Commission has not received word from either company that a deal has been reached, said Marybeth Fisher, spokeswoman for the IURC.

"Normally, it's a courtesy to inform the commission, but we haven't heard anything," Fisher said.

NiSource has hinted the sale of some of its assets could be on the horizon since 2000, when it acquired Columbia Gas. In 2002, the IURC allowed NiSource to separate NIPSCO's consumer electric operation from its gas operations.

Deregulation did not usher in a new age of competition with the prospect of driving down electric rates, as its supporters envisioned, said Dave Menzer, with the Citizens Action Coalition.

"Over the past five years, I've seen nothing but more mergers and acquisitions, which probably won't help lower rates," he said.

He doesn't expect a sale of NIPSCO's electric operation will lower the wattage on local utility bills.

Duke is only one of the suitors being mentioned as a potential buyers. If Duke does acquire NIPSCO's electric operations, it would make the largest player in the Indiana electric market even larger.

After a merger with Cinergy in 2006, Duke owns operations in Indiana as far south as the Ohio River north to Rochester, according to the company.

Duke's rates in Indiana are lower than NIPSCO's, which has the highest electric rates in the state. In 2006, Duke customers had the third highest rates in Indiana. Duke customers paid $89.73 for 1,000 kilowatts of power, while NIPSCO customers paid $106.35 for the same 1,000 kilowatts, according to an IURC survey.

As a regulated utility, NIPSCO's electrical rates have already been set, which means they would not change immediately. Under a 2002 settlement agreement, the company is expected to use 2007 as a test year and seek a rate increase sometime in 2008, Fisher said.

Duke recently sold off a portion of its gas distribution operation, which potentially freed the utility for future purchases.

For NiSource, selling the electric operation but keeping the natural gas distribution has not been an industry trend, said Mark Agnew, manager of financial analysis for the industry trade group Edison Electric Institute.

As the market for once-staid public utilities continues to shift, a number of business strategies have emerged in recent years, Agnew said.

"This could be the next trend we will see," he said.

Contact Steve Walsh at 648-3120 or swalsh@post-trib.com.