Northern Indiana Public Service Co. proposed a pair of electric base-rate increases to the Indiana Utility Regulatory Commission on Friday that could raise residential utility bills by nearly 15 percent the next two years.

The company said the increased revenue generated by the rate hikes is necessary to cover increased operating and maintenance costs, as well as bring the Sugar Creek generating facility in Terre Haute on line.

But Hammond Mayor Tom McDermott Jr. said customers deserve a rate cut.

"The reason I filed opposition in the NIPSCO rate case is that nobody protects the taxpayers," McDermott said. "In a time like this, where people are paying $4 for a gallon of gas and people losing their homes and jobs, it's ridiculous for a company to be asking for any increase."

Last month, McDermott and LaPorte County attorney Shaw Friedman announced their intent to oppose the proposed rate increase before the IURC.

"Can you imagine what would happen right now if I came out with a city budget that increased by 15 percent?" McDermott. "That's ludicrous."

Hearings on the case will start on Jan. 6 with a public hearing set for sometime early in the year. The IURC will make the final ruling on the rates, and NIPSCO will receive a final decision in late 2009 or early 2010.

Under the company's proposal, NIPSCO would adjust rates in two phases. Step one -- which would likely take effect in August 2009 -- includes an overall 2.7 percent base rate increase to recover increased operating and maintenance costs.

For a customer who uses an average of 735 kilowatt hours monthly, the bill would increase from $81.68 to $88.92 -- an 8.86 percent increase.

NIPSCO spokesman Nick Meyer said the proposed rate structure reflects the cost to serve each customer group. Increases will likely be lower among commercial and industrial customers.

"With residential customers, there's a lot more costs associated with servicing and transmission," Meyer said.

Step two -- which would likely take effect around June 2010 -- asks for an additional 9 percent overall base-rate increase to reflect the addition of the Sugar Creek Generating Station to the rate base when it becomes available.

For a customer who uses an average of 735 kilowatt hours monthly, the bill would increase from $88.92 to $94.82 -- a 6.64 percent increase.

 

Contact Christin Nance Lazerus at 648-3086 or cnance@post-trib.com