NIPSCO and its largest customers, along with the Indiana Office of Utility Consumer Counselor and LaPorte County, have reached a tentative settlement in the utility’s electric rate increase case before the Indiana Utility Regulatory Commission.
The OUCC said the settlement would reduce the utility’s requested increase by more than $111 million. NIPSCO’s original request was for about $257 million more per year.
“Based on the settlement proposed, the average residential electric customer using 672 kilowatt-hours (kWh) per month would see an overall increase of approximately $23 per month, or 16.75%, spread over multiple years,” Director of Communications Wendy Lussier said.
NIPSCO had sought a monthly increase of about $32, or 22%, based on an average residential customer using 729 kWh per month.
That difference in monthly usage amounts factors in a new, lower rate for multi-family units that would be initiated if the IURC approves the negotiated settlement.
The rate increase would be implemented in two stages to cushion the blow to customers.
Included in the tentative settlement is an additional bill payment assistance program for low-income customers, funded with voluntary ratepayer contributions and $1.5 million in annual shareholder funding.
A $14 monthly residential electric customer charge would remain at its current level.
The proposed agreement is subject to IURC review and approval.
The settlement includes agreements with NLMK Indiana, U.S. Steel, Walmart and RV Industry Users Group.
The Citizens Action Coalition opposes the proposed settlement, saying it would “target Hoosier families with larger rate increases so large and politically connected commercial and industrial customers can get smaller rate increases.”
“NIPSCO’s residential customers cannot afford yet another exorbitant rate increase, and the commission should deny the settlement agreement,” CAC said in a news release.
CAC does support the multi-family rate option and the low-income assistance program, however.
The utility is seeking the rate increase to pay for the cost of converting to reduce its carbon footprint as it moves from coal to wind and solar with an assist from natural gas.
The settlement calls for shutting down the Michigan City Generating Station at the end of 2028 and the coal-fired part of Schahfer Generating Station in Wheatfield at the end of 2026. A natural gas component of Schahfer would provide additional electricity when demand peaks.
The OUCC said it received about 4,900 written comments, including resolutions received from local governmental entities, school corporations and other customers. A total of 68 customers spoke at the IURC’s three public field hearings in this case, all of them in Lake and Porter counties.
Some of the comments were about data centers becoming power hogs. The proposed settlement suggests creating a separate rate for customers that demand a “mega load.” Current customers would be precluded from paying for the additional power generated for new heavy users.
This March 4, 2017 file photo shows a hyperboloid cooling tower at the NIPSCO Michigan City Generating Station, a coal- and natural gas-fired power plant, which is set to close by 2028.
NIPSCO made a series of promises to the LaPorte County Board of Commissioners as part of the settlement. Among them is studying the potential of converting the Michigan City power plant site to a natural gas plant or locating battery storage or some other use that would keep generating tax revenue and “keep good paying jobs in LaPorte County”
The utility also would work with the county, Northwest Indiana Forum and Indiana Economic Development Corp. on a study to identify LaPorte County sites that would be suitable for a similar project, completing the study within six months of IURC approval of the settlement.
NIPSCO would have to make investments of up to $5 million at one or more of those sites to enhance the economic development potential there.
In addition, NIPSCO would commit to investing as much as $3.5 million at Kingsbury Industrial Park for distribution system and substation upgrades.
The IURC can approve, deny or modify the proposed settlement. A settlement hearing is scheduled for March 25 with an order expected later this year.
Doug Ross is a freelance reporter for the Post-Tribune.
