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NIPSCO planning $1 billion electrical upgrade project

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press
Wednesday, July 24, 2013 - 6:27 pm

MERRILLVILLE — Northern Indiana Public Service Co. has filed plans with state regulators for a $1 billion project over the next several years to modernize much of its electrical network.

The Merrillville-based utility's proposal includes replacing hundreds of miles of underground and above-ground electrical lines and some 75 substation transformers, The Times of Munster reported.

NIPSCO CEO Jim Stanley said the work would be done throughout its service area that spans much of the state's northern tier, where it has some 457,000 electricity customers.

"It hits every county we serve," Stanley said. "It literally touches every county."

The company request filed last week with the Indiana Utility Regulatory Commission includes seeking annual rate increases for the work of about 1 percent from 2015 through 2020.

Stanley said NIPSCO doesn't expect a rate decision until next year. If approved, the improvement work could begin in mid-2014.

NIPSCO is seeking the rate increase until a new state law approved by legislators this year that allows utilities to pay for basic infrastructure improvements through surcharges added on customer bills.

Consumer advocacy groups opposed the legislation, arguing it would lead to utilities coming forward with shopping lists of improvements while eliminating checks and balances on what they can charge.

"We were afraid this would become a way to nickel and dime customers to death," said Jerry Polk, a utilities attorney for the Indianapolis-based Citizens Action Coalition.

Polk said the Citizens Action Coalition will soon be talking about NIPSCO's plans with other consumer groups and the utility's large industrial customers.

Since NIPSCO is the first utility in the state to come forward with such a plan under new law, the action by the utility commission would be precedent setting, Polk said.

NIPSCO's improvement plan includes replacing 450 miles of underground electric cable, rebuilding 500 miles of electric lines and circuits and replacing 75 substation transformers, with much of that equipment more than 40 years old.

The company's most-recent rate request, concluded in December 2011, increased an average residential customer's bill 4.5 percent. That case also contained provisions that had the potential for a further 1.7 percent increase.

Stanley said the 2011 rate case did not contain a system-wide improvement plan like NIPSCO is now proposing.

NIPSCO also has about 785,000 natural gas customers in northern Indiana. The utility plans to submit a natural gas modernization plan to regulators later this year.