MERRILLVILLE — Reaction to a rate hike for NIPSCO electric customers has been mixed, with consumer advocates saying the increase puts an unfair burden on residential customers and small businesses while the utility says its rates are in line with national averages.
A decision from the Indiana Utility Regulatory Commission this week allowed NIPSCO to modify its electric rates effective Jan. 1
The decision follows an extensive regulatory review and public input process, which began with NIPSCO’s original proposal in November 2018. The result is a “balanced outcome” for customers, the utility said.
“Providing affordable and reliable energy is essential,” NIPSCO president Violet Sistovaris said. “New rates are anticipated to remain in line with the national average as we focus on continuing to better serve customers now and into the future.”
An average NIPSCO residential electric customer will see an overall increase of approximately $6 per month instead of $11 as proposed. The change will be phased in across two steps – Jan. 1 and March 1.
Included within the overall bill change will be a decrease in the monthly customer charge – the flat monthly cost associated with serving customers regardless of their usage – from $14 per month down to $13.50 per month.
The change for individual commercial and industrial customers will vary depending on usage patterns, but on average, rates for overall commercial and smaller industrial customers will also increase less than NIPSCO’s original proposal.
Northern Indiana Public Service Co., a subsidiary of NiSource Inc., serves 468,000 electric customers across the northern third of Indiana, including the southeastern half of Elkhart County. It also provides natural gas service, but this latest decision from the Indiana Utility Regulatory Commission affects only NIPSCO’s electric rates.
The last change in NIPSCO’s base electric rates was made in 2016.
The utility said primary drivers for the increase included investments in upgrading electric infrastructure, environmental upgrades and a shift in the way some large industrial customers will obtain electricity in the future.
Consumer and environmental advocates Citizens Action Coalition and Earthjustice, in a statement, said six large companies in Northwest Indiana would get a break on their bills “while families and small businesses pick up the tab.”
The IURC ruling will allow six large companies to buy most of their energy from outside markets, the groups said, shifting between $40 million and $60 million in annual costs from the companies to NIPSCO’s remaining captive customers.
“These six large companies will realize significant reductions in their monthly energy bills, while the rest of NIPSCO’s customers will see a hike in their bills,” they said.
NIPSCO drafted its proposal in response to threats that the companies would leave Indiana, and perhaps the United States, unless they were given special subsidies by the IURC, according to rate-hike opponents.
“We are very disappointed with the commission’s decision to choose six multibillion-dollar corporations over northern Indiana’s families and other businesses,” Earthjustice attorney Raghu Murthy said.
Citizens Action Coalition of Indiana and Earthjustice represented a coalition of Hoosier ratepayers who challenged the proposal at the Commission. Sierra Club, Walmart, and the Indiana Office of Utility Consumer Counselor, the state agency representing ratepayer interests, also opposed the de facto deregulation, arguing that it did not serve the public interest and failed to maintain the value of NIPSCO’s retail energy service.
The groups pointed out that NIPSCO had not confirmed or investigated the six large companies’ threats to leave Northwest Indiana, and that in any case NIPSCO’s plan would not prevent that from happening.
Opponents also argued that the proposal unfairly favored six customers over the homes and business that make up the vast majority of NIPSCO customers. Finally, the groups argued that it was unwise for the IURC to make such a radical policy change on its own, without specific guidance from the Indiana Legislature.
In a positive move, they said, the IURC approved a settlement reached between NIPSCO and the consumer groups which requires NIPSCO to submit a low-income assistance program within the next six months, and which lowered NIPSCO’s monthly fixed residential charge by 50 cents a month.