In testimony filed on Thursday, the Indiana Office of Utility Consumer Counselor (OUCC) recommended that NIPSCO's proposed electric rate increase be significantly reduced.
In order to raise rates, NIPSCO needs the approval of the Indiana Utility Regulatory Commission (IURC). The OUCC is a separate agency tasked with representing the interests of consumers before the IURC in utility rate cases.
NIPSCO has proposed increases to its electric rates that would boost the company's annual revenue by roughly $368.7 million. The company has said that an average customer will see a total increase of roughly $32 per month.
NIPSCO says that the funds are necessary to secure its transition away from fossil fuels and towards renewable sources of electricity. Through testimony from 12 expert witnesses, the OUCC made the case for that figure to be reduced to just $203.2 million.
The agency recommended that NIPSCO's flat monthly service charge for residential customers, which the utility is seeking to raise from $14 to $25, be kept at its current level. It also asked that NIPSCO's authorized return on equity (ROE) be reduced. ROE is calculated by dividing net income by shareholders' equity, and represents NIPSCO's profitability.
NIPSCO's current state-approved ROE sits at 9.8% and the company has proposed increasing it to 10.6%. The OUCC has recommended that it be cut to just 9%.
These recommendations, among others aimed at checking spending by NIPSCO, balance "the need for reliable and safe service with affordability concerns," Indiana Utility Consumer Counselor Bill Fine said in a statement released on Friday.
The IURC's filings also include 4,900 written comments that the agency received from individual and institutional NIPSCO ratepayers as well as 68 oral comments delivered at a series of public hearings held in Valparaiso, Hammond and Gary.
Thursday also marked the deadline for entities with an interest in seeing the full proposed rate increase blocked to file their own testimony with the IURC. NMLK Indiana, which operates a Portage steel manufacturing plant, as well as Walmart, the consumer advocacy and environmental group Citizens Action Coalition (CAC), a trade association for RV manufacturers, and the LaPorte County Board of Commissioners all testified against NIPSCO's proposal.
In his testimony, CAC Program Director Ben Inskeep director joined the OUCC in asking the IURC to deny NIPSCO’s requested ROE increase, which he said "reflects an excessive profit margin for NIPSCO’s shareholders at the cost of undermining ratepayer affordability," and urged the agency to instead "set an authorized ROE on the lower end of the range the Commission determines to be reasonable."
CAC recommended that the IURC approve a new multifamily housing rate structure proposed as part of NIPSCO's rate case, which the company says would allow for a 9%, or approximately $10, decrease per month to an average multifamily housing customer using 444 kilowatt hours per month.
NIPSCO now has an opportunity to file rebuttal testimony by Jan. 16. An evidentiary hearing will follow on Feb. 5 in Indianapolis and the IURC is expected to issue its final order next summer.
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