NIPSCO electric rates will rise by 16.75% for the average residential customer over the next two years after the Indiana Utility Regulatory Commission approved the company's latest rate hike in late June.
The average NIPSCO customer using 672 kilowatt-hours will end up paying $23 more per month after the rate increase is phased in over the next two years, with the exact amount varying based on a number of factors, including use.
Large industrial customers will see an increase of about 10%. Under the terms of a settlement, big businesses in NIPSCO's service territory in northern Indiana will see rate increases of 11.39% to 13.27%, and small- to medium-sized commercial customers will see rate increases of 15.68% to 17.2%.
The rate hikes start this month and will be phased in through early 2026.
“NIPSCO is committed to connecting our customers with safe and reliable energy that add value to their everyday lives,” NIPSCO President and Chief Operating Officer Vince Parisi said. “We’re proud of the collaborative outcome reached through this process, which balances the need for critical investments with the importance of minimizing the impact on our customers. We understand that any increase in bills is significant, and we remain focused on supporting our customers through this transition with new assistance programs and continued improvements to service and reliability.”
When NIPSCO first filed a request for a rate hike in September, the Merrillville-based gas and electric utility sought a 22% increase that would have raised the average residential bill by $32 a month. The initial rate request typically is reduced during the public review process.
NIPSCO ended up reaching a settlement with large business customers like U.S. Steel, NLMK Indiana and Walmart to shrink its revenue request by 30%. It is raising $2.08 billion a year to invest in capital projects including wind and solar farms as it looks to phase out coal-fired electricity production.
That’s a revenue jump of $257 million a year, but $111.6 million less than NIPSCO originally requested.
NIPSCO also will bring in another $769.5 million for infrastructure upgrades, such as modernizing the electric grid, replacing aging poles and lines and building new substations. NIPSCO says such investments will improve reliability and reduce the length of outages, after residents have expressed concerns about going as long as a week without power after recent storms.
NIPSCO said it has replaced more than 300 miles of aging underground cable and treated more than 300,000 wood poles as it works to shore up the transmission system.
NIPSCO had just raised electric rates by 10% over the past two years and increased natural gas bills by 7.1% last year on top of a 10% rate hike that was phased in during 2022 and 2023.
The Indiana Utility Regulatory Commission approved the rate hike after reviewing it for about 10 months, including hearing concerns from affected ratepayers at public hearings. People raised a number of concerns in light of inflation and rising costs generally — the Hobart school district, for instance, expressed concerns about a deficit of more than $300,000 that higher power bills would create.
The environmental and consumer group Citizens Action Coalition criticized the settlement, saying it resulted in an exorbitant rate hike for most while cutting a break to large, politically connected business customers.
NIPSCO also reached a separate agreement with LaPorte County, which dropped its objection to the settlement. The utility agreed to consider turning the Michigan City Generating Station into a combined cycle gas turbine or gas peaker generating plant and to look into keeping battery energy storage systems or other new energy technology at the site. NIPSCO further agreed to consider economic development project in LaPorte County, to invest up to $5 million to extend electricity to economic development sites and to invest $3.5 million to extend more electric service to the Kingsbury Industrial Park to facilitate more development there.
The rate hike also includes a new customer assistance program that will be available next year, eliminates deposits for low-income gas and waives electric reconnection fees.
NIPSCO customers struggling with the rate hike also can sign up for payment plans of up to 12 months, budget plans and credit arrangements. They also can get assistance from township trustees and the state's Low Income Home Energy Assistance Program, which is available during the winter season for households that are at or below 60% of the state's median income.
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