NIPSCO Electric Customers May Soon See One Percent Increase in Cost

NIPSCO electric customers will see a one percent increase in their utility bills sometime in the future as a result of recently passed legislation requiring utility providers to present a seven-year plan for infrastructure improvement projects. According to Kathleen Szot, external communications manager for NIPSCO, all utility providers must list any improvements that they plan to make within the next seven years to their electric or gas system.

Szot said this includes studying their poles, lines, transmission towers and underground systems to find any equipment that might need replaced.

“These plans that we’ve been asked to put together are kind of a seven-year look at what things need fixing, need replacing on our system. The plan that we filed with the Indiana Utility Regulatory Commission is for our electric side, and basically, we did a study of the entire NIPSCO electric system and looked for areas that are in need of investment because of age and being prone to failure,” said Szot.

Szot said the overall goal of this plan is to allow them to prevent any hiccups with equipment failure in the future. As of right now, she said the plan is only for the electric side, but the gas improvement – and subsequent one percent gas service cost increase – will come later.

“Really, the goal of the plan is to ensure reliability of power. This plan is specific to the electric side, and it’s really going to hopefully continue to help us provide electric power in a consistent way by removing any barriers with older equipment or things that could be prone to failure,” said Szot.

There are a number of benefits to planning ahead, Szot explained. On top of allowing the company to assess the system ahead of time, finding deficiencies, planning purchase, and allocating the required resources, it also allows them to spread out the financial burden it will have on customers.

“It also allows us to flatten out any bill impacts for customers. Instead of having bigger spikes after spending a great deal of money on a project, we can kind of plan ahead a little bit better and flatten out those costs for our customers,” Szot said.

Szot said NIPSCO worked with an outside engineering firm to help identify potential risks in their grid, and they have submitted their seven-year improvement plan to the Indiana Utility Regulatory Commission for review. No changes in the cost of electric utilities will take place until the commission approves the plan.

Szot emphasized that this one percent increase has nothing to do with the Reynolds-Topeka Electric System Improvement Project. That, she said, is a separate project, and this increase is to improve their electric and gas services as a whole, essentially to replace old equipment that is prone to failure. The work will not start until 2014 and is expected to run through 2020.