NIPSCO seeks rate increases as hundreds remain without power in northwest Indiana

INDIANA - More than two weeks after severe weather hit northwest Indiana, and hundreds of people still didn't have power as of Wednesday, NIPSCO is requesting a utility rate increase.

NIPSCO requests three rate hikes

The backstory:

NIPSCO's filings with the Indiana Utility Regulatory Commission show it requested three separate rate hikes, starting August 11 when severe weather hit the region, with the last request filed August 20th. At the time of the last filing, hundreds of thousands of NIPSCO customers still did not have power. The filings show that if the IURC approves the rate hikes, the average NIPSCO customer would pay an additional $7.33 per month. 

The Aug. 11 storm and severe weather that followed affected approximately 374,500 NIPSCO customers, according to the utility. NIPSCO says the storm caused extensive damage to both its transmission and distribution systems and that crews, contractors and partners continue working to restore service.

NIPSCO told Fox Chicago in a statement: 

"NIPSCO is aware of social media posts suggesting that the company has filed for three rate increases during the recent storm recovery period. This characterization is not accurate. The regulatory filings made in August are routine quarterly or semi-annual proceedings previously authorized by the Indiana Utility Regulatory Commission (IURC). These filings recover NIPSCO’s fuel costs, regional transmission organization costs and resource adequacy and reliability costs, as well as allow NIPSCO to pass back credits to customers resulting from the benefits provided by NIPSCO's renewable energy resources, including production and investment tax credits and excess energy sales.  For more information about these billing items, please see the attached overview of NIPSCO Electric Bills, which describes costs related to Fuel, Resource Adequacy Adjustment and Regional Transmission Organization. The overview can also be found online here."

However, some state lawmakers don't buy that response from the utility. 

"This was absolutely the worst timing that they could do, and they could spin this any way they want," said Rep. Randy Novak, D-Michigan City. "This is not good timing. I don't care if it's something they were normally going to do. It was always just bad timing."

Novak supports Governor Mike Braun's calls for an investigation into NIPSCO. In a statement from the governor's office, Braun directed the Indiana Office of Utility Consumer Counselor (OUCC) to file a complaint and petition the IURC to investigate NIPSCO. Braun says the investigation should determine whether NIPSCO properly maintained vegetation and rights-of-way and whether money approved through IURC-regulated trackers was used for its intended purposes.

However, Novak believes the controversy surrounding NIPSCO is much bigger than the current power outage. He argues state lawmakers wrote utility laws that give utilities too much protection and leave the IURC without enough discretion to hold them accountable. 

"Their investors are guaranteed almost a 10% return on their money," said Novak. "So regardless of what this costs, regardless of just happened, they're still guaranteed a return on the investment. Now, who else has a company like that to where you can really have a blunder, a mix-up, you don't perform up to par, and yet you go, we're going to sleep good tonight because we still get our increase. We still get our return on our investment. I mean, something needs to be done."

Novak argues lawmakers may ultimately need to change Indiana's utility laws — not simply investigate what happened during this storm.

"Those laws and rules need to change or else the IURC has no control," added Novak. "The governor threatening people and the governor replacing members of the IURC and shuffling them around is not going to make the changes that need to be changed. It's the laws that need to change the govern the IRC, that's my concern."

For residents who went days or weeks without electricity, the issue is much more personal.

Cami Padilla, a spokesperson for the National Action Network's Indiana chapter, says the outages have raised serious questions about NIPSCO's preparation and response.

"For us, the issue isn't simply just that the rates went up, right? NIPSCO received approval for increased revenues in part to support generation, transmission, and distribution investments, so what we've just experienced in Gary, we all have the right to ask what were we paying for," said Padilla. "Where did those infrastructure dollars go? And did those investments actually make our system more reliable? And from the standpoint from Gary's point of view and from residents that you've probably spoken to, that's no."

Padilla says residents should not have to wait this long for basic electricity following a severe weather event. She is also planning to take the issue to Washington, D.C., where she says she intends to march and call attention to the experience of northwest Indiana residents. Her concerns echo what some residents have described during the outage — difficulty getting food, keeping refrigerated items cold and even taking care of basic needs without electricity.

"This moment seems a little bit striking because of what recently just happened in Gary, Indiana and across Indiana," said Padilla. "When we see these communities, predominantly Black communities still struggling for accountability and leadership. Those are the exact reasons why we're marching on Washington."

What's next:

The next major step is with the IURC. The OUCC has been directed to petition the commission for an investigation. If the IURC opens a formal proceeding, NIPSCO would be expected to provide information and participate in the regulatory process.