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Court reverses NIPSCO industrial user rate increase

May 31, 2018

The Indiana Utility Regulatory Commission relied on the wrong metrics to calculate a rate increase passed on to large industrial users, the Indiana Court of Appeals ruled Thursday, reversing the rate hike.

Northern Indiana Public Service Company supplies electric and natural gas service to more than 460,000 customers in northern Indiana, including the NIPSCO Industrial Group, which represents a group of five of NIPSCO’s largest industrial customers. NIPSCO Industrial Group sued the utility after a rate increase was approved by the IURC last year. The increase was based on a total load calculation — which includes interruptible service users may opt for — rather than a firm load basis, the cost of more reliable and uninterruptable service.

The COA sided with industrial users who challenged the rate increase Thursday in NIPSCO Industrial Group v. Northern Indiana Public Service Company and Office of the Utility Consumer Counselor,  93A02-1711-EX-2735.

The IURC’s rate-increase ruling, Judge Patricia Riley wrote for the panel, “failed to comply with Indiana Code section 8-1-39-9(a)(1), which requires allocation of rate adjustment to be based on firm load, by approving NIPSCO’s computation which utilized an allocation based on total load.

“We conclude that the Commission exceeded its statutory authority by allowing a rate adjustment based on allocation factors computed on total load.”

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