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Indiana Office of Utility Consumer Counselor

OUCC > Electric > Key Cases By Utility > NIPSCO Electric Infrastructure Plan NIPSCO Electric Infrastructure Plan

A 2013 state law allows electric and natural gas utilities to seek IURC approval of 7-year infrastructure plans. If a utility’s plan is approved, it is then allowed to request rate increases every 6 months to cover the costs of projects in the plan. The law requires the IURC to consider the plans and increases within very short timeframes.

Northern Indiana Public Service Company’s (NIPSCO’s) electric utility was the first to seek approval of such a plan with accompanying rate increases. In February 2014, the IURC approved NIPSCO’s requests. NIPSCO implemented the first increase under the plan in December 2014, with a monthly residential electric bill rising 18 cents per 1,000 kilowatt hours (kWh).

The OUCC and industrial customers appealed the Commission’s orders. In April 2015, the Indiana Court of Appeals reversed parts of the orders and sent the cases back to the IURC for further review. The OUCC, industrial customers, and NIPSCO reached and filed a settlement agreement with the IURC a month later, which included a commitment from NIPSCO to refund all money collected under the 2014 orders with interest.

In September 2015, the IURC denied the settlement agreement. However, the Commission’s order requires NIPSCO to refund all money it has collected through electric rates under the 2014 orders.

NIPSCO may, at any time, seek approval of a new plan and accompanying rate increases.


A brief summary of the 2013 law

Indiana Code 8-1-39 allows electric and natural gas utilities to submit 7-year infrastructure improvement plans for IURC approval. It requires the IURC to rule within 210 days once such a request is filed.

  • Once a 7-year plan receives IURC approval, the utility may request incremental rate increases every 6 months to pay for the projects. The rate adjustment is referred to as the Transmission, Distribution and Storage System Improvement Charge (TDSIC). The IURC has 90 days to rule on such a request.

  • TDSIC rate increases are limited to no more than 2 percent of total retail revenues.

  • The TDSIC rate adjustment (or tracker) allows the utility to recover 80 percent of the costs as they are incurred. The remaining costs are deferred until the utility's next base rate case, which must be filed before the end of the 7-year period.


NIPSCO's requests

NIPSCO filed its 7-year electric system improvement plan in July 2013, in IURC Cause No. 44370. In a separately filed case, IURC Cause No. 44371, NIPSCO requested establishment of the methodology for calculating rate recovery of future costs. 

According to the utility's testimony and exhibits:

  • NIPSCO referred to the 7-year plan as its “Electric Infrastructure Modernization Plan.” It included a total of about $1.07 billion in capital improvement projects, including $314.2 million in transmission projects, $544.5 million in distribution projects, and $214 million in overhead and economic development.

  • Proposed projects throughout NIPSCO's electric service territory included new transmission and distribution lines, new substations, upgrades to existing lines and substations, and replacement of aging infrastructure (such as poles, transformers, etc.).

  • The annual rate increase amounts were projected to grow over the course of the plan, reaching 1.7 percent in 2020. The average annual percentage increase over the 7-year term was 0.9 percent.

The OUCC filed testimony in October 2013. (This news release offers a summary.) An OUCC news release inviting consumer comments was issued in September 2013.

The IURC issued orders on the 7-year plan and the methodology for calculating cost recovery in February 2014. In November 2014, NIPSCO received IURC approval for its first rate increase under the approved plan.

In March 2014, the OUCC filed a petition for reconsideration, which was denied three months later. The OUCC filed its brief with the Indiana Court of Appeals in August 2014. The Court issued its opinion in April 2015.

The IURC issued its order on remand in September 2015.


NIPSCO received approval of a 7-year natural gas infrastructure plan in a separate case.

All filings in the cases are available by visiting the IURC's Electronic Document System and entering the appropriate docket number.