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Legal Briefs Nipsco Rate Case Consumer groups, including Citizens Action Coalition and United Senior Action, filed a complaint in the fall of 1999 calling for an investigation into NIPSCO's electric rates. Since then, state regulators have initiated a formal investigation to determine if NIPSCO's electric rates are reasonable, based on their costs.NIPSCO customers pay 50 percent higher rates on average than electric customers throughout Indiana. After thorough analysis of the company's costs for service, economists, hired as experts in the proceeding by consumers, filed their testimony the second week of June. In their analysis they found that NIPSCO is over-earning by $170 million, and rates should be reduced across the board by 15 percent. The Indiana Utility Regulatory Commission (IURC), the Office of Utility Consumer Counselor (OUCC) and experts hired by industrial consumers in northern Indiana have all reached similar conclusions. NIPSCO's expert, however, indicated that if the State decides to go forward with relief for customers, the utility would be forced to ask for a 24 percent rate increase. NIPSCO has garnered high rates to pay for the depreciation of the assets and now wants to inflate their value under the disguise of "fair value" and have the consumers pay again. Indiana is one of only a handful of states that recognize a "fair value" rate base. The vast majority of jurisdictions allow recovery only on the cost of the asset. CAC has developed a market study showing NIPSCO's rates are unreasonable and should be reduced by at least 17 percent, even given the "fair value" concept. Citizens Gas ARP Citizens Action Coalition continues to battle the proposal presented by Citizens Gas of Indiana. Citizens Gas is a public trust but has done nothing to build trust with their unbundling filing at the IURC. Under their plan, commonly called an alternative regulatory plan (ARP), Citizens Gas would allow others to sell gas to customers provided they complied with Citizens' stringent requirements. CAC has many questions concerning the plan. There has been no showing that any marketer has any interest in serving residential customers. As a result, customers could be left with only the choice of Citizens Gas or its affiliate. These companies would then be allowed to have lessened IURC review and customers would be exposed to higher gas prices. Currently CAC is working to ensure that if industrial customers purchase gas from other providers, industrial customers are the most attractive to marketers, that residential customers will not incur, increased costs.
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