COALITION LAUNCHES LEGAL CAMPAIGN TO LOWER NIPSCO ELECTRIC RATES 
NIPSCO Rates are Highest in Indiana, Among Highest in U.S.


JANUARY 27, 2000.  Today, the Citizens Action Coalition of Indiana (CAC) announced that it and a group of NIPSCO electric customers have filed a consumer complaint with the Indiana Utility Regulatory Commission (IURC). This filing marks the beginning of a "reverse rate case," and should ultimately result in rate reductions for NIPSCO customers, CAC believes. "Although electric rates in Indiana are, on average, among the lowest in the U.S., NIPSCO electric customers pay some of the highest electric rates in the nation.  The average Indiana ratepayer spends $65.46 for 1000 kilowatt-hours of electricity; a NIPSCO customer spends $95.22 for the same amount of electricity," said CAC Executive Director Christopher Williams. "This means NIPSCO customers have to dig significantly deeper than their counterparts around the state when it is time to pay their electric bill," said Williams. "We believe that the legal process of discovery will verify that NIPSCO has been charging confiscatory residential rates which they are using to finance speculative investments into both regulated and non-regulated ventures," he said. This will be the first time in 14 years that NIPSCO's electric rates have been reviewed by the IURC, said Williams. 

"Between 1992 and 1996, NIPSCO Industries common shareholders have enjoyed a total return on their investment of 79 percent, more than double the 34 percent total return provided by the utilities which make up the Dow Jones Utilities Average.  During the same time period, NIPSCO CEO Gary Neale's pay package doubled, from $617,954 to $1,279,748," said Williams. Williams said NiSource, NIPSCO's parent, is in the midst of a corporate buying spree, and has purchased regulated utilities such as Kokomo Gas and Fuel, Northern Indiana Fuel and Light and the Indianapolis Water Company. NiSource has also financed unregulated ventures which include financial services, power marketing, a company that incinerates waste tires, and the Sand Creek Country Club in Chesterton. 

"NIPSCO's electric rates would be unfair anywhere. But the Coalition finds it especially unfair that for 14 years NIPSCO has charged its confiscatory electric rates in an area where thousands of households already struggle with more than their share of economic obstacles," said Williams. Although the burden of proof in a reverse rate case is on the intervenors, Williams said that, based on his organization's track record, the public can be confident CAC will prevail. 

The 350,000-member organization's quarter-century of victories include having forced NIPSCO management to return $81 million to ratepayers over the cancelled Baily nuclear power plant, forcing PSI Energy to return $150 million to ratepayers over the Marble Hill nuclear plant,  and was also involved  in a 1999 settlement in which American Electric Power returned $55 million to ratepayers over the D.C. Cook nuclear plant. 

"NIPSCO management must significantly reduce rates, and give money back to the customers it is supposed to serve, " said Williams.  "Just how much money NIPSCO has overearned will be discovered when the IURC forces them to open their books, and justify their business practices." 
 

More on NIPSCO
NIPSCO electric rates are too high
Citizens Action Challenges NIPSCO on the facts 

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