IURC Approves NIPSCO Natural Gas Rate Settlement

INDIANAPOLIS, Nov. 4, 2010 /PRNewswire/ — The Indiana Utility Regulatory

Commission (IURC) today approved a settlement agreement reached by Northern
Indiana Public Service Company (NIPSCO), the Indiana Office of Utility Consumer
Counselor (OUCC) and other key customer stakeholders to resolve NIPSCO’s pending
natural gas rate case. The settlement – filed on Aug. 24 – was also signed and
agreed upon by the NIPSCO Industrial Group, the NIPSCO Marketer Group and
Citizens Action Coalition of Indiana.

The settlement slightly decreases overall rates for all NIPSCO natural gas
customer classes while providing continued strong support for low-income
customer assistance, energy efficiency and conservation programs.

The newly approved gas base rates should be implemented in the November billing
cycle and will be reflected in the gas delivery portion of customer bills.

The settlement delivers not only lower rates but also new customer assistance
programs to be in place for the current winter heating season.

“We are pleased with the Commission’s decision, which recognizes the efforts
taken by all the parties involved to develop a constructive and customer-focused
solution that serves the interests of customers and the public at large,” NIPSCO
CEO Jimmy Staton said. “This approval provides a solid platform for continued
enhancements to customer service, reliability and our ongoing investment in
Indiana’s energy infrastructure. Additionally, this outcome upholds our
commitment to offering affordable and competitive gas rates in Indiana, which
helps attract and expand businesses here in northern Indiana.”

“The agreement approved today will give customers an overall rate decrease while
preserving funding for low-income assistance during these difficult economic
times,” said Indiana Utility Consumer Counselor David Stippler. “We received a
great deal of helpful consumer input in this case and are very pleased with
today’s outcome.”

“The issuance of this order provides much needed rate relief and improvements to
payment assistance the CAC has supported for some time,” said Citizens Action
Coalition of Indiana Executive Director Grant Smith. “It also offers a
reasonable solution to reducing seasonal volatility and a process for continuing
gas efficiency programs. It shows what can be achieved when ratepayers and
utilities work collaboratively.”

Key provisions approved by the IURC include:

– NIPSCO will reduce its overall natural gas rates by $14.8 million, based
on a $5 million reduction for residential customers and a $9.8 million
reduction for commercial and industrial customers.
– For NIPSCO’s 660,000 residential natural gas customers, the reduction
equates to a savings of approximately $7.50 annually per customer. Rates
for commercial and industrial classes will also be lower.
– NIPSCO will adjust its rate design for the residential class to reduce
seasonal volatility in customer bills and support energy conservation.
This change helps separate fixed monthly service costs from variable,
usage-driven costs, allowing customers to better track and manage energy
usage. This design will result in an increase to the utility’s monthly
gas delivery/service charge from $6.36 to $11.00. However, reductions to
the base rate’s volumetric charges will offset the change in the flat
monthly delivery/service charge, especially during the winter months.
– NIPSCO will revise its low-income customer assistance program to make it
similar in design to the Universal Service Program currently in place
for Citizens Gas and Vectren Energy Delivery, and at the same funding
level it contributes to the current Winter Warmth program. NIPSCO will
contribute 25 percent of the program’s costs, which under current usage
levels total approximately $1.5 million. The first $500,000 of NIPSCO’s
funding will be used to continue a hardship program for non-eligible
Low-Income Home Energy Assistance Program customers.
– NIPSCO will continue to offer a variety of natural gas energy efficiency
and conservation programs. NIPSCO currently provides $1 million in
annual funding for these programs and will provide an additional $1
million in funding for future extensions or enhancements to the programs
within 30 days following the issuance of the order approving the
settlement.
– The settlement addresses a number of additional natural gas rate related
matters, including revision to NIPSCO’s depreciation and amortization
expense levels, regulatory treatment of Alternative Regulatory Plan
(ARP) revenues and other items.

NIPSCO, with headquarters in Merrillville, Ind., is one of the nine energy
distribution companies of NiSource Inc. (NYSE: NI). With more than 712,000
natural gas customers and 457,000 electric customers across the northern third
of Indiana, NIPSCO is the largest natural gas distribution company, and the
second largest electric distribution company, in the state. NiSource
distribution companies serve 3.8 million natural gas and electric customers
primarily in seven states. More information about NIPSCO is available at
www.nipsco.com. NI-F.

The Indiana Office of Utility Consumer Counselor (OUCC) represents Indiana
consumer interests before state and federal bodies that regulate utilities. As a
state agency, the OUCC’s mission is to represent all Indiana consumers to ensure
quality, reliable utility services at the most reasonable prices possible
through dedicated advocacy, consumer education, and creative problem solving. To
learn more, visit www.IN.gov/OUCC.

Citizens Action Coalition of Indiana is a statewide nonprofit, nonpartisan,
member-based organization that was founded in 1974 and represents residential
consumers before the Indiana Utility Regulatory Commission and Indiana General
Assembly on utility, energy, environmental and health care policy issues. CAC is
located at: 603 E. Washington St., Suite 502; Indianapolis, IN 46204;
317-205-3535. (www.cictact.org)

SOURCE Northern Indiana Public Service Company