IURC: NIPSCO gas customers to receive $4.08 million in rate credits

Indiana Utility Regulatory Commission

Indiana Utility Regulatory Commission press release:

NIPSCO gas customers to receive $4.08 million in rate credits

(Indianapolis – October 22nd) Northern Indiana Public Service Co. (NIPSCO) natural gas customers will receive billing credits totaling nearly $4.1 million in early 2010. The credits were ordered by the Indiana Utility Regulatory Commission (IURC) this week in concluding its annual review of NIPSCO’s gas cost adjustments.

In IURC Cause No. 41338-GCA 10, which entailed the review of natural gas commodity cost reconciliations for August 2007 through July 2008, the Indiana Office of Utility Consumer Counselor’s (OUCC’s) calculations showed that NIPSCO had over-collected $4.087 million for Unaccounted For Gas Costs (UAFG).

UAFG cost recovery is standard in gas utility ratemaking and addresses the difference between the amount of gas that goes into a utility’s distribution system and the amount that is actually metered as used. NIPSCO is allowed to collect $3 million annually for UAFG in base natural gas rates, as ordered in its last natural gas base rate case in 1988.

Indiana’s other major natural gas utilities, Citizens Gas and Vectren Energy Delivery, collect UAFG costs through their quarterly GCA proceedings and not through base rates. However, those costs are recovered under parameters established in base rate cases for those utilities that have concluded in the last two years.

Since 1999, NIPSCO’s GCAs have been filed on a monthly basis subject to refund and approved annually. NIPSCO is now transitioning to a quarterly gas cost review consistent with those of other Indiana utilities. This week’s IURC order requires NIPSCO to implement the customer credits through its GCA filing that will be effective for March, April and May 2010. The credits will not appear as specific line items on customer bills.

Other major issues in NIPSCO’s annual GCA review were uncontested, including the utility’s wholesale purchasing practices and efforts to mitigate volatility for the 2008-2009 winter heating season. The OUCC testified that NIPSCO’s efforts in those areas were properly calculated and in compliance with state law.

(IURC Cause No. 41338 – GCA 10)

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NIPSCO Natural Gas customers to receive a credit

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