NIPSCO rate case comes as change jolts industry

NIPSCO’s request for an 11.5 percent hike in residential electric rates filed recently with state regulators comes at a critical juncture for the utility industry in Indiana and nationwide.

New technology, such as solar and improved cogeneration, promises to disrupt utilities in traditionally regulated states like Indiana, said Adrian Moore, a vice president at the Reason Foundation.

In addition, industrial utility customers in Indiana are revolting against higher rates, and residential advocates want to see increased use of home generation and more energy conservation.

“You can’t keep the world just as it was in the 1950s,” Moore said, who has written on deregulation and disruptive forces like Uber ride-share. “If we took the same approach to other things as we take with utilities, we would still be using Betamax tapes in our VCRs and driving around in VW Beetles.”

Effectively, a second wave of utility deregulation is underway in the United States, Moore said. It’s not wholesale deregulation as in the 1990s, but incremental as lawmakers, regulators and utilities struggle to adapt.

Utilities are reminding everyone that someone must pay the cost of the electric generating plants, poles and wires that back up the new generating technologies and in some cases connect them to one another.

Joseph Hamrock, CEO of NiSource Inc., parent company for NIPSCO and utilities in six other states, said every new source of electricity generation has to be examined in light of the obligation of regulated utilities to serve all customers.

Whether it is a large cogeneration plant at a major industrial supplier or a home’s rooftop solar array, NIPSCO must provide backup, a connection to the grid, and capacity in case those customers decide to come back full-time to the utility, Hamrock said.

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