The Indiana Supreme Court heard arguments in an appeal about Northern Indiana Public Service Company rate increases, with an intervenor arguing that the company failed to provide specific justification.
According to court documents, in June 2021, NIPSCO petitioned the Indiana Utility Regulatory Commission for approval of a five-year transmission, distribution and storage system improvement charges. The IURC granted its petition for approval in December 2021, and the commission has approved several plan updates and rate adjustments since then.
In May 2024, NIPSCO petitioned for a fifth rate adjustment and third transmission, distribution and storage system plan update, of which the Office of the Utility Consumer Counselor recommended approval. The NIPSCO Industrial Group — a coalition of large, industrial energy consumers in the utility’s service territory — opposed the increased costs.
The IURC approved the rate adjustment and plan update in October 2024, according to court documents. The industrial group appealed both the rate adjustment and plan update, alleging that NIPSCO planned to provide specific justification for the capital expenditure and cost increase, and the IURC failed to provide specific approval for “some of those cost increases.”
The Indiana Court of Appeals, in a Sept. 30, 2025, found no error and affirmed the IURC’s ruling.
“NIPSCO continued to rely on the cost justification finding from the earlier plan approval case at a lower level,” said Todd Richardson, attorney for NIPSCO Industrial Group. “The commission, clearly, recognized NIPSCO’s the deficiency in NIPSCO’s showing of continued justification, and the commission granted the relief anyway, because supposedly, no evidence to the contrary was presented.”
Indiana Supreme Court Chief Justice Loretta Rush said the IURC made a brief that included criteria NIPSCO met, and Rush asked Richardson if that satisfied the requirement. Richardson told Rush that it didn’t because the IURC relied on information NIPSCO presented earlier.
“The commission did not find NIPSCO’s evidence sufficient,” Richardson said. “They emphasized that it could have been more robust, and ultimately, the commission had to rely on the premise that no evidence to the contract was presented.”
NIPSCO previously testified that inflation has increased costs for items including material and labor, which led to rate increases, according to court documents. Richardson argued that NIPSCO is already compensated for the risk of inflation.
Brian Paul, NIPSCO’s attorney, said it was appropriate for the utility to include inflation projections in the increases because during and following the COVID-19 pandemic, inflation was unprecedented.
“This is not a case where NIPSCO is seeking to recover increases due to ordinary inflation,” Paul said. “This is a case where NIPSCO faced extreme cost increases due to events entirely beyond its control and for projects crucial for maintaining a safe, reliable system capable of serving a growing market.”
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Paul also said the industrial group’s argument that inflation shouldn’t justify recovery of cost increases is directed at the wrong body.
Rush asked Paul if he believes the IURC was wrong when the commission told NIPSCO to create a more robust justification in the future.
“Whether the commission thought we could do better does not answer the question before the court right now, which is whether there is substantial evidence in the record to support the commission’s recommendation that these cost increases were specifically justified,” Paul said.
Indiana Supreme Court Justice Geoffrey Slaughter asked Paul what specific justification is if it doesn’t require a more robust answer. Paul told him it’s a textual matter, and it’s a “wide open term” that leaves the IURC with the discretion to decide whether projects are specifically justified.
“In other words, why is it reasonable, under the particular circumstances, to recover these cost increases?” Paul said. “That has to be left, ultimately, to the commission’s expert judgment. … It’s a broad term with a broader meaning. We don’t know exactly why that is, but it may be because cost increases come in so many varieties and are so unpredictable.”
The Indiana Supreme Court will make a ruling at a later date.