Following a devastating Aug. 11 derecho that hit Northwest Indiana and left hundreds of thousands of residents without power, the Northern Indiana Public Service Company filed three electric rate increases with the Indiana Utility Regulatory Commission.
According to commission documents, NIPSCO filed three rate increases either on or after Aug. 11. One was filed Aug. 11, and the remaining two were filed Aug. 14 and 20.
The three rate increases will add up to $7.33 per month, according to IURC documents and Citizens Action Coalition Program Director Ben Inskeep.
“I think this illustrates a broader problem with Indiana policy and how we regulate our utilities,” Inskeep told the Post-Tribune Tuesday. “The general assembly has passed law after law over the past two decades that gives our utilities the ability to add these tracker mechanisms or build surcharge mechanisms that allow for these frequent rate changes in between base rate changes.”
Inskeep said the increases are trackers, which “allow the utility to recover expenditures on an ongoing basis by adjusting rates on a quarterly or biannual basis for certain categories of costs,” according to the Citizens Action Coalition’s website. Trackers allow utilities to recover costs, and if they underspend, they pass back a credit to customers.
“So, NIPSCO builds into their base rates that customers pay a certain amount for each of these three types of things that are covered by these trackers,” Inskeep said. “… Really, these trackers are a way to benefit NIPSCO shareholders by reducing uncertainty about cost recovery and reducing what’s called regulatory lag, which is the time period from when NIPSCO spends a dollar to the time period that they’re recovering that dollar plus the profit margin from customers.”
For the three trackers, one is for regional transmission organization adjustment, another is for fuel adjustment and the last is resource adequacy adjustment.
On Monday, Gov. Mike Braun asked the Office of the Utility Consumer Counselor to file a complaint and petition the IURC to investigate NIPSCO following prolonged power outages. Inskeep said that would be a “separate and independent investigation” that doesn’t impact these rate increases that are on a routine and schedule to specific statutory requirements.
However, this doesn’t mean that Northwest Indiana residents shouldn’t be frustrated, especially as NIPSCO customers pay the highest bills in the state, according to the IURC’S annual residential bill survey.
“It’s not only frustrating for customers in Gary to lose power for two weeks, but when the power is back on, they see that NIPSCO has three rate increases in the hopper,” Inskeep said. “That adds insult to injury. But, it’s also highlighting this problematic dynamic we have in Indiana, where utilities get everything they want from the general assembly, and consumers get very little protections and are paying very high rates.”
In a late Tuesday statement, NIPSCO disputed that the filings constituted a rate increase.
“The regulatory filings made in August are routine quarterly or semi-annual proceedings previously authorized by the Indiana Utility Regulatory Commission (IURC),” the company’s statement read. “These filings recover NIPSCO’s fuel costs, regional transmission organization costs and resource adequacy and reliability costs, as well as allow NIPSCO to pass back credits to customers resulting from the benefits provided by NIPSCO’s renewable energy resources, including production and investment tax credits and excess energy sales.”
Storm recovery efforts still underway
At about 4 p.m. Wednesday, 630 NIPSCO customers were still without power. Of those, 352 were Gary residents. Gary, Portage and Lake Station residents went the longest without power, according to previous updates from NIPSCO, as they were slated to receive power Tuesday, two weeks after the Aug. 11 storm.
Lake Station still had 32 people without power Wednesday afternoon, and Portage had 77.
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Following the Aug. 11 derecho, crews from Commonwealth Edison — or ComEd, Illinois’ largest electric utility — had about 410,000 people without power. The utility restored power in about five days, said spokesperson John Schoen.
ComEd called in about 2,000 contractors in addition to its employees to help. Following the completion of their storm restoration, Schoen said they put NIPSCO in touch with its contractors, and the utility worked with about 40 crews previously.
On Saturday, NIPSCO asked for 30 crews to help, Schoen said, and ComEd sent 32, which included 64 lineworkers and some support staff.
“All in all, it’s about 80 employees that are there right now working with NIPSCO to get their system back up,” he said.
NIPSCO said it is prioritizing completing necessary repairs as power restoration edges toward completion.
“We do not compare our restoration efforts to other utilities as each electric system, damage profile, service territory and restoration event is unique,” the company’s statement read. “Our focus remains on the extensive damage sustained across NIPSCO’s transmission and distribution systems and safely restoring service to our customers.”
United Steelworkers Local 12775, which represents NIPSCO workers, called for stronger investment in permanent local utility staffing, emergency preparedness, workforce development and public transparency in a Tuesday news release. The union said reliable utility service is essential to public safety, health care, education, economic development, manufacturing, emergency response and quality of life.
According to its release, the union wants increased local frontline staffing to meet approved regulatory levels; strengthened storm response capabilities and emergency preparedness; expanded workforce development opportunities; prioritization of qualified local workers and established regional contractors; greater transparency around staffing, vacancies, storm restoration performance, contractor utilization and workforce investments; and continued regulatory focus on reliability, workforce adequacy and emergency readiness.
“Investing in Local 12775 members and other qualified local utility workers is an investment in safer neighborhoods, faster restoration, stronger reliability, and family-supporting careers,” Union President Ryan Baker said in a news release. “Our members have earned the respect of their communities through their work ethic, technical skill, and commitment to service. They deserve the staffing levels, training, tools, and support necessary to continue doing that work at the highest level.”
In July 2011, more than 860,000 ComEd customers were without power due to a derecho that hit the Midwest, according to the baiduhai. Following that storm, ComEd began making “a lot of” investments to its system, Schoen said.
“This includes technology that we put on the grid that helps when there’s a circuit or on a beater, it’ll help sort of isolate that problem and reroute the power so that it doesn’t impact as many customers as it might have otherwise,” Schoen said.
The utility also installed a Hendrix cable, which is thicker and more tree resistant.
“This cable helps those braces sort of bounce off the lines instead of blasting right through them,” Schoen said.
However, the severity of the storm also impacts restoration, Schoen said, adding that the Aug. 11 derecho had 100-mile per hour winds and the soil this year was more saturated due to higher rainfall.
“That’s part of the reason why this storm was so impactful,” Schoen said. “But in any event, that technology is helping us prevent outages.”
This year, about 2.4 million ComEd customers were affected by weather, Schoen said, but if it weren’t for technology upgrades, the utility estimates that another 2.7 million would’ve been without power.
ComEd has meteorologists on staff who keep an eye on weather, so the utility is prepared for whenever the next major storm hits.
“We really feel that this sort of extreme weather is not a fluke,” Schoen said. “We think there’s a good chance that we’re going to be seeing more instances of this kind of extreme weather. So coming out of all the storms, we always look at the system, we always try to talk about what we can do better, (and) we always try to look for ways we can improve our processes.”