NAACP Gary Branch’s Lori Latham, (l-r) Michigan City NAACP’s La’Tonya Troutman, and Sierra Club’s Ashley Williams with petitions against rate hike

NIPSCO: Big industrial customers are not getting a rate decrease

Contributed By:The 411 News

More than the 12% electric rate hike for residential and commercial customers was on the minds of the several hundred northwest Indiana residents attending the public hearing on NIPSCO’s request to change its rate structures. The meeting at Hammond High Monday evening lasted 4 hours with testimonies from 49 speaking against the rate increase.

Opposition to the rate hike has galvanized a wide portion of the utility’s users. According to Indiana’s Office of Utility Consumer Counselor, NIPSCO’s new pricing will reduce costs to its large industrial users by 19% and make up those lost revenues with price increases for others.

Winners would be the big electricity consumers – BP, U.S. Steel, Arcelor Mittal, Praxair and NLMK Steel in Portage.

Nick Meyer, NIPSCO’s Director of External Communications said rates for the large industrial customers are not decreasing. “What’s happening is … the large industrial customers are purchasing less from us of the total electricity we generate. That leaves significant costs to be spread among all other customers. It’s important to keep those industrial users competitive because they are so important to our economy.”

Had NIPSCO not offered those options, the increase to residential customers would have been greater, Meyer said. “The way our infrastructure is today, industrial customers are paying more for the system they are not using. They are paying more for infrastructure that doesn’t serve them directly.”

“It is unfair for residential customers to be saddled with a major portion of this new increase. They just saw a 3% per month gas rate hike last year,” said Michigan City’s City Council President Don Przybylinski. He cited the average wage of $22,000 yearly for women in Michigan City. “I don’t understand tacking a 12% increase on them, but turn around and give industrial customers a 19% decrease.”

For his city, which now pays a little over a million dollars a year to the utility, the 12% hike would increase it by $175,000. “When talking to my city controller, he couldn’t answer where we’ll get the money.”

Many at Monday night’s hearing came from Michigan City and Jasper County, encouraged by the Sierra Club and the NAACP. Organizing began almost immediately after NIPSCO’s announcement of the hike with online petitions and knocking on doors. Michigan City was the first municipality to pass a resolution opposing the hike.

In a downstairs lunchroom, the groups served pizza and beverages for a preliminary meeting to the public hearing. The Sierra Club’s Ashley Williams remembered the public hearing for the gas hike. “We only had about a dozen people. It was a sad show of folks.”

“The best way to get NIPSCO to hear us is in numbers,” said La’Tonya Troutman, of the Michigan City NAACP. “This meeting will get our people comfortable and ready to testify.”

Both Michigan City and Jasper County are home to electricity generating plants that NIPSCO plans to close in the next 10 years. Jasper County’s R.M. Schahfer Generating Station in Wheatfield by 2023 and the Michigan City plant five years after that.

Both plants burn coal as fuel to generate electricity, releasing air pollutants known to worsen symptoms for those with heart and lung diseases. Troutman and the NAACP want the Michigan City plant closed sooner. “NIPSCO told us they paid millions of dollars for scrubbers and you’ll be okay,” Troutman said. “They want to close the plant in the white community, but leave the plant open 5 more years in the African-American neighborhood.”

City councilwomen from Gary, Rebecca Wyatt and LaVetta Sparks-Wade came to the same conclusion of unaffordability as did Przybylinski. “Our city has a median yearly income of $15,000. Our city is in a fiscal crisis,” Sparks-Wade said. “We are consistently shifting the burden of utilities, increases of all kinds to our taxpayers. Our city cannot afford it and our citizens cannot afford it.”

“Let me give you this fact how the increase will affect Gary,” Wyatt said. “The city pays $150,000 monthly for street lights, alone. Our January 2019 monthly bill was $217,000. If we do the math, rounding the monthly cost to $370,000 a month, we’ll come up with another $45,000 a month the city cannot afford.” She added, “Businesses can pass on their costs, but our households cannot.”

A possible rate hike this year doesn’t displease Jasper County’s Paul Norwine nowhere as much as the closing of Schahfer. The Jasper County councilman and high school teacher said, “Our county has a population of 32,000. Our biggest employer is NIPSCO. They also own much of the land and they’re the biggest taxpayer. What’s going to happen to our schools and the jobs of 552 people directly and indirectly employed by the plant?”

The public hearing in Hammond is part of the 10 month regulatory process a utility must undergo when customer prices are increased. NIPSCO announced its rate case October 31 and is now at the midway point. The Indiana Utility Regulatory Commission has 300 days to either approve or deny the rate changes.

The Office of Utility Consumer Counselor hosted the hearing and represents customers on rate cases heard by the IURC. The OUCC recommended in February NIPSCO keep rates the same for residents or reduce them.

At the same time the utility is transitioning from coal to the cheaper and cleaner fuels of natural gas, wind and solar, it is facing pressures from its big industrial customers that have the capabilities or are currently generating electricity of their own. BP’s Whiting Clean Energy already supplies electricity to its Whiting refinery and it invests heavily in solar and wind energy generation across the country.

Indiana’s three Fowler Ridge wind farms, near Lafayette, are owned by BP.

Violet Sistovaris, NIPSCO President said there is an art and science to rate cases. “NIPSCO seldom gets everything we ask for in rate cases. The plant closures won’t happen overnight. We will work with those communities to close the gaps.”

Story Posted:03/17/2019