Adopted Settlement Continues NIPSCO Choice Program Indefinitely, Includes Enhancements

The Indiana Utility Regulatory Commission has approved a settlement which renews NIPSCO's alternative regulatory plan, and associated natural gas choice program, and extends the plan indefinitely.

Previously, the alternative regulatory plan and choice program were subject to periodic renewals.

The indefinite term will eliminate some of the business risk that exists for choice suppliers and allow them to offer more creative pricing options that may benefit customers, NIPSCO said.

The alternative regulatory plan will remain subject to review and discussion at the conclusion of the first year of the renewed term, and every 24 months thereafter.

Among the modifications under the newly adopted alternative regulatory plan is that capacity released to choice suppliers will be released on a seasonal basis, for the periods April through October and November through March for each year. Previously, such releases were quarterly. The potential re-allocation of assets, which may currently occur on the 15th of each month, will still occur if the triggers for such re-allocation are reached, similar to the current process.

The adopted settlement noted that parties have been engaged in a collaborative process to develop a web-based comparison of residential customer bills at an average level of consumption to compare the standard NIPSCO GCA price with each Choice Supplier serving the residential market. The comparison will provide customers with total commodity costs over a specified period without projections of future market conditions.

The parties expect to implement the new comparisons by April 1, 2012.

NIPSCO will continue to make semi-annual bill inserts regarding Choice and will also include this information in new customer welcome packets.

Under the adopted settlement, suppliers will be required to submit monthly marketing reports to NIPSCO, to be treated as confidential, which will identify the type of marketing media to be employed, and identifying the specific geographic area where any door-to-door marketing is to take place.

NIPSCO will also modify its collateral requirements under the settlement. Previously, the collateral calculation applicable to marketers used 10 average days usage on a seasonal basis. The new calculation will use five average days usage on a seasonal basis.

Additionally, increases in (or returns of) required collateral shall be provided within 14 business days, rather than five business days.

Suppliers shall now retain enrollment forms and voice recordings of enrollments and cancellations for a period of two years from the later of the date of the SAS Agreement or the expiration and/or cancellation of the service contract with the customer.

Consistent with the settlement concerning the expansion of choice to the former Kokomo Gas and Fuel and the Northern Indiana Fuel and Light Company Inc. territories (see earlier story), NIPSCO will add a delivery option for marketers similar to the service provided to NIPSCO's Price Protection Service (PPS, fixed/capped rate) and DependaBill (flat bill) customers.

Specifically, under this new option, suppliers will be required to use NIPSCO's asset mitigation program where they are invoiced by NIPSCO for their share of interstate pipeline and storage capacity on a monthly basis. These suppliers will receive the benefit of capacity release revenues as do GCA, PPS, and DependaBill customers. These Choice Suppliers will receive a credit on their monthly invoice for 85% of any capacity release revenues attributed to the capacity they are billed.

Testimony in the case reported that as of November 30, 2011, NIPSCO's Choice Program had participation of approximately 103,000 customers. Approximately 88,000 were residential customers and 15,000 were commercial and small industrial customers.

A survey conducted by NIPSCO showed that 75% of Choice customers polled are satisfied with the program.