Indiana consolidation creates opportunities to save for natural gas consumers
Kokomo Gas & Fuel, Northern Indiana Fuel & Light (NIF&L), Northern Indiana Public Service Company (NIPSCO), the Indiana Office of Utility Consumer Counselor (OUCC) and the choice program’s Natural Gas Marketers have reached an agreement to formally consolidate Kokomo Gas and NIF&L with NIPSCO.
The agreement will allow the nearly 80,000 Kokomo Gas and NIF&L residential, commercial and industrial customers to take advantage low gas costs as well as the same great programs, products and services currently offered to NIPSCO customers.
The consolidation will enhance customer programs and products, maximize the use of available resources, integrate management and administrative functions to improve the delivery of customer service and more effectively manage both utilities.
Other benefits from the consolidation include:
· Offering of energy efficiency, low]income assistance and alternative natural gas supply pricing options
· Universal bill format and style with helpful customer information included
· Reduction of one utility bill for 8,000 customers who receive electric service from NIPSCO and gas from NIFL
· Access to a 24-hour Customer Contact Center
· Web-based improvements for customer account management
· Combination of natural gas supply assets, resulting in greater supply diversity and reduced price volatility for customers
Based on finalization of the agreement by the Indiana Utility Regulatory Commission
(IURC, the changes are anticipated to take effect summer of 2011, but customers should have begun to receive updates and important next steps.
Proposed legislation will lead to rate increases for natural gas customers
On May 4, 2011, the House of Representatives passed Substitute House Bill 95 (Sub. HB 95), legislation that could potentially cost customers millions of dollars in higher Natural Gas bills over the years. Although the House Public Utilities Committee improved its content, the bill still makes it easier for natural gas utilities to increase distribution rates.
Sub. HB 95 does not impact customer’s Choice of Natural Gas Suppliers; instead, it affects the distribution portion of customers’ bills. These costs are for the delivery of natural gas through utility pipelines. Distribution costs include replacement and repair of existing infrastructure (pipelines) and other operating costs incurred by the utilities.
Despite changes to the draft legislation that have improved the content of the bill, the Office of the Ohio Consumers’ Counsel (OCC) still opposes the bill and is continuing to work with legislators to produce a more evenly balanced bill that will provide direct benefits to customers, as well as the utilities.
How Sub. HB 95 will impact customers:
· It will expose customers to the possibility of unlimited rate increases.
· It will limit opportunities for the OCC and other stakeholders to advocate for lower rates for customers by removing the requirement for a hearing.
· It will ease the process for natural gas companies to add extra charges (riders) to existing rates with fewer opportunities for advocacy groups to do a full review of the costs they are seeking to recover from customers.
· Utilities could renew existing rate plans beyond the term negotiated in currently valid agreements, and when costs may have been fully recovered and/or may be going down, without filing a rate case.
· It will limit the scope of audits for natural gas companies to an examination of the company’s natural gas purchasing or production policies. Changes that could potentially lower customer rates might not be considered.
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