FOR IMMEDIATE RELEASE
January 4, 2002
| FOR ADDITIONAL INFORMATION | |
| Regina D. Biddings Director, NIPSCO Communications (219) 647-6388 |
|
MERRILLVILLE - Northern Indiana Public Service Company (NIPSCO), a subsidiary of NiSource Inc. (NYSE: NI), today filed three petitions with the Indiana Utility Regulatory Commission (IURC). The proposals seek to establish:
Environmental Costs and Purchased Power Trackers
These proposed trackers would allow NIPSCO to manage the anticipated costs of required environmental upgrades and to recover the costs to purchase electricity for its customers. The environmental tracker is designed to identify and recover the costs that are deemed reasonable and necessary to comply with U.S. Environmental Protection Agency (US EPA) and Indiana Department of Environmental Management (IDEM) standards. A similar device would be used to allow the company to recover the costs associated with wholesale purchases to supply NIPSCO's electric customers.
Within the next 5 years, NIPSCO will be required to make substantial investments to comply with more stringent standards set forth in state and federal environmental regulations. These new mandates, which were approved by the US EPA, effective Dec. 10, 2001, will apply to all of NIPSCO's active generating stations. Compliance must be achieved by May 31, 2004.
"NIPSCO has always been a leader in environmental stewardship, while meeting the demands of our electric customers, even on the hottest day of the year," said NIPSCO President and Chief Executive Officer Barrett Hatches. "The proposals we have filed with the commission will help the company gain financial flexibility and maintain our environmental commitments."
Referring to the purchased power tracker, Hatches said, "NIPSCO has always been active in purchasing supplemental power on the wholesale market. If the IURC approves the petition, the Purchased Power Tracker would enhance NIPSCO's ability to employ additional tools to make cost-effective purchases."
Separate and distinct natural gas and electric companies
The third petition NIPSCO filed today proposes to create distinct natural gas and electric businesses, resulting in two separate companies.
"NIPSCO is taking this action to better reflect the emerging difference in gas and electric businesses," Hatches said. "The economy is in recession, affecting northwest Indiana's manufacturing sector and resulting in sharply reduced demand for electricity."
In addition, many industrial businesses are generating more of their own power. These factors contribute to a higher risk profile for NIPSCO's electric business. Creating a distinct electric business will allow the company to properly reflect its stand-alone risk profile. NIPSCO is also taking this action to prevent its natural gas customers from potentially subsidizing any future portion of electric operations.
"NIPSCO's gas and electric businesses are currently regulated separately and distinctly by the IURC," Hatches said. "However, reflecting the differences in operating and financial risks is difficult when the businesses are combined in one company. This filing merely reflects that reality. Creating separate gas and electric businesses will be transparent to NIPSCO customers."
No changes pending IURC decisions
Today's filings are the beginning of regulatory procedures, which are expected to take several months to complete. The three proposals will not affect the base electric or natural gas rates paid by NIPSCO customers. Any change to base rates requires the approval of the IURC.
NIPSCO, with headquarters in Merrillville, Ind., is one of the 10 energy distribution companies of NiSource Inc. (NYSE: NI). With approximately 670,000 natural gas customers and 430,000 electric customers across the northern third of Indiana, NIPSCO is the largest natural gas distribution company, and the second largest electric distribution company, in the state. NiSource distribution companies serve 3.6 million natural gas and electric customers primarily in nine states. More information about NIPSCO is available at www.nipsco.com