By Amanda Durish Cook
NiSource is seeking rate hikes across multiple states to cover hefty infrastructure investments after the company delivered a 13% increase in earnings during the first quarter.
The Merrillville, Ind.-based utility last week reported first-quarter earnings of $259.7 million ($0.77/share), compared to $230.6 million ($0.71/share) over the same period in 2017.
“Our systems performed well throughout the prolonged winter heating season, and we’re on pace to deliver on our earnings, capital investment and customer commitments in 2018,” CEO Joseph Hamrock said during a May 2 call with investors and analysts.
NiSource filed several rate hike applications with different regulators during and after the quarter, hoping to recoup the approximately $1.8 billion it plans to spend on infrastructure this year.
“The biggest driver of our strong financial performance continues to be the impact of our long-term infrastructure modernization investments, supported by solid regulatory outcomes and established infrastructure trackers,” CFO Donald Brown said.
Hamrock said NiSource expects to continue to invest $1.6 billion to $1.8 billion in its utility infrastructure every year until 2020. The investments should boost operating earnings 5 to 7% per year, he said.
Subsidiary Northern Indiana Public Service Co. filed a settlement last month in its pending base rate case with the Indiana Utility Regulatory Commission. Brown said the request is NIPSCO’s first natural gas base rate increase in more than 25 years and will improve pipeline safety and reliability (44988). If approved, the settlement would result in an annual revenue increase of $107.3 million through fixed charges on customer bills. NiSource expects a commission decision in the second half of this year.
NIPSCO also filed a seven-year gas infrastructure modernization plan with the IURC in early April that proposes $1.25 billion of investments through 2025. The program would recover the costs of modernizing underground natural gas infrastructure through a customer bill charge (44403). NiSource similarly expects a ruling in the second half of 2018.
NiSource subsidiary Columbia Gas of Pennsylvania also has a $47 million per year rate increase request on file with the Pennsylvania Public Utility Commission as of mid-March.
Brown said the case would “provide the company with an opportunity to earn a fair return on its infrastructure capital investments and enhance pipeline safety.”
In late April, the Public Utilities Commission of Ohio approved a rate increase allowing NiSource-owned Columbia Gas of Ohio to begin recovery on about $207 million of infrastructure investments made in 2017. Columbia Gas of Massachusetts also filed a request with the Massachusetts Department of Public Utilities to increase revenues by about $24 million annually in an effort to recover costs incurred from regulatory mandates and gas distribution infrastructure upgrades. The DPU on April 30 also allowed the Massachusetts subsidiary to recover $84 million of capital investments in its rates. Finally, Columbia Gas of Maryland is seeking a $6 million per year rate hike with that state’s regulators as of April 13 for make pipeline upgrades.
Hamrock said corporate tax cuts at the beginning of the year helped to lower its rate hike requests in Indiana, Pennsylvania, Maryland and Massachusetts, as well as the rate request for its gas infrastructure replacement program in Ohio.
