Capital Program Planning for Indiana Gas Utilities

by | Oct 21, 2026

Indiana · Natural Gas Utilities

Indiana lets you recover infrastructure spend fast — but only 2% a year, and only if it's justified.

The TDSIC tracker returns 80% of approved capital almost in real time, yet a 2% annual revenue cap and a commission that now rejects under-justified plans mean every mile of replacement has to earn its place. Aging main, decarbonization, and winter price swings all compete for the same constrained recovery. Invizion helps gas utilities re-sequence a capital portfolio in a click — and defend every project against the cap.

See how Invizion helps utilities See what Indiana utilities face Download the briefing (PDF)
The bottom line: Indiana gives gas utilities one of the fastest infrastructure-recovery tools in the country — the TDSIC tracker — but caps it at 2% of revenue a year and will reject plans it finds unjustified, as NIPSCO learned when its ~$741M gas plan was denied. The utilities that keep modernizing are the ones whose capital plans can re-sequence to fit the cap.
~2.0M1
Natural gas consumers in Indiana, about 1.87 million of them residential (2024).
$11.492
Indiana residential price per thousand cubic feet in 2025, against a $4.28 citygate price.
$120.9M3
NIPSCO's gas base-rate increase approved by the IURC in 2024 — below the $161.9M requested.
2%4
Annual cap on how much a TDSIC can raise a utility's total retail revenue.

The Indiana Landscape

Four forces are moving your project list at once

None of these waits for your next budget cycle, and all of them draw on the same capped pool of infrastructure recovery. The plan you filed last year may already be the wrong plan.

Safety — Aging Pipe

Replacing the last iron and bare steel, mile by mile

Nationally only about 1% of gas distribution pipe was still iron at the end of 2025;5 Indiana's LDCs are working down the remaining cast-iron and bare-steel main under TDSIC infrastructure plans first approved in 2014.6

With roughly 2.0 million gas consumers on the system,1 integrity and modernization work is continuous, not one-time — and PHMSA distribution-integrity duties keep it non-discretionary.

Transition — Decarbonization

Planning for throughput that may not grow

NiSource, NIPSCO's parent, has committed to cutting carbon emissions more than 90% by 2028 and is investing roughly $20 billion in regulated utility infrastructure over five years.87

Building electrification, efficiency, and long-run demand uncertainty pressure gas throughput even as the system needs capital — the stranded-asset risk that reshapes every long-horizon plan.

Supply — Price & Peaks

Commodity swings pass straight through the bill

Indiana residential customers paid about $11.49 per Mcf in 2025 while the citygate price was $4.282 — most of the bill is delivery, but the commodity share still moves with the market through quarterly gas cost adjustments.3

The state burns roughly 914 Bcf of gas a year, heavily winter-weighted,9 so design-day, storage, and peaking decisions sit right alongside the replacement backlog.

Capital — Recovery

TDSIC recovers 80% now — if the costs hold up

Under the TDSIC statute a utility recovers 80% of approved infrastructure spend through a periodic tracker and defers 20% to its next rate case,10 but total TDSIC increases are capped at 2% of retail revenue a year.4

The guardrails have teeth: the IURC denied NIPSCO's roughly $741 million gas TDSIC plan in 2026 for a lack of cost justification.3 A plan that can't be defended doesn't get recovered.

Who Delivers Indiana's Gas

A few large investor-owned LDCs, a big public trust, and a tail of municipals

Indiana's gas is delivered by IURC-regulated investor-owned utilities, the publicly governed Citizens Energy Group in Indianapolis, and dozens of municipal systems. The pressures are shared; the accountability path differs.

Investor-owned gas LDCs

Rates & capital recovery regulated by the IURC

NIPSCO (NiSource) ~900,000 gas customers · 30+ northern counties · the state's largest gas LDC11
CenterPoint Energy Indiana North ~570,000 gas customers, central/northern Indiana (formerly Indiana Gas / Vectren North)12
CenterPoint Energy Indiana South ~110,000 gas customers, southwestern Indiana (formerly SIGECO / Vectren South)12
Ohio Valley Gas 16 east-central, southern & western Indiana counties14

NIPSCO alone serves roughly 900,000 gas customers, and NiSource plans about $20 billion of regulated infrastructure investment over five years.117

Public trust & municipal systems

Publicly governed, not investor-owned

Citizens Energy Group (Citizens Gas) ~266,000 gas customers in Marion County · run as a public charitable trust13
Municipal gas utilities Numerous city- and town-owned systems statewide15
Opt-out municipal systems Municipalities that withdrew from IURC base-rate jurisdiction15

Citizens Gas has operated on base rates set in 2011, among the oldest of any regulated Indiana gas utility.17

Rate-Setting & Recovery

Every capital dollar has to clear the tracker — and the cap

Indiana pairs one of the most utility-friendly recovery mechanisms in the country with a hard revenue cap and a commission willing to say no. The question stays the same: why this project, why now, why at this cost?

  • Indiana Utility Regulatory Commission (IURC) sets rates and reviews infrastructure trackers for the investor-owned gas LDCs; the Office of Utility Consumer Counselor (OUCC) represents ratepayers.15
  • TDSIC (IC 8-1-39) lets utilities recover 80% of approved infrastructure spend through a periodic tracker and defer 20% to the next rate case,10 subject to a 2%-of-retail-revenue annual cap.4 CenterPoint's North (Cause 45611) and South (Cause 45612) gas plans, first authorized in 2014, run as multi-year (five-year) programs.616
  • NIPSCO's 2024 gas rate order (Cause 45967) granted a $120.9 million increase, below the $161.9 million requested; its roughly $741 million gas TDSIC plan (Cause 46342) was later denied for lack of cost justification — approvals are not a formality.3
  • CenterPoint Energy Indiana South's 2021 settlement (Cause 45447) added $20.5 million against a $29.6 million request and cut the residential fixed charge from $25.10 to $16.50.16

How The Capital Gets Recovered

In Indiana, the surcharge is the funding story

Little federal grant money flows to gas distribution here, so the capital-recovery mechanisms — not grants — are what fund modernization. That makes tracker discipline the whole ballgame.

  • TDSIC tracker is the primary capital-recovery vehicle: 80% of approved spend recovered on a rolling basis, 20% deferred — all under the 2% annual revenue cap.104
  • ~$20B NiSource five-year capital plan — 100% regulated utility infrastructure across its footprint, with a large share landing at NIPSCO in Indiana.7
  • NIPSCO 2024 base-rate increase of $120.9M (Cause 45967) funds ongoing gas system work embedded in base rates.3
  • Ohio Valley Gas won roughly $12 million (a ~35% request) in its 2024 rate case (Cause 46011) and recovers infrastructure through its own long-term plan (Cause 45400).14
  • CenterPoint Indiana North's TDSIC (Cause 45611) continues to recover bare-steel and cast-iron main replacement on a rolling basis.6

Where Invizion Fits

Turn Indiana's gas-system decisions into a defensible capital plan

Invizion is scenario-based capital portfolio optimization built for utilities. When a replacement mandate accelerates, throughput forecasts shift, or a decarbonization ruling lands, you don't re-plan by hand for weeks — you model it and decide with a record to stand behind.

1

Model the “what-if” before it's forced on you

A faster main-replacement schedule, a gas-line-extension ban, an RNG mandate — build the scenario and see the impact on the whole portfolio, side by side with today's plan.

2

Re-sequence 500 projects in a click

When priorities move, Invizion re-orders the portfolio automatically — accelerating, stretching, or deferring projects against the constraints you set, not weeks of spreadsheet surgery.

3

Give regulators or your board a defensible record

Every prioritization and trade-off is captured. When you're asked “why this project, why now,” the answer is documented — not reconstructed after the fact.

Indiana's Gas Sector, In Brief

Questions Indiana gas utility leaders are asking

Short, sourced answers — the same facts we dig into with utilities looking at their capital programs.

Who regulates natural gas rates in Indiana?
The Indiana Utility Regulatory Commission (IURC) sets rates and reviews infrastructure trackers for investor-owned gas LDCs such as NIPSCO and CenterPoint, while the Office of Utility Consumer Counselor represents ratepayers. Citizens Energy Group is a publicly governed charitable trust.1513
What is the TDSIC and how does it work?
The Transmission, Distribution and Storage System Improvement Charge (IC 8-1-39) lets utilities recover 80% of approved infrastructure spend through a periodic tracker and defer 20% to the next rate case, but total TDSIC increases can't raise retail revenue more than 2% in any twelve-month period.104
Which utilities distribute natural gas in Indiana?
NIPSCO is the largest with about 900,000 customers; CenterPoint Energy Indiana serves roughly 680,000 across its North and South territories; Citizens Energy Group serves about 266,000 in Marion County; and Ohio Valley Gas plus municipal systems cover much of the rest.11121314
Why did the IURC reject NIPSCO's gas TDSIC plan?
NIPSCO's roughly $741 million multi-year gas TDSIC plan (Cause 46342) was denied in 2026 for a lack of justification of costs — a reminder that Indiana's fast-recovery mechanism still turns on being able to defend each project.3
What's driving Indiana gas capital plans right now?
Three things at once: replacing the last cast-iron and bare-steel main under PHMSA integrity duties,56 planning for flat-to-declining throughput as NiSource pursues deep decarbonization,8 and doing both inside the TDSIC's 2% annual recovery cap.4
How does Invizion help Indiana gas utilities plan capital?
Invizion is scenario-based capital portfolio optimization for utilities. It lets you model how a TDSIC cap, a denied plan, a decarbonization scenario, or a winter cost spike reshuffles your whole project list, re-sequence the portfolio automatically against the 2% ceiling, and keep a defensible record of every trade-off for the IURC or your board.

Go Deeper

Related from Invizion

Demo

See Invizion in Action

A 3-minute look at scenario optimization on a 500-project portfolio.

Learn more → Insights

Capital planning insights

Why rating agencies score your CIP, and what a defensible capital plan looks like.

Read the insights → By State

Gas Utilities briefings

What utilities face state by state — supply, funding, compliance, and rate scrutiny.

Browse the briefings →

About the Author

GB

Guy Barlow

President, Invizion

Guy Barlow leads Invizion, a capital lifecycle management platform for water and wastewater utilities. He has spent two decades at the intersection of utility capital programs, funding, and analytics, helping utilities make faster, more defensible capital decisions.

Explore Further

See how utilities keep capital plans defensible

Invizion helps utilities model, optimize, and defend their capital programs. Explore how it works, or read our latest thinking on capital planning across the utility sector.

Explore Invizion

This briefing was last reviewed September 2026.

Sources

  1. U.S. Energy Information Administration — Indiana natural gas number of consumers (residential ~1,866,080; total ~2,038,081), 2024. www.eia.gov
  2. U.S. Energy Information Administration — Indiana natural gas prices: residential $11.49/Mcf, citygate $4.28/Mcf, 2025. www.eia.gov
  3. Indiana OUCC — NIPSCO gas key cases: 2024 base-rate order (Cause 45967) $120.9M vs. $161.9M requested; ~$741M gas TDSIC (Cause 46342) denied; quarterly GCA (Cause 43629). www.in.gov/oucc
  4. Indiana Code IC 8-1-39-14 — TDSIC may not raise a utility's total retail revenues more than 2% in a 12-month period. law.justia.com
  5. PHMSA — Pipeline Replacement Background: ~99% of U.S. gas distribution pipe was plastic or steel at the end of 2025, ~1% iron. www.phmsa.dot.gov
  6. Indiana OUCC — CenterPoint Energy Indiana North (Vectren North / Indiana Gas): base rate Cause 45468 (2021), TDSIC Cause 45611 (approved April 2022, five-year), first gas TDSIC approved 2014. www.in.gov/oucc
  7. NiSource Investor Relations — ~$20 billion of 100% regulated utility infrastructure investment over five years. investors.nisource.com
  8. NiSource (overview) — commitment to cut carbon emissions more than 90% by 2028; ~3.5 million natural gas customers across six states. en.wikipedia.org
  9. U.S. Energy Information Administration — Indiana natural gas consumption/deliveries ~913,801 MMcf (2024). www.eia.gov
  10. Indiana Code IC 8-1-39-9 — timely recovery of 80% of approved capital expenditures and TDSIC costs, with the remaining 20% deferred to the next general rate case. law.justia.com
  11. NIPSCO — About Us: ~900,000 natural gas customers, 30+ northern Indiana counties, the state's largest gas distribution company. www.nipsco.com
  12. Vectren / CenterPoint Energy Indiana — ~680,000 Indiana gas customers (~570,000 central Indiana, ~110,000 southwestern Indiana). en.wikipedia.org
  13. Citizens Energy Group — natural gas service to ~266,000 homes and businesses in Marion County. info.citizensenergygroup.com
  14. Indiana OUCC — Ohio Valley Gas key cases: 16 east-central/southern/western counties; 2024 rate case (Cause 46011, ~$12M / ~35% request, order Nov. 6, 2024); infrastructure plan (Cause 45400). www.in.gov/oucc
  15. Indiana Utility Regulatory Commission — Energy Division / Natural Gas Industry (regulator of jurisdictional gas utilities). www.in.gov/iurc
  16. Indiana OUCC — CenterPoint Energy Indiana South (Vectren South / SIGECO): base rate Cause 45447 settlement (Oct. 6, 2021) $20.5M vs. $29.6M requested; residential fixed charge cut $25.10→$16.50; TDSIC Cause 45612. www.in.gov/oucc
  17. Indiana OUCC — Citizens Gas key cases: current base rates set in 2011 (Cause 43975). www.in.gov/oucc