Gary's 14-Day Blackout: How NIPSCO Collected for Grid Maintenance, Skipped the Work, and Left a City in the Dark

Capital B and multiple outlets report that as of mid-recovery, more than 70 percent of the roughly 3,500 customers still without power countywide remained in Gary, a majority-Black city where the median household income is $38,700.^[1] Two weeks after the derecho, families were still washing laundry by hand, losing hundreds of dollars in spoiled food, and watching insulin spoil as residents dependent on electric medical devices scrambled to survive.^[4] Governor Mike Braun has ordered the Indiana Utility Regulatory Commission to investigate, stating plainly: "NIPSCO is a monopoly utility that Hoosiers pay every month with the expectation that it will use its considerable resources to maintain its system, prepare for severe weather and restore service as quickly as possible when disaster strikes. NIPSCO has failed to keep its end of the bargain."^[9]

The storm itself was severe: a 99-mph wind gust comparable to a Category 2 hurricane, paired with rain-saturated soil that uprooted trees crashing directly into an electrical system built on overhead power lines.^[3] But tree-caused outages are not weather surprises; they are the predictable result of deferred maintenance. A class-action lawsuit alleges that NIPSCO's vegetation management practices directly contributed to the scale of the devastation.^[5] That allegation invokes the simplest accountability question in utility regulation: what maintenance did the company collect money to perform, and what maintenance did it actually do? NIPSCO, like all investor-owned utilities operating under traditional cost-of-service regulation, earns its return on capital deployed and on operating costs allowed in rates. Vegetation management is an explicit line item. If the company collected depreciation and maintenance allowances for decades, paid those revenues out as shareholder dividends instead of trimming trees and inspecting poles, and then left a city without power for 14 days when storm damage arrived, the remedy is a prudence review: disallow the hardening or restoration costs that flow from imprudent past spending, and claw back shareholder earnings to fund the work that should have been done upfront.

This is not speculation. The PG&E record in California, documented in post-wildfire investigations and rate cases, shows the anatomy. The utility collected for vegetation management and system hardening, underinvested in both, distributed cash to shareholders, and when catastrophe struck, sought (and partly obtained) ratepayer-funded recovery riders. The Texas February 2021 blackout exposed the same pattern: years of deferred transmission maintenance and weather preparation, followed by mass-casualty failure and customer-funded rescue. Indiana's regulatory process must now demand that NIPSCO produce its actual vegetation-management and pole-inspection budgets for the past five years, compare them against what was collected in rates and depreciation, and identify which shareholder dividends were funded by maintenance dollars that never reached the ground. That evidence belongs in the Governor's investigation and any future rate case.

The comparison that sharpens the blade is municipal and cooperative utility reliability. Public power systems serving similar territories and climates consistently deliver lower outage minutes per customer (lower SAIDI, the industry metric for average outage duration) at lower cost per customer served. That control group proves that the problem is not the weather or the terrain; it is the structure that rewards a company for building and rebuilding, not for maintaining what it has. NIPSCO faces a pending regulatory moment. When the utility eventually files for a rate increase or a storm-hardening surcharge, the IURC should condition any approval on performance-based reliability standards: a symmetric penalty mechanism that puts NIPSCO's earnings at risk if it fails to meet SAIDI and SAIFI (outage frequency) targets, and credits shareholders only for beating them. Britain's Ofgem and Hawaii's 2020 framework show the model. A utility that knows its profits fall if storms knock out half a city will invest in vegetation and pole maintenance upfront, not after the fire.

What ratepayers in Gary and across Northwest Indiana deserve is not another apology from NIPSCO management or another promise to do better. They deserve a regulatory lever that makes underinvestment costly to shareholders and overinvestment cost-free only if it works. The class-action lawsuit will expose NIPSCO's spending records; the Governor's investigation must do the same. When those documents surface, the IURC should weave them into the next rate decision, disallowing costs born of past neglect and tying future returns to actual reliability outcomes. Until that happens, NIPSCO will continue to harvest depreciation and pay dividends while the poles rot.