44970 IURC RESPONDENTS EXHIBIT NO 2 10 03 2017

I am Vice President of 4 Regulatory Policy for NIPSCO.. Upon my graduation from Alma College, I was employed by NiSource Corporate Services Company "NCS" in various positions including F

VERIFIED SETTLEMENT TESTIMONY OF TIMOTHY R CAISTER

IURC

2 Al My name is Timothy R Caister My business address i~~'-~/~~~ -:615

3 Street, Suite 600, Indianapolis, Indiana 46204 I am Vice President of

4 Regulatory Policy for NIPSCO

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Please briefly describe your educational and business experience

I am a graduate of Alma College in Alma, Michigan, with a Bachelor of

Arts degree I received my Juris Doctor from Chicago-Kent College of Law

at the Illinois Institute of Technology in December 2004 I have also taken

courses towards a Masters of Business Administration at the Stuart

Graduate School of Business at the Illinois Institute of Technology Upon

my graduation from Alma College, I was employed by NiSource

Corporate Services Company ("NCS") in various positions including

Federal Regulatory Policy Specialist and Manager of Regulatory Policy

After graduating from Chicago-Kent, I was employed by NCS as an

attorney providing regulatory legal support to NIPSCO' s gas and electric

businesses in proceedings before the Indiana Utility Regulatory

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Northern Indiana Public Service Company

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1 Commission ("Commission") In June 2007, I accepted a position as

2 Associate General Counsel with Ameren Services Company (" Ameren")

3 in St Louis as part of its Federal Regulatory Team In that position, I

4 handled a variety of legal and regulatory issues including those associated

5 with the Midcontinent Independent System Operator, Inc ("MISO"), of

6 which Ameren Corp.'s utility subsidiaries are members Specifically,

7 during my tenure at Ameren I was responsible for advising on matters in

8 front of the Federal Energy Regulatory Commission ("FERC") and

9 associated wholesale power and transmission contracts I returned to NCS

10 in November 2008 as Director of Regulatory Policy, which was

11 transitioned to NIPSCO in January of 2009 I was promoted to my current

12 position of Vice President of Regulatory Policy on September 1, 2016

13 Q3 Have you previously testified before this or any other regulatory

15 A3 Yes I have previously submitted testimony in requests for new

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environmental projects in Cause No 44311, new critical infrastructure projects in Cause No 44340, a spaceheating discount transition plan in

Cause No 44436 as well as for approval of new and revised tariffs and

1 riders in Cause Nos 42348, 42480 and 44520 I also previously submitted

2 testimony in Cause No 43566 regarding the Commission's demand

3 response generic investigation, and in Cause No 43426-Sl regarding

4 MISO I also submitted testimony in support of settlement agreements in

5 Cause Nos 38706-FAC80-S1 and 43674 I have submitted testimony

6 regarding demand side management in Cause No 43912, testimony

7 regarding feed-in tariffs and net metering in Cause No 43922 and

8 testimony regarding an asset sale in Cause No 43989 I also submitted

9 testimony regarding NIPSCO' s request for approval of a Green Power

10 Rider pilot program in Cause No 44198 as well as NIPSCO's semi-annual

11 adjustment filings (Cause No 44198-GPR-X) and modification of

12 NIPSCO's Green Power Rider in Cause No 44520 I submitted testimony

13 in NIPSCO' s electric and gas Transmission, Distribution, and Storage

14 System Improvement Charge tracker proceedings (Cause No

44733-15 TDSIC-X and Cause No 44403-TDSIC-X) Most recently I submitted

16 testimony in NIPSCO' s federal mandated CCR and ELG compliance plan

17 filing in Cause No 44872

18 Q4 What is the purpose of your testimony in this proceeding?

Northern Indiana Public Service Company

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1 A4 The purpose of my testimony is to explain why the Stipulation and

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Settlement Agreement (the "Agreement") executed between NIPSCO and the Pipeline Safety Division of the Indiana Utility Regulatory Commission (the "Commission") (the "Division") (collectively, the "Settling Parties")

in consistent with the public interest and should be approved

6 QS Please provide an overview of the Agreement

7 AS The Agreement was reached between NIPSCO and the Pipeline Safety

8 Division (the "Division") of the Commission and reflects resolution of all

9 issues associated with two Notices of Potential Violation issued by the

10 Division on November 30, 2016 alleging 261 individual violations of

11 specific state and federal performance standards related to the locating of

12 underground facilities Under the Agreement, NIPSCO admits those

13 violations and has agreed to commitments in four principal areas:

14 communications, information exchange, pipeline safety management

15 systems, and civil penalties Mr Stone provides additional detail about

16 each of those commitments in his testimony

17 Q6 Why has NIPSCO chosen to address these issues through settlement?

1 A6 NIPSCO has not disputed any of the facts underlying the specific damages

2 at issue, and is focused on improving its damage prevention and pipeline

3 safety performance consistent with its obligation to provide safe and

4 reliable service to its customers NIPSCO recognizes that it is important to

5 continue its efforts to reduce the number of damages to its underground

6 facilities To that end, it made more sense to work with the Division to

7 improve not only NIPSCO' s performance in this area but to also improve

8 the level of communication and information exchange so that NIPSCO

9 and the Division can help each other develop the best program

10 performance possible

11 Q7 Is the Agreement in the public interest?

12 A7 Yes The Agreement is in the public interest because it promotes

13 implementation of best practices in damage prevention including

14 improved communication and development of an enhanced safety culture

15 around pipeline safety and compliance consistent with industry leading

16 practices The focus of the Agreement is on improvement and facilitation

17 of safety and promotion of public awareness Finally, payment of a

18 significant civil penalty penalizes NIPSCO for violations of state and

Northern Indiana Public Service Company

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1 federal performance standards and expectations This payment is made in

2 recognition of the fact and resolves past violations as alleged in the

3 Notices of Probable Violation

4 In addition, it is important to note that the Agreement does not solely

5 address past issues or violations Rather, it also incorporates a prospective

6 mechanism or matrix for assessing future damages The Agreement

7 would be in the public interest with this aspect, but it does not stop there

8 To the extent NIPSCO is able to achieve specific milestones relative to

9 those damage metrics, NIPSCO is able to mitigate or eliminate the level of

10 penalties through 2019 This is aligning the public interest with NIPSCO's

11 performance insofar as improved performance leads to less or no

12 penalties By rewarding achievement of industry leading performance

13 across the full spectrum of damage prevention activities including public

14 outreach and excavator engagement, the public interest is well served

15 through improvements achieved in safety and construction practices

16 When considered, the Agreement is in the public interest for the reasons

17 stated above

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1 Q8 Does this conclude your prefiled settlement testimony?

2 AS Yes

Indiana Public Service Company, affirm under penalties of perjury that the foregoing representations are true and correct to the best of my knowledge, information and belief

Dated: August 3, 2017

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