Kokomo — Indiana’s largest gas provider could absorb Kokomo Gas and Fuel and its 36,000 customers if the state supports the decision.

Kokomo Gas filed with the Indiana Utility Regulatory Commission to consolidate into Merrillville-based NIPSCO, the energy provider announced Thursday.

Both energy providers belong to the same parent company, NiSource. Kokomo Gas filed jointly with another NiSource subsidiary, Northern Indiana Fuel and Light in northeast Indiana, to become part of NIPSCO. The company already has customers in the Bunker Hill area of Miami County.

NIPSCO spokesman Nick Meyer said rates and employment would not change if the state allows the consolidation.

Several of NIPSCO’s executives began managing Kokomo Gas soon after NiSource acquired the company in 1992, Meyer said. NIPSCO has handled Kokomo Gas’ service calls since 2007.

Kokomo Gas would likely increase its monthly service fees an average of $5.90 for residential customers if the IURC does not approve the consolidation, he said.

Danielle McGrath, a spokeswoman for the regulatory commission, said the companies and the state’s representative for the customers will have to have a pre-hearing conference with the IURC before they know a timeline for a decision from the state.

Meyer said NIPSCO expects the IURC to decide on the consolidation within a year.

The Citizens Action Coalition, a consumer and environmental rights group, has petitioned other recent NIPSCO filings with the IURC, the most recent being the company’s filing to increase electricity rates.

NIPSCO originally sought approval to increase its rates for residential customers by 15.6 percent, but the regulatory commission lowered the ceiling to 10 percent.

Meyer said the rate increase would only apply to electricity bills, meaning it would not affect Kokomo Gas customers.

Kerwin Olson, program director for Citizens Action Coalition, said NIPSCO’s electricity rate increase could be a warning sign that the company might also increase gas rates at a later time.

The coalition has already petitioned a previous NIPSCO filing regarding its gas rates.

The company sought a 2.65 percent rate increase, but it agreed in a settlement with the coalition last week to decrease its rates by about $7.50 per year. The settlement awaits the regulatory commission’s approval.

“At the moment, we’re satisfied with the outcome,” Olson said. “What we’ve seen on paper looks good.”

Kokomo Gas customers will continue to receive the same service until the IURC approves a consolidation. NIPSCO will notify its customers of a change if one happens, Meyer said.

The energy provider says it would be able to offer its potential new Kokomo area customers better customer service, such as energy efficiency programs and improvements to web-based account services.

The state drew attention to NIPSCO’s customer service last week when the regulatory commission approved the company’s 10 percent electricity rate increase and pointed out the company’s low customer satisfaction rating.

The company ranked 114 out of 121 utility companies nationwide in an annual J.D. Power and Associates’ customer satisfaction survey.

Meyer said NIPSCO has been responding to the survey results and state’s criticisms by working on reliability, trying to resolve issues more quickly and offering more energy-efficiency programs, among other approaches.

He noted that J.D. Power’s most recent satisfaction survey has shown that the company ranked third in most improvement.

“However our scores in the index are not where we would like them to be,” he said. “But we have seen some improvements.”

• Daniel Human is the Kokomo Tribune business reporter. He can be reached at 765-454-8570 or at daniel.human@kokomotribune.com.