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Duke can charge ratepayers for time construction delayed on Edwardsport plant

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The Indiana Court of Appeals has affirmed grant of Duke Energy Indiana’s request to include the amount spent during an 80-day delay in construction of the coal gasification plant in Edwardsport in a rate adjustment rider. Several parties intervened, claiming construction delays attributable to Duke should not be chargeable to ratepayers.

Citizens Action Coalition of Indiana, Save the Valley Inc., Sierra Club Inc. and Valley Watch Inc. appealed the Indiana Utility Regulatory Commission’s order approving Duke’s request to include power plant construction costs incurred April 1, 2012 – Sept. 30, 2012. The costs are included in a rate adjustment rider through implementation of a settlement agreement between Duke, the Office of the Utility Consumer Counselor and other entities over the total cost of the Edwardsport plant.

It was first estimated to cost $1.985 billion – in which construction and operating costs are recoverable from ratepayers – but the costs soared to $2.35 billion. The settlement agreement put a hard cap of $2.595 billion for construction costs to be included in rates over a 30-year period.

The plant, which began commercial operations in 2013, ultimately had an approved cost of $2.88 billion.

The interveners argued in Citizens Action Coalition of Indiana, Inc., Save the Valley, Inc., Sierra Club, and Valley Watch, Inc. v. Duke Energy Indiana, Inc., Indiana Office of Utility Consumer Counselor, et al., 93A02-1310-EX-835, that the commission applied an incorrect statutory standard that placed an undue burden on them when it approved the total of requested construction-related financing costs, despite the 80-day delay in construction.

“Our examination of the plain language leads us to agree with Duke that 8-1-8.8-12 concerns the initial application for financial incentives. We are not persuaded that, once a utility has demonstrated its eligibility for clean energy financial incentives, the Commission is obliged to go beyond a reasonableness or prudence review to conduct a line item review to ascertain ‘substantial documentation,’” Judge L. Mark Bailey wrote.  

“Interveners insist that this Court need not afford the Commission a high level of deference as to this matter. In other words, Interveners ask that we reweigh the evidence, find credible the testimony that Duke simply should not have let the delay happen, and order a reduction in the amount of construction costs allowed. This we cannot do. The allowance of costs is inherent in the ratemaking process and we accord deference to the Commission. The Commission did not act contrary to law when it found the ‘technical problems associated with human errors, equipment failures, or a combination of the two ... within the control of the Company or its contractors” did not preclude Duke’s recovery of its costs,’” he wrote.

The interveners also claimed the commission disregarded relevant caselaw by approving capitalized financing costs that allowed a return on capital contributed from ratepayers attributable to deferred taxes. But the Court of Appeals again affirmed the commission’s decision, pointing out that this issue has already been litigated.

“Ultimately, the Commission is charged with the independent oversight of ratemaking decisions. The Commission is in the best position to determine a proper rate of return on capital from utility investors, and we defer to their expertise where appropriate. Interveners were given a full and fair opportunity, in the context of the settlement proceedings and appeal, to demonstrate that deference would not be warranted in these circumstances because an improper mathematical computation allowed a return on customer investment. Having fully litigated the propriety of the AFUDC calculation in the prior appeal, Interveners are not entitled to a second bite at the apple,” Bailey wrote.

 

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  1. Looks like 2017 will be another notable year for these cases. I have a Grandson involved in a CHINS case that should never have been. He and the whole family are being held hostage by CPS and the 'current mood' of the CPS caseworker. If the parents disagree with a decision, they are penalized. I, along with other were posting on Jasper County Online News, but all were quickly warned to remove posts. I totally understand that some children need these services, but in this case, it was mistakes, covered by coorcement of father to sign papers, lies and cover-ups. The most astonishing thing was within 2 weeks of this child being placed with CPS, a private adoption agency was asking questions regarding child's family in the area. I believe a photo that was taken by CPS manager at the very onset during the CHINS co-ocerment and the intent was to make money. I have even been warned not to post or speak to anyone regarding this case. Parents have completed all requirements, met foster parents, get visitation 2 days a week, and still the next court date is all the way out till May 1, which gives them(CPS) plenty of to time make further demands (which I expect) No trust of these 'seasoned' case managers, as I have already learned too much about their dirty little tricks. If they discover that I have posted here, I expect they will not be happy and penalized parents again. Still a Hostage.

  2. They say it was a court error, however they fail to mention A.R. was on the run from the law and was hiding. Thus why she didn't receive anything from her public defender. Step mom is filing again for adoption of the two boys she has raised. A.R. is a criminal with a serious heroin addiction. She filed this appeal MORE than 30 days after the final decision was made from prison. Report all the facts not just some.

  3. Hysteria? Really Ben? Tell the young lady reported on in the link below that worrying about the sexualizing of our children is mere hysteria. Such thinking is common in the Royal Order of Jesters and other running sex vacays in Thailand or Brazil ... like Indy's Jared Fogle. Those tempted to call such concerns mere histronics need to think on this: http://www.msn.com/en-us/news/us/a-12-year-old-girl-live-streamed-her-suicide-it-took-two-weeks-for-facebook-to-take-the-video-down/ar-AAlT8ka?li=AA4ZnC&ocid=spartanntp

  4. This is happening so much. Even in 2016.2017. I hope the father sue for civil rights violation. I hope he sue as more are doing and even without a lawyer as pro-se, he got a good one here. God bless him.

  5. I whole-heartedly agree with Doug Church's comment, above. Indiana lawyers were especially fortunate to benefit from Tom Pyrz' leadership and foresight at a time when there has been unprecedented change in the legal profession. Consider how dramatically computer technology and its role in the practice of law have changed over the last 25 years. The impact of the great recession of 2008 dramatically changed the composition and structure of law firms across the country. Economic pressures altered what had long been a routine, robust annual recruitment process for law students and recent law school graduates. That has, in turn, impacted law school enrollment across the country, placing upward pressure on law school tuition. The internet continues to drive significant changes in the provision of legal services in both public and private sectors. The ISBA has worked to make quality legal representation accessible and affordable for all who need it and to raise general public understanding of Indiana laws and procedures. How difficult it would have been to tackle each of these issues without Tom's leadership. Tom has set the tone for positive change at the ISBA to meet the evolving practice needs of lawyers of all backgrounds and ages. He has led the organization with vision, patience, flexibility, commitment, thoughtfulness & even humor. He will, indeed, be a tough act to follow. Thank you, Tom, for all you've done and all the energy you've invested in making the ISBA an excellent, progressive, highly responsive, all-inclusive, respectful & respected professional association during his tenure there.

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