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Judges address 'public utility' questions

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In a case of first impression in this state, the Indiana Court of Appeals has determined that BP Products North America Inc.'s petroleum refinery plant in northern Indiana isn’t a public utility as defined by state statute when it acts as a sort of conduit and provides natural gas and other services such as steam and wastewater to other private companies nearby.

But that ruling also affirmed a regulatory commission’s finding that the oil company is serving as an indirect public utility when it sells water to a local city for processing and sale to local customers.

The unanimous ruling came today in BP Products North America, Inc. and United States Steel Corp. v. Indiana Office of Utility Consumer Counselor and Northern Indiana Public Service Co., No. 93A02-0905-EX-490, as an appeal from the Indiana Utility Regulatory Commission’s decisions in 2009.

In 2008, the IURC received a request from BP relating to its operations at the Whiting refinery plant along Lake Michigan. As part of its crude oil refining operation, BP generates electricity and natural gas obtained from Northern Indiana Public Service Co. to power its plant and it also transmits excess gas, electricity, steam, and water to adjacent and on-site entities through private contracts – such as the nearby U.S. Steel plant and other companies. The refinery also sends low pressure raw service water to the city wastewater treatment facility to process and pass along to customers.

The BP request asked the IURC to determine that it wasn’t acting as a public utility in providing these materials or services or alternatively that it could be considered a "public utility" under Indiana Code Section 8-1-2-1(a).

The state commission determined in May and June 2009 that BP was not a public utility in connection to its natural gas transportation to a tenant on its property, but that it was considered a public utility with its provision of steam, electricity, water, and wastewater and sewer services. The commission also found that BP was acting as a public utility when selling water to the city.

On appeal, the state’s intermediate appellate court disagreed, reversing the IURC decision on those points and finding the commission misapplied state statute and relevant caselaw.

The judges found that caselaw doesn’t support the principle that an entity that serves only itself isn’t a public utility, but that it’s one that is dedicated to public use under a common law duty to serve all who apply or an entity that may be “impressed with public interest.” Finding no Indiana cases directly on point, they turned to several from other jurisdictions such as Wisconsin and Pennsylvania that have interpreted what constitutes a public utility.

“Because BP served these selected companies – a special class of entities that did not make up the indefinite public – it was engaged in a private activity, not the provision of services directly or indirectly to the public,” Senior Judge John Sharpnack wrote for the panel, which included Judges Nancy Vaidik and Cale Bradford. “Thus, as to these entities, the Commission which erroneously interpreted both the controlling statutes and related caselaw, must vacate its orders and allow BP to proceed outside its jurisdiction.”

The judges saw BP’s contract with the City of Whiting in a different light. "The contract provides for the provision of water to an entity that is a mere conduit serving the undifferentiated public, at least indirectly. Accordingly, BP is acting as a public utility when it sells water to the City," wrote the judge.

On the issue of supplying electricity, the appellate court also found that the IURC had erred in determining that BP is an “electricity supplier” as defined by I.C. Section 8-1-2.3-1 – in large because it wasn’t a “public utility.”

The case is affirmed on the city water aspect and reversed and remanded on the other issues.

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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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