ILNews

Judges address 'public utility' questions

Back to TopCommentsE-mailPrintBookmark and Share

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.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

  2. As an adoptive parent, I have to say this situation was as shameful as it gets. While the state government opens its wallet to the Simons and their friends, it denied payments to the most vulnerable in our state. Thanks Mitch!

  3. We as lawyers who have given up the range of First amendment freedom that other people possess, so that we can have a license to practice in the courts of the state and make gobs of money, that we agree to combat the hateful and bigoted discrimination enshrined in the law by democratic majorities, that Law Lord Posner has graciously explained for us....... We must now unhesitatingly condemn the sincerely held religious beliefs of religiously observant Catholics, Muslims, Christians, and Jewish persons alike who yet adhere to Scriptural exhortations concerning sodomites and catamites..... No tolerance will be extended to intolerance, and we must hate the haters most zealously! And in our public explanations of this constitutional garbledygook, when doing the balancing act, we must remember that the state always pushes its finger down on the individualism side of the scale at every turn and at every juncture no matter what the cost to society.....to elevate the values of a minority over the values of the majority is now the defining feature of American "Democracy..." we must remember our role in tricking Americans to think that this is desirable in spite of their own democratically expressed values being trashed. As a secular republic the United States might as well be officially atheist, religious people are now all bigots and will soon be treated with the same contempt that kluckers were in recent times..... The most important thing is that any source of moral authority besides the state be absolutely crushed.

  4. In my recent article in Indiana Lawyer, I noted that grass roots marketing -- reaching out and touching people -- is still one of the best forms of advertising today. It's often forgotten in the midst of all of today's "newer wave" marketing techniques. Shaking hands and kissing babies is what politicians have done for year and it still works. These are perfect examples of building goodwill. Kudos to these firms. Make "grass roots" an essential part of your marketing plan. Jon Quick QPRmarketing.com

  5. Hi, Who can I speak to regarding advertising today? Thanks, Gary

ADVERTISEMENT