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COA: IURC improperly approved utility’s 7-year plan

April 8, 2015

In the appeal of the Indiana Utility Regulatory Commission’s decision to approve rate increases requested by a northern Indiana utility group under a new statute, the Indiana Court of Appeals concluded the commission erred in approving a seven-year plan that only gave specifics about year one.

The commission approved two applications from Northern Indiana Public Service Co. to increase rates under I.C. 8-1-39, which allows a utility to petition for a tracker – a way to set rates – for certain proposed new or replacement electric or gas transmission, distribution or storage projects. The statute, known as a TDSIC statute, was enacted in 2013.

NIPSCO presented a seven-year plan pursuant to the statute, but only provided sufficient detail of the plan for year one. For the remaining years, the commission established a “presumption of eligibility” and required NIPSCO to annually update the plan through an informal process. The IURC also approved NIPSCO’s proposed rate increases. The Office of Utility Consumer Counselor and some of NIPSCO’s largest industrial customers appealed the IURC’s decision.

In  NIPSCO Industrial Group, and, Indiana Office of Utility Consumer Counselor v. Northern Indiana Public Service Company, et al., 93A02-1403-EX-158, the COA agreed with the appellants that the commission erred by approving the seven-year plan given its lack of detail regarding all the years. In addition, the order established a presumption of eligibility regarding the undefined projects, and there does not appear to be any statutory support for establishing such a presumption. Judge Michael Barnes also wrote that such a presumption inappropriately shifts the burden of showing the project’s eligibility for TDSIC treatment from NIPSCO to other intervening parties.

The judges also held that the commission exceeded its statutory authority by allowing the adjustment of the rate allocation factors based on transmission and distribution considerations.  The COA affirmed in all other respects, including that the plain language of the statute allows an average 2-percent increase in a 12-month period, not during the entire seven-year plan as the appellants argued.

The case is remanded for further proceedings.
 

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