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Appellate court orders IURC to consider reasonableness of Avon ordinance

August 24, 2017

The Indiana Utility Regulatory Commission must consider the reasonableness of an Avon ordinance seeking to force a utility company to pay for the cost of moving power lines for a road construction project after the Court of Appeals ruled the commission erred in dismissing a complaint challenging the ordinance.

In 2014, the town of Avon informed Duke Energy Indiana LLC that it intended to make road and trail improvements near the intersection of County Rod 625 East and U.S. Highway 36 in Hendricks County and would need Duke to move certain utility poles, power lines and other equipment in that area. The equipment in question was owned by Duke, but was located either on land owned by Avon or in the town’s right-of-way.

Then in 2015, the Avon Town Council passed an ordinance shifting the costs of relocation of Duke’s facilities to Duke, with a $500 fine for violation of the ordinance. In response, Duke told the town it would not comply with the ordinance because it was unreasonable and contrary to Indiana law.

Avon then filed a complaint against Duke seeking declaratory and injunctive relief in the Hendricks Circuit Court, while Duke filed a complaint with the Indiana Utility Regulatory Commission. In its IURC complaint, Duke alleged that because the construction project involved a “multi-use trail,” it was the town’s responsibility to pay for relocation of the facilities. Duke also argued the IURC had jurisdiction over the matter pursuant to Indiana Code 8-1-2-101(a)(1).

The parties eventually entered into an agreement which held that Avon would tender the more than $103,400 in relocation costs to the trial court while Duke would relocate its facilities by Dec. 1, 2016. Duke also reserved the right to seek a ruling from the IURC, but the commission dismissed Duke’s complaint without prejudice, holding that “Commission involvement in a pending trial court matter would be inappropriate.”

Duke appealed, and the Indiana Court of Appeals reversed the IURC’s dismissal Thursday in Duke Energy Indiana, LLC v. Town of Avon, Indiana, 93A02-1704-EX-780.

In the unanimous opinion, Judge Edward Najam pointed to I.C. 8-1-2-115 (2017), which holds, “The Commission shall inquire into any…violation of the statutes of this state or the ordinances of any city or town…and shall have the power, and it shall be its duty, to enforce the provisions of this chapter… .”  Further, Section 101(a)(1) of that chapter holds the commission must set a hearing if a public utility makes a complaint against a municipal ordinance and must determine if the ordinance is unreasonable.

“We hold that Section 101(a)(1) and Section 115 unambiguously establish exclusive jurisdiction in the IURC to hear Duke’s complaint on the validity of the Ordinance,” Najam wrote. “…Accordingly, Indiana law directs that the subject matter of the dispute between Avon and Duke be decided by the IURC.”

Thus, the dismissal was reversed and the case was instead remanded with instructions “that the IURC proceed in a manner not inconsistent with this opinion.” The court specifically declined to instruct the commission to hold a hearing, as Section 61(a) of the statute in question allows it to enter an order without a formal public hearing.

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