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Former Indiana Utility Regulatory Commission Chair Andy Zay filed a lawsuit Monday against Gov. Mike Braun and other members of his administration, alleging they improperly fired him last week.
The lawsuit filed in Marion County Superior Court says that the Braun administration did not show cause when it fired Zay, a former state lawmaker. And the suit accuses the Governor’s Office of engaging in prohibited conversations with Zay about a case in which AES Indiana is seeking a rate increase.
Zay has asked the court to immediately reinstate him to his role on the IURC, to which Braun appointed him in January. Initially, Braun named Zay to chair the utility commission, but after Zay voted to approve a $71 million rate hike for AES Indiana, the governor removed him as chair, leaving him on the panel. Then on Aug. 3, Braun fired Zay from the commission.
The suit also asks a judge to remove Commissioner Josh Bain, who was appointed last week to replace Zay.
A spokesman for the governor did not provide immediate comment.
The State Personnel Department told media outlets last week that Zay was removed for “multiple potential violations of state policy; including failing to file a required financial disclosure after his removal as Chair, improperly awarding payments and personal gifts to employees, and directing staff to alter a public meeting agenda without consulting the new Chair.”
Zay denied in the suit that he violated any law or policy. He said he had already satisfied his financial obligations, was within his right to put an item on the agenda as a commission member, did not make payments to IURC employees and that the “gifts” to employees were $8 Starbucks gift cards on their birthdays.
The firing came shortly before the IURC was set to consider a motion to reopen the AES rate case, which the IURC approved 3-1.
Braun publicly scolded the IURC for that decision and asked the Office of Utility Consumer Counselor, or OUCC, to file a petition for a rehearing of the case.
After the governor demoted Zay, he appointed Commissioner Anthony Swinger, who had abstained from the AES case, to serve as chair.
The commission was expected to consider a petition for rehearing last week, but the issue was removed from the agenda after Zay was fired.
Swinger told reporters Wednesday that he removed that item from the agenda because there was not a three-person consensus on a decision. Swinger, who had been involved in the case while working for the consumer counselor’s office, said he had been “walled off” from the IURC case.
Commissioner David Veleta, who also voted in favor of the hike, announced his plans to resign from the IURC shortly after Braun’s statements on the AES vote. Veleta is set to be replaced by Joby Jerrells, chief counsel of the advisory division at the Indiana Office of the Attorney General.
So unless Zay is reinstated, two of the three commissioners who voted in favor of the rate hike will be off of the IURC by Sept. 8, which is the deadline for the agency to decide whether to reopen the case.
Zay alleged that Secretary of Energy and Natural Resources Suzanne Jaworowski communicated Braun’s position to Zay both before and after the June vote.
The lawsuit said that in a meeting following the AES vote, members of the Governor’s Office communicated to Zay that he had “let the governor down” and that “we told you not to do this.”
The lawsuit also alleges that Braun requested an advanced copy of the IURC’s affordability report.
“Commissioner Zay believed those requests violated the IURC’s obligation to act independently and impartially and declined to comply with requests he believed were inconsistent with his legal and ethical obligations,” the lawsuits said.
Zay said he sought guidance from the Office of the Inspector General in June regarding his concerns about prohibited communication from the Governor’s Office.
The lawsuit says Jaworowski then pushed Zay to resign. He declined. Jaworowski then told Zay that she had convinced the governor not fire him, the suit says.
But last week, Matthew Brown, director of the state’s personnel department, and Steve Carter, an attorney for the Governor’s Office, arrived at the IURC and asked to interview Zay. When he declined to be interviewed without an attorney, he was asked to resign or be fired, the lawsuit said.
Zay again refused to resign so, Brown and Carter handed him a letter saying he’d been fired.
The suit says that the state did not provide Zay with a notice stating why he was being fired or offer him an opportunity to defend himself.
“Indiana law does not permit the Governor to transform a statutory ‘for cause’ appointment into an at-will political appointment,” the lawsuit said.
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