In Dep’t of Waterworks v. Community School Corp. of Southern Hancock County, the Indiana Court of Appeals recently affirmed the trial court’s holding that a school may connect a new facility to an existing water main through the use of a service pipe instead of using a water main extension. Dep’t of Waterworks for Consol. City of Indianapolis v. Cmty. Sch. Corp. of S. Hancock County, 933 N.E.2d 880 (Ind. Ct. App. 2010). The Court of Appeals relied on the Indiana Utility Regulatory Commission’s (IURC) determination that the “the [Water Company’s departmental] rules do not preclude the School from connecting a service pipe to its new facility from an existing main.”
The Indianapolis Department of Waterworks unsuccessfully argued that the IURC’s decision was contrary to law because the School’s new facility “does not abut an existing main as required…by the rules.” The Department of Waterworks also argued against the IURC’s factual determinations concerning the economical decision by the school. According to the estimates for the project, it would have cost the School approximately $412,000 if a new main was constructed. In contract, connection of a service pipe to an existing water main would only cost the School approximately $168,000.
The IURC “interpreted the rules such that the new School building itself was not required to abut the existing main.” The Court recognized the IURC’s special insight into interpreting rules it approved, and found IURC’s decision to be reasonable. The Court acknowledged that the School already had two of its buildings connected to the existing main and stated “the rules do not permit the Water Company to extend its service system by forcing the School to pay for a main that it did not request when the property is already served by an adequate water main that abuts its property.”
The Court also highlighted the fact that since the School made its own determination to construct a service pipe to the existing water main, “the Water Company is absolved of all responsibility for the installation, maintenance and ownership of the service pipe on the customer’s property.” The Court further found that the IURC was not required to make findings regarding reasonableness or economics of the school’s decision.
Jeremy L. Fetty is an associate at Parr Richey whose practice focuses on corporate law, utility law, municipal law, and labor and employment law. The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.