On December 28, 2021, the Indiana Utility Regulatory Commission (“Commission”) approved a Transmission, Distribution and Storage System Improvement Charge (“TDSIC”) plan submitted by Northern Indiana Public Service Company (“NIPSCO”). Part of NIPSCO’s TDSIC plan included certain system deliverability projects, specifically NIPCO’s need to upgrade its Marktown substation and improve the distribution and transmission related system deliverability in the Nappanee area. The NIPSCO Industrial Group and the Office of the Utility Consumer Counselor (collectively “Appellants”) appealed the Commission’s approval of the TDSIC plan, arguing that the Commission misinterpreted the statute governing TDSIC plans – I.C. 8-1-39 – because it did not conduct a cost-benefit analysis for each individual project in the TDSIC plan.
The Indiana Court of Appeals disagreed with Appellants’ interpretation that I.C. 8-1-39 required the Commission to conduct a cost-benefit analysis on an individual project basis. In its September 29, 2022, opinion, the Court focused on the statutory language of I.C. 8-1-39-10, finding that subsection 10(1) required the Commission to include a best estimate of cost “of the eligible improvements included in the plan” rather than a best estimate of cost for each individual improvement. Second, the Court noted that subsection 10(3), requiring the Commission to determine “whether the estimated costs of the eligible improvements included in the plan are justified by incremental benefits attributable to the plan,” is satisfied when the eligible improvements collectively are justified by the proffered benefits as applied to TDSIC plan in its entirety as opposed to individually, noting that “[h]ad the General Assembly wished to require more detailed findings, it could have easily required them but did not do so.” In a similar vein, the Court concluded that Appellants’ policy arguments regarding the purposes of subsection 10(3) were “best addressed to the General Assembly, not this court.”
Jeremy Fetty is a partner in the law firm of Parr Richey Frandsen Patterson Kruse with offices in Lebanon and Indianapolis. He often advises businesses and utilities (for profit, non-profit and cooperative) on organizational, human resources, and transactional matters and drafts and reviews commercial contracts.
The statements contained herein are matters of opinion and general information only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.