Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Citizens Action Coalition of Indiana, Inc. v. Duke Energy Ind., Inc.

Court of Appeals of Indiana

August 21, 2014

CITIZENS ACTION COALITION OF INDIANA, INC., SAVE THE VALLEY, INC., SIERRA CLUB, AND VALLEY WATCH, INC., Appellants,
v.
DUKE ENERGY INDIANA, INC., INDIANA OFFICE OF UTILITY CONSUMER COUNSELOR, INDIANA UTILITY REGULATORY COMMISSION, Appellees

APPEAL FROM THE INDIANA UTILITY REGULATORY COMMISSION. James D. Atterholt, Chairman. Kari A.E. Bennett, Commissioner. Larry S. Landis, Commissioner. Carolene Mays, Commissioner. David E. Ziegner, Commissioner. Cause No. 43114-IGCC-10.

ATTORNEYS FOR APPELLANTS: J. DAVID AGNEW, Lorch Naville Ward, LLC, New Albany, Indiana; JENNIFER A. WASHBURN, Citizens Action Coalition of Indiana, INC., Indianapolis, Indiana.

ATTORNEYS FOR APPELLEES: JON LARAMORE, JANE DALL WILSON, Faegre Baker Daniels LLP, Indianapolis, Indiana; KELLEY A. KARN, ELIZABETH A. HERRIMAN, Duke Energy Business Services LLC, Plainfield, Indiana.

BAILEY, Judge. KIRSCH, J., and MAY, J., concur.

OPINION

Page 1031

BAILEY, Judge

Case Summary

Citizens Action Coalition of Indiana, Inc., Save the Valley, Inc., Sierra Club, Inc., and Valley Watch, Inc. (collectively, " Interveners" ) appeal an order of the Indiana Utility Regulatory Commission (" the Commission" ) approving a request from Duke Energy, Indiana, Inc. (" Duke" ) to include power plant construction costs incurred April 1, 2012 to September 30, 2012 in a rate adjustment rider (" ICGG-10" ), in implementation of a settlement agreement between Duke, the Indiana Office of Utility Consumer Counselor (" the OUCC" ), and other entities. We affirm.

Issues

Interveners present two issues for review: whether the ratemaking order is contrary to law because:

I. The Commission applied an incorrect statutory standard that placed an undue burden upon Interveners when the Commission approved the total of requested construction-related financing costs despite a two and one-half month delay in construction; or
II. The Commission disregarded relevant case law by approving capitalized financing costs that permitted a return on capital contributed from ratepayers attributable to deferred taxes.

Facts and Procedural History

On November 20, 2007, the Commission issued Certificates of Public Convenience and Necessity (" CPCN" ), approving the cost estimate of $1.985 billion to build an integrated coal gasification combined cycle

Page 1032

generating facility in Edwardsport, Indiana (" the IGCC Project" ). The construction and operating costs were recoverable from ratepayers. The relevant facts regarding the issuance of the CPCNs were summarized in Citizens Action Coalition v. PSI Energy, 894 N.E.2d 1055, 1059-60 (Ind.Ct.App. 2008), reh'g denied (" Duke I" ):

On September 7, 2006, Duke and Southern Indiana Gas and Electric Company, d/b/a Vectren Energy Delivery of Indiana, Inc. (" Vectren" ) filed a petition with the Commission seeking approval to build an integrated gasification combined cycle (" IGCC" ) electric power plant at Duke's Edwardsport facility in Knox County, Indiana. Duke operated a coal and oil-fired generating station at the Edwardsport facility that had a total of 160 megawatt capacity, was placed in service between 1944 and 1951, and was nearing the end of its useful economic life. The proposed IGCC facility would have a 630 megawatt capacity. An IGCC generating facility converts coal into synthesis gas, which is used to fuel highly efficient combustion turbines. The IGCC technology is a cleaner and more efficient way of producing electricity than conventional coal-fired plants.
Before constructing an electric generating facility in Indiana, public utilities must obtain a Certificate of Public Convenience and Necessity under Ind. Code § § 8-1-8.5. Additionally, under Ind. Code § § 8-1-8.7, a public utility may not use clean coal technology, such as IGCC, at a new or existing facility without obtaining a Certificate of Public Convenience and Necessity.
Duke's petition also sought, in part, to obtain certain financial incentives authorized under Ind. Code § § 8-1-8.8 for a clean coal and energy project,[1] such as " [t]he timely recovery of costs incurred during construction and operation" of the project. Ind. Code § 8-1-8.8-11(a)(1).
Pursuant to statute, the Indiana Office of Utility Consumer Counselor participated in the proceedings before the Commission. See Ind. Code § § 8-1-1.1. Additionally, the Indiana Industrial Group, Nucor Steel, the Citizens Action Coalition of Indiana, Inc., Save the Valley, Inc., Valley Watch, Inc., the Sierra Club, the Indiana Wildlife Federation, the Clean Air Task Force, and the Indiana Coal Council intervened in the action.
Extensive amounts of evidence were presented to the Commission, and an evidentiary hearing was held in June 2007. . . . On November 20, 2007, the Commission issued a sixty-three page

Page 1033

order granting Duke's petition for Certificates of Public Convenience and Necessity for the Edwardsport IGCC facility. The Commission also ordered that Duke was entitled to " timely recovery of its construction, operating and maintenance costs incurred in connection with the IGCC Project..." [Appellant's Appendix] at 82.

This Court affirmed the Commission's CPCN Order approving the cost estimate of $1.985 billion. Id. at 1070.

On June 3, 2008, the Commission issued an order providing that its review of the IGCC Project would be conducted first by the introduction and consideration of evidence presented in semi-annual IGCC Rider proceedings[2] and second, through independent engineering oversight of the IGCC Project. On January 7, 2009, the Commission issued an order in IURC Cause No. 43114IGCC-1 (" IGCC-1" ) approving an increase in the cost estimate from $1.985 billion to $2.35 billion.[3] On November 3, 2008, Duke filed a semi-annual IGCC Rider proceeding for cost recovery, IURC Cause No. 43114IGCC-2 (" IGCC-2" ). On May 13, 2009, the Commission approved the petition. On May 1, 2009, Duke filed its petition in IURC Cause No. 43114IGCC-3 (" IGCC-3" ); this was approved on December 2, 2009. On November 24, 2009, Duke filed a petition that included its semi-annual IGCC rider proceeding for cost recovery, IURC Cause No. 43114IGCC-4 (" IGCC-4" ), and, in a sub-docket proceeding, a request to review a revised cost estimate for the IGCC Project, IURC Cause No. 43114IGCC-4S1 (" IGCC-4S1" ).

On September 17, 2010, several intervening parties (not including the present Interveners)[4] submitted a settlement agreement to the Commission in IGCC-4S1. The settlement agreement set a hard cap of $2.975 billion on the construction costs of the IGCC Project. Subsequently, amidst an ethics scandal, the settlement agreement was withdrawn. The Commission conducted extensive evidentiary hearings; the settling parties filed a petition to reopen the record and submit a second settlement agreement; additional testimony was presented at a four-day settlement hearing. On December 27, 2012, the Commission approved the settlement with some modification (hereinafter, " the Modified Settlement Agreement" ).

The Modified Settlement Agreement set a $2.595 billion hard cap for construction costs to be included in rates over a thirty-year period. The total was inclusive of $2.319 billion of direct costs and approximately $276 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.