Another round of TDSIC arguments at Supreme Court
Last week, the Indiana Supreme Court heard arguments in an appeal of a Commission order1 authorizing Duke Energy Indiana’s latest TDSIC plan, leveling new challenges to the Commission's interpretation of the TDSIC statute. This marks at least the second or third occasion where such challenges have been presented before the Court. As in past challenges, the outcome of this appeal is likely to have profound implications for utility companies and their customers.
Representing the OUCC, Duke Industrial Group, and the Citizens Action Coalition, Todd Richardson of Lewis Kappes contented that the Commission, in approving the TDSIC plan, failed to satisfy Ind. Code 8-1-39-10(b)(3) which requires the Commission determine “whether the estimated costs of the eligible improvements included in the plan are justified by incremental benefits attributable to the plan.” Central to his argument, not all component projects included in the plan have a positive cost-benefit ratio and thus do not provide “incremental benefits.” Moreover, Richardson posits that it is not enough that the plan as a whole provides economic benefits, each eligible project must be individually justified using this standard. The appellants are opposing projects totaling $250 million within the approximately $2.14 billion TDSIC plan approved by the Commission.
Arguing on behalf of Duke Energy Indiana and the Utility Regulatory Commission, Peter Rusthoven of Barnes & Thornburg stated that Mr. Richardson and appellants are proposing a statutory interpretation that is not supported by a plain reading of the actual language contained in the code. Rusthoven submits that the statute does not require that each eligible project must be justified by incremental economic benefits, but rather the plan as a whole must contribute to an outcome that is “better than it would be without the plan.” Further, he argues that appellants have targeted improvements which do not benefit them directly as economically unjustified while they have not objected to “upgrades to them.”
The Justices, through their questions, sought to understand where a balance may be struck. At one point Justice Slaughter stated that “one gets the impression that the theme is, the concern is that the TDSIC process is becoming the tail that wags the dog.” Earlier in the proceedings, Chief Justice Rush asked whether a plan would be reasonable if 49% of included projects were economically unjustified. Mr. Rusthoven’s response being that these are policy arguments best decided by the legislature.
On rebuttal, Mr. Richardson argued that the “purpose of the statute is to encourage infrastructure investment, but the sky is not the limit. Section 10(b)(3) is the essential protection for the ratepayer.” The court will take the matter under advisement and issue an opinion in due course.
View a recording of the oral arguments here.
1 As a Commissioner at the Indiana Utility Regulatory Commission, I was a presiding officer and, thus, directly involved in the deliberation and decision-making process of the case under appeal. Consequently, I am listed as a named appellee in the official court documents related to this matter.