Citizens Action Coalition of Indiana, Inc. v. Northern Indiana Public Service Company NIPSCO Industrial Group and United States Steel Corporation
2017 Ind. App. LEXIS 172
Ind. Ct. App.2017Background
- NIPSCO filed for a rate change in Oct 2015 proposing large increases to the monthly fixed (customer) charge for residential and small commercial customers; multiple parties (OUCC, NIPSCO Industrial Group, U.S. Steel, CAC) intervened.
- NIPSCO, OUCC, and several other parties (but not CAC) negotiated and submitted a Settlement Agreement that increased the residential fixed charge from $11 to $14 and small commercial from $20 to $24 (a moderated increase from NIPSCO’s original proposal).
- CAC (Citizens Action Coalition) opposed the settlement, arguing the fixed-charge increase is unsupported by substantial evidence, discourages energy efficiency, and disproportionately harms low-income, elderly, and Black customers; CAC also sought a mandatory low-income assistance program and mandatory customer data collection/reporting.
- The IURC approved the Settlement Agreement in a detailed order finding the fixed-charge increase cost-based, consistent with gradualism, and supported by settlement testimony (including OUCC support); the IURC declined to require CAC’s low-income program or to order the specific data collection CAC requested.
- CAC appealed, arguing lack of substantial evidence for the fixed-charge increase, failure to address conservation and disparate-impact concerns, and error in declining to require a low-income assistance program and data collection.
- The Court of Appeals applied the substantial-evidence standard with deference to IURC settlements (especially with OUCC participation) and affirmed the IURC’s order in all respects.
Issues
| Issue | Plaintiff's Argument (CAC) | Defendant's Argument (NIPSCO/OUCC/IURC) | Held |
|---|---|---|---|
| Lawfulness/substantial evidence for fixed-charge increase | No substantial evidence that cost causation or cost shifts require higher fixed charges; other designs (volumetric increase) preferable | Evidence supports aligning fixed costs with fixed charges; settlement testimony, incremental/gradual approach, and OUCC support show reasonableness | Affirmed: substantial evidence supports the IURC approval of the settlement and fixed-charge increases |
| Effect on energy conservation/efficiency | Fixed-charge increase reduces marginal price signals and discourages conservation/efficiency | Commission considered the issue, found rate design advances cost-causation and gradualism; no statutory requirement that every component prioritize conservation | Affirmed: IURC not required to make discrete findings on conservation beyond its overall reasonableness determination |
| Disparate impact on low-income, elderly, and Black customers | Increase disproportionately harms low-volume users (overrepresented by low-income, elderly, African American customers); IURC failed to make specific findings | IURC may approve rates fair and reasonable for the customer base as a whole; no statutory mandate to address subgroup impacts separately | Affirmed: IURC’s finding that the rate design is reasonable for all ratepayers controls; subgroup impact does not require remand |
| Low-income assistance program and data collection | IURC should have required CAC’s low-income program and ordered NIPSCO to collect/report arrearage/disconnection metrics to inform future policy | NIPSCO withdrew its own proposed program after OUCC opposition; no other party supported CAC’s plan; IURC preferred stakeholder-driven efforts; statutory/administrative discretion and cost/privacy concerns | Affirmed: IURC permissibly declined to impose CAC’s program or order mandatory data collection; such measures better pursued legislatively or via stakeholder processes |
Key Cases Cited
- Ind. Gas Co. v. Ind. Fin. Auth., 999 N.E.2d 63 (Ind. 2013) (describing the IURC as primary factfinder with technical expertise in ratemaking)
- U.S. Gypsum, Inc. v. Ind. Gas Co., 735 N.E.2d 790 (Ind. 2000) (courts owe substantial deference to IURC settlements)
- N. Ind. Pub. Serv. Co. v. U.S. Steel Corp., 907 N.E.2d 1012 (Ind. 2009) (IURC orders stand unless unsupported by substantial evidence)
- Citizens Action Coalition of Ind., Inc. v. S. Ind. Gas & Elec. Co., 70 N.E.3d 429 (Ind. Ct. App. 2017) (presumption of validity for IURC orders; wide discretion)
- Boone Cty. Rural Elec. Membership Corp. v. Pub. Serv. Comm’n, 159 N.E.2d 121 (Ind. 1959) (courts will not substitute their judgment for commission rate determinations)
- Capital Improvement Bd. of Mgrs. v. Pub. Serv. Comm’n, 375 N.E.2d 616 (Ind. Ct. App. 1978) (findings must be specific enough to permit meaningful review)
- Citizens Action Coalition of Ind., Inc. v. N. Ind. Pub. Serv. Co., 796 N.E.2d 1264 (Ind. Ct. App. 2003) (rejecting heightened scrutiny of utility settlements when OUCC participates)