Nipsco Indus. Grp. v. N. Ind. Pub. Serv. Co.
100 N.E.3d 234
Ind.2018Background
- Indiana enacted the TDSIC statute (I.C. ch. 8-1-39) in 2013 to allow utilities to obtain preapproval of certain transmission, distribution, and storage capital improvements via a seven-year plan and then recover 80% of approved expenditures through periodic Section 9 tracker petitions.
- NIPSCO filed Section 10 seven‑year plans (electric and gas). Its plans specified Year‑1 projects but described later years using broad "project categories" (aka multiple‑unit projects) and ascertainable planning criteria tied to inspections and historical failure rates.
- The Commission approved NIPSCO’s Gas Plan and later allowed Section 9 updates that identified particular assets within prior categories; TDSIC‑4 sought ~ $20 million more under the "Inspect & Mitigate" category.
- The NIPSCO Industrial Group challenged the Commission’s approval, arguing the statute requires specific project designation in the initial Section 10 plan, not later identification within generic categories.
- The Court of Appeals was divided but affirmed the Commission; the Indiana Supreme Court granted transfer to resolve whether the TDSIC Statute permits approval of project categories described by ascertainable criteria or requires specific project designation upfront.
Issues
| Issue | Plaintiff's Argument (Industrial Group) | Defendant's Argument (NIPSCO / Commission) | Held |
|---|---|---|---|
| Whether the TDSIC statute permits approving broad "project categories" or "multiple‑unit projects" described by ascertainable planning criteria, with specific units identified later in Section 9 updates | TDSIC requires designation of specific projects in the Section 10 seven‑year plan; categories that leave actual project identification to later updates are not "designated" and violate the statute | Reasonable to approve categories because utilities cannot know, before inspections, which specific units will fail; statute allows use of ascertainable selection criteria in the plan with later unit identification | Court held statute requires specific project designation in the Section 10 plan; multiple‑unit project categories described by criteria are not eligible for TDSIC treatment absent specific designation |
| Whether the Industrial Group is precluded from challenging the Commission's method because it did not appeal the earlier TDSIC‑3 order that first approved categories | The Industrial Group argued TDSIC‑4 improperly sought reimbursement for projects not designated in the Section 10 plan; it preserved challenge to later reimbursements | NIPSCO argued claim/issue preclusion barred relitigation because the Commission previously approved the categories in TDSIC‑3 and Industrial Group did not appeal | Court rejected preclusion; held legal issue is of first impression and not foreclosed by prior unchallenged administrative orders |
Key Cases Cited
- United States Gypsum, Inc. v. Ind. Gas Co., 735 N.E.2d 790 (Ind. 2000) (explaining regulatory compact and comprehensive ratemaking)
- N. Ind. Pub. Serv. Co. v. United States Steel Corp., 907 N.E.2d 1012 (Ind. 2009) (describing Commission's technical expertise and judicial review confines)
- Ind. Bell Tel. Co. v. Ind. Util. Regulatory Comm'n, 715 N.E.2d 351 (Ind. 1999) (standard of review for legal questions involving the Commission)
- NIPSCO Indus. Grp. v. N. Ind. Pub. Serv. Co., 78 N.E.3d 730 (Ind. Ct. App. 2017) (Court of Appeals decision with dissent on adequacy of plan specificity)
- Pub. Serv. Comm'n of Ind. v. Ind. Bell Tel. Co., 130 N.E.2d 467 (Ind. 1955) (framing proper rates and fair return principles)