Indiana Office of Utility Consumer Counselor v. Southern Indiana Gas and Electric Company, d/b/a Vectren Energy Delivery of Indiana, Inc. (mem. dec.)

MEMORANDUM DECISION Jun 11 2015, 10:01 am Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE A. David Stippler Robert E. Heidorn Randall C. Helmen P. Jason Stephenson Lorraine Hitz-Bradley Joshua A. Claybourn Indianapolis, Indiana Vectren Corporation Evansville, Indiana

Mark J. Crandley Barnes and Thornburg, LLP Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA

Indiana Office of Utility June 11, 2015 Consumer Counselor, Court of Appeals Case No. 93A02-1409-EX-668 Appellant-Statutory Representative, Appeal from the Indiana Utility v. Regulatory Commission; The Honorable Loraine L. Seyfried, Administrative Law Judge; The Southern Indiana Gas and Honorable Carol A. Stephan, Electric Company, d/b/a Commission Chair; IURC Cause Nos.: 44429 and 44430 Vectren Energy Delivery of (Consolidated) Indiana, Inc., Appellee-Plaintiff.

May, Judge. Court of Appeals of Indiana | Memorandum Decision 93A02-1409-EX-668 | June 11, 2015 Page 1 of 4 [1] The Indiana Office of Utility Consumer Counselor (“OUCC”) appeals a

determination by the Indiana Utility Regulatory Commission that Vectren

Energy Delivery of Indiana, a gas utility, is not obliged to reduce its rate

recovery for certain infrastructure improvements based on the value of assets it

retires from service. [2] We affirm.

Facts and Procedural History [3] In 2013 Vectren petitioned the Commission to recover costs for improvements

to its system. Specifically, it petitioned to recover for system upgrades required

by federal mandates and for costs of projects that improve or replace features of

its gas transmission and distribution system. The Commission entered an order

authorizing the cost recovery. The order had the effect of permitting Vectren to

charge its ratepayers for both a new plant and a plant that was replaced and

would no longer be used to serve customers.

Discussion and Decision [4] The OUCC argues on appeal Vectren should not have been permitted to

recover costs for retiring an asset unless it also reduced the return attributable to

the retired asset in its existing rate base. We recently resolved this question in

Vectren’s favor in NIPSCO Indus. Grp. v. N. Indiana Pub. Serv. Co., No. 93A02-

1403-EX-158 (Ind. Ct. App. Apr. 8, 2015). There, as in the case before us, the

Commission rejected the OUCC’s argument that a utility company should be

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required to reduce its return and depreciation so that it was not recovering on

both replaced assets and the new replacement assets. [5] We affirmed the Commission’s decision to allow NIPSCO to recover for

certain projects without subtracting for returns or depreciation already being

recovered for the assets being replaced: “Although we have significant

concerns over the allegedly inconsistent treatment of this subject by the

Commission, in light of the deference owed to the Commission, we cannot say

that its methodology is erroneous given the lack of specificity in the statutes

regarding this calculation.” Id. at *10. [6] The OUCC concedes the issue before us is “the identical issue” addressed in

NIPSCO. (Br. of Appellant Indiana Office of Utility Consumer Counselor at 11

n.4.). We decline to revisit the NIPSCO analysis and accordingly affirm the

Commission’s order. 1

1 In this appeal, intervenor Vectren Industrial Group (VIG) submitted the NIPSCO decision in a Notice of Additional Authority. It notes that in NIPSCO, we addressed the additional question “whether the Commission erred by allowing NIPSCO to specifically identify the proposed projects for only the first year of the seven-year plan and by establishing a presumption that the proposed projects for years two through seven of the plan were eligible for special ratemaking treatment.” NIPSCO, No. 93A02-1403-EX-158, at *1. VIG invites us to “give due consideration to this new judicial interpretation,” (Vectren Industrial Group’s Notice of Additional Authority at 2), of the statute at issue in this appeal. Vectren moved to strike the Notice of Additional Authority. As no party raised that issue before the Commission in the Vectren proceedings, it is waived on appeal. See, e.g., Spring Hills Developers, Inc. v. Reynolds Grp., Inc., 792 N.E.2d 955, 959 (Ind. Ct. App. 2003) (allegation of error waived on appeal when party “did not make that argument or tender additional evidence to the IURC.”). We accordingly decline to address that issue, and in an Order issued today, we grant Vectren’s Motion to Strike.

Court of Appeals of Indiana | Memorandum Decision 93A02-1409-EX-668 | June 11, 2015 Page 3 of 4 [7] Affirmed.

Robb, J., and Mathias, J., concur.

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