Citizens Action Coalition of Indiana, Inc., Sierra Club, Inc., and Valley Watch, Inc. v. Southern Indiana Gas and Electric Co. d/b/a Vectren Energy Delivery of Indiana, Inc., Ind. Utility Regulatory

CourtIndiana Court of Appeals
DecidedOctober 29, 2015
Docket93A02-1502-EX-110
StatusPublished

This text of Citizens Action Coalition of Indiana, Inc., Sierra Club, Inc., and Valley Watch, Inc. v. Southern Indiana Gas and Electric Co. d/b/a Vectren Energy Delivery of Indiana, Inc., Ind. Utility Regulatory (Citizens Action Coalition of Indiana, Inc., Sierra Club, Inc., and Valley Watch, Inc. v. Southern Indiana Gas and Electric Co. d/b/a Vectren Energy Delivery of Indiana, Inc., Ind. Utility Regulatory) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Citizens Action Coalition of Indiana, Inc., Sierra Club, Inc., and Valley Watch, Inc. v. Southern Indiana Gas and Electric Co. d/b/a Vectren Energy Delivery of Indiana, Inc., Ind. Utility Regulatory, (Ind. Ct. App. 2015).

Opinion

Oct 29 2015, 8:31 am

ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEE Thomas Cmar VECTREN ENERGY Earthjustice Robert E. Heidorn Oak Park, Illinois P. Jason Stephenson Matthew Gerhart Vectren Corporation Earthjustice Evansville, Indiana Seattle, Washington Wayne C. Turner Jennifer A. Washburn Patrick A. Ziepolt Citizens Action Coalition of Indiana Hoover Hull Turner LLP Indianapolis, Indiana Indianapolis, Indiana ATTORNEYS FOR APPELLEE INDIANA UTILITY REGULATORY COMMISSION Gregory Zoeller Attorney General of Indiana David Lee Steiner Deputy Attorney General Indianapolis, Indiana

Beth Krogel Roads General Counsel Jeremy R. Comeau Assistant General Counsel Indiana Utility Regulatory Commission Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA

Court of Appeals of Indiana | Opinion 93A02-1502-EX-110 |October 29, 2015 Page 1 of 34 Citizens Action Coalition of October 29, 2015 Indiana, Inc., Sierra Club, Inc., Court of Appeals Case No. and Valley Watch, Inc., 93A02-1502-EX-110 Appellants-Intervenors, Appeal from the Indiana Utility Regulatory Commission v. The Honorable Angela Weber, David E. Ziegner, and James Southern Indiana Gas and Huston, Commissioners Electric Co. d/b/a Vectren The Honorable Jeffery A. Earl, Energy Delivery of Indiana, Inc., Administrative Law Judge Administrative Cause No. 44446 Appellee-Petitioner,

Indiana Utility Regulatory Commission, Appellee.

Bradford, Judge.

Case Summary [1] On January 17, 2014, Appellee-Petitioner Southern Indiana Gas and Electric

Company d/b/a Vectren Energy Delivery of Indiana (“Vectren”), a public

utility company which provides electricity to southern Indiana residents, filed a

petition with Appellee the Indiana Utility Regulatory Commission (“the

Commission” or “IURC”) for approval of projects to modify their current coal-

powered generating stations so as to meet new EPA standards. The petition

also requested financial incentives and reimbursement from ratepayers for costs

associated with the projects. Appellants-Intervenors Citizens Action Coalition

of Indiana, Inc., (“CAC”) Sierra Club, Inc., and Valley Watch, Inc.

Court of Appeals of Indiana | Opinion 93A02-1502-EX-110 |October 29, 2015 Page 2 of 34 (collectively “Appellants”) intervened in the action and, in addition to the

Indiana Office of Utility Consumer Counselor1 (“OUCC”), opposed Vectren’s

petition. Appellants argued that retiring some or all of Vectren’s current coal-

powered generators and replacing them with new natural gas-powered

generators was a more cost-effective plan than Vectren’s proposal to install

emission controls on its current generators. Ultimately, the OUCC ceased its

opposition to Vectren’s proposal prior to the Commission’s decision.

[2] The Commission found that Vectren’s proposal was reasonable and necessary,

approved the proposal, and granted Vectren’s request for reimbursement of

project costs. On appeal, Appellants argue that the Commission failed to make

necessary findings on (1) facts material to its determination of the issues and (2)

statutory factors required to be addressed prior to authorizing the use of clean

coal technology. In response, Vectren claims that Appellants’ appeal is moot

and that the Commission made all necessary findings. We find that the

Commission erred in failing to make findings on the factors listed in Indiana

Code section 8-1-8.7-3 and, accordingly, we remand with instructions.

Facts and Procedural History

1 The OUCC is the state agency representing ratepayer interests in cases before state and federal utility regulatory commissions. Indiana Office of Utility Consumer Counselor, www.in.gov/oucc/ (last visited October 10, 2015).

Court of Appeals of Indiana | Opinion 93A02-1502-EX-110 |October 29, 2015 Page 3 of 34 i. EPA Action

[3] Vectren is a public utility company which provides electricity to southern

Indiana residents. Vectren’s baseload electricity generating units include Brown

unit 1, Brown unit 2, Culley unit 2, Culley unit 3, and Warrick, all of which are

coal-powered generators. In 2012, Vectren received a Notice of Violation

(“NOV”) issued by the EPA alleging that Vectren’s emissions control

technology at its Brown units was noncompliant with EPA rules governing

sulfuric acid emissions. The EPA also served Vectren with a Clean Air Act

(“CAA”) Information Request that highlighted concerns with the sulfur

emissions at Culley unit 3. Vectren disputed the allegations raised in the NOV.

At some point after Vectren’s filing of the instant petition and prior to the

Commission’s ultimate decision, Vectren and the EPA reached a settlement in

principle to resolve the outstanding allegations raised in the NOV and the

information request. Vectren is also subject to additional recent federal

mandates regarding emissions standards, specifically, the Mercury and Air

Toxics Standards rule (“MATS”) and the Water Pollution Control Act which

limit mercury emissions in the air and water, respectively.

ii. Vectren’s Petition

[4] On January 17, 2014, Vectren filed a petition with the Commission for approval

of modifications to four of its coal-powered electricity generating facilities––

Brown units 1 and 2, Culley unit 3, and Warrick––in order to comply with the

MATS rule, the NOV, and the CAA information request.

Court of Appeals of Indiana | Opinion 93A02-1502-EX-110 |October 29, 2015 Page 4 of 34 3. Relief requested. Vectren requests approval of clean energy projects and issuance of a CPCN [certificate of public convenience and necessity] to construct, install, and use CCT [clean coal technology] to allow Vectren to comply with the United State Environmental Protection Agency (“EPA”) Mercury and Air Toxics Standards (“MATS”) rule, the Notice of Violation (“NOV”) received for Brown, and a Clean Air Act (“CAA”) §114 Information Request received for Culley related to a 2003 federal consent decree.

Specifically, Vectren requests approval to construct, install, and operate the following projects on the Brown Units: an organo- sulfide injection system to inject an organo-sulfide solution into each scrubber at Brown units 1 and 2 to address mercury (“Hg”) re-emission…; a soda ash injection system for sulfur trioxide (“SO3”) mitigation at Brown units 1 and 2; and a hydrogen bromide injection system on Brown unit 2 to aid the conversion of elementary mercury to oxidized form (collectively, the “Brown Air Projects”).

Vectren requests approval to construct, install and operate the following projects on the Culley Units: an organo-sulfide injection system…at the combined scrubber at Culley units 2 and 3 to address Hg re-emission…; and a hydrated lime injection system for SO3 mitigation at Culley unit 3 (collectively, the “Culley Air Projects”)….

Vectren requests approval for recovery of its portion of the costs for Alcoa[2] to install an organo-sulfide system at Warrick unit 4 (“Warrick Project”).

In addition, Vectren requests approval to construct, install, and operate equipment necessary to control wastewater discharges from the plants at both Brown and Culley as required to comply

2 Vectren owns 50% of Warrick unit 4 along with Alcoa Inc., which owns the other 50%.

Court of Appeals of Indiana | Opinion 93A02-1502-EX-110 |October 29, 2015 Page 5 of 34 with National Pollution Discharge Elimination System (“NPDES”) Hg limitations. [“Brown Water Project” and “Culley Water Project”]…. In this Order, we refer to the Brown and Culley Air Projects, the Warrick Project, and the Brown and Culley Water Projects, collectively, as the “Mandated Projects”.[3]

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Citizens Action Coalition of Indiana, Inc., Sierra Club, Inc., and Valley Watch, Inc. v. Southern Indiana Gas and Electric Co. d/b/a Vectren Energy Delivery of Indiana, Inc., Ind. Utility Regulatory, Counsel Stack Legal Research, https://law.counselstack.com/opinion/citizens-action-coalition-of-indiana-inc-sierra-club-inc-and-valley-indctapp-2015.