NIPSCO Industrial Group v. Northern Indiana Public Service Company

FILED
Jun 20 2017, 8:31 am

CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Todd A. Richardson Brian J. Paul
Jennifer W. Terry Daniel E. Pulliam
Joseph P. Rompala Faegre Baker Daniels LLP
Lewis Kappes, P.C. Indianapolis, Indiana
Indianapolis, Indiana Claudia J. Earls
Christopher C. Earle
NiSource Corporate Services-Legal
Indianapolis, Indiana

IN THE
COURT OF APPEALS OF INDIANA

NIPSCO Industrial Group, June 20, 2017
Appellant-Intervenor, Court of Appeals Case No.
93A02-1607-EX-1644
v. Appeal from the
Indiana Utility Regulatory
Northern Indiana Public Service Commission
Company, The Honorable
Lorraine L. Seyfried,
Appellee-Petitioner.
Chief Administrative Law Judge
The Honorable Carol A. Stephan,
Chair
The Honorable James F. Huston,
Commissioner
The Honorable David E. Ziegner,
Commissioner
Cause No.
44403-TDSIC-4

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 Kirsch, Judge.

[1] NIPSCO Industrial Group (“Industrial Group”) appeals the decision of the

Indiana Utility Regulatory Commission (“the Commission”) that approved

Northern Indiana Public Service Company’s (“NIPSCO”) petition for a plan

update, pursuant to Indiana Code section 8-1-39-9, to its previously

Commission-approved 7-year plan. Industrial Group raises two issues, which

we consolidate and restate as: whether the Commission erred in approving

NIPSCO’s petition for a plan update, finding certain categories of

improvements as eligible to be treated as transmission, distribution, and storage

system improvement charges (“TDSIC”) because the Industrial Group claims

that the projects within the categories were not identified with enough

specificity.

[2] We affirm.

Facts and Procedural History
[3] NIPSCO is a public electric and gas utility that services customers in northern

Indiana and owns, operates, manages, and controls plants and equipment in

Indiana used for the generation, transmission, distribution, and furnishing of

gas utility service to the public. NIPSCO provides gas utility service to more

than 821,000 residential, commercial, and industrial customers in northern

Indiana. Industrial Group is a group comprised of some of NIPSCO’s largest

industrial customers.

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[4] The rates a utility charges to its customers are traditionally adjusted through

periodic rate cases, which are expensive, time consuming, and comprehensive.

Another way to set rates is through tracker proceedings, which allow smaller

increases for specific projects and costs between general rate case proceedings.

The General Assembly has authorized several trackers, including a fuel charge

tracker, a tracker for qualified pollution control projects under construction, a

tracker for federally mandated costs, and a tracker for clean energy projects. In

2013, the General Assembly enacted Indiana Code chapter 8-1-39, which

allows a utility to petition for a tracker for certain proposed new or replacement

electric or gas transmission, distribution, or storage projects. The statute is

referred to as the “TDSIC” statute.

[5] Under the TDSIC statute, the utility seeks approval of a 7-year plan, pursuant

to Indiana Code section 8-1-39-10 (“Section 10”), that designates improvements

to transmission, distribution, and storage systems. If the Commission

determines that the 7-year plan is reasonable, reflects the best estimate of the

costs of the improvements, demonstrates that the improvements are required for

public convenience and necessity, and shows that the eligible improvements are

cost-justified, then the Commission approves the plan and designates the

improvements as eligible for TDSIC treatment. Ind. Code § 8-1-39-10(b). After

the 7-year plan is approved, periodic tracker proceedings may occur, pursuant

to Indiana Code section 8-1-39-9 (“Section 9”), to allow rate adjustments for

specific projects as they are completed. These petitions should include an

update of the 7-year plan, and any costs that exceed the approved expenditures

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 and TDSIC costs require “specific justification by the public utility and specific

approval by the [C]ommission before being authorized for recovery in customer

rates.” Ind. Code § 8-1-39-9(f).

[6] On October 3, 2013, NIPSCO filed a petition under Section 10 seeking

approval of its 7-year plan for its gas system, which included improvement

projects to transmission, distribution, and storage systems. By order, the

Commission approved the 7-year plan and found that NIPSCO’s cost estimates

for the 7-year plan were reasonable. Industrial Group appealed the

Commission’s order approving the 7-year plan, but on Industrial Group’s own

motion, the appeal was dismissed with prejudice on September 23, 2014.

[7] On August 28, 2014, NIPSCO filed its first tracker petition for its gas system,

which sought approval of updates to the 7-year plan, including actual and

proposed capital expenditures and TDSIC costs that exceeded the amounts

approved in the original 7-year plan. NIPSCO’s petition projected the

estimated capital costs for the 7-year plan to be $862.2 million, which was an

increase of $149.1 million over the original plan. This tracker petition was

approved by the Commission, including NIPSCO’s proposed methodology for

calculating the TDSIC adjustment.

[8] NIPSCO filed its second tracker petition (“TDSIC-2”) on February 27, 2015.

Before the Commission issued an order on TDSIC-2, a panel of this court

issued a decision in the appeal of NIPSCO’s electric TDSIC case 7-year plan

(“the Electric Decision”), in which the Commission’s order was reversed in

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 part, affirmed in part, and remanded to the Commission. See NIPSCO Indus.

Grp. v. N. Ind. Pub. Serv. Co., 31 N.E.3d 1 (Ind. Ct. App. 2015). This court held

that NIPSCO’s 7-year plan for its electric TDSIC lacked sufficient detail for the

Commission to determine whether “NIPSCO’s plan for years two through

seven was ‘reasonable’ or to determine a ‘best estimate of the cost’ of the

improvements.” Id. at 8. The court also found that it was impermissible for the

Commission to establish a “‘presumption of eligibility’ regarding the undefined

projects for years two through seven” because such a presumption

“inappropriately shifts the burden of showing a project’s eligibility for TDSIC

treatment from NIPSCO.” Id. at 9. After the Electric Decision was issued,

because it impacted the TDSIC filings in its gas systems, NIPSCO moved to

dismiss its TDSIC-2 petition in its gas system with the understanding that it

would request to recover the expenditures and costs covered in TDSIC-2

through its third tracker petition (“TDSIC-3”), and the trial court dismissed

TDSIC-2 without prejudice.

[9] On August 31, 2015, NIPSCO filed its TDSIC-3, which again sought approval

of its updated 7-year plan and included actual and proposed estimated capital

expenditures and TDSIC costs that exceeded those amounts approved in

TDSIC-1. In TDSIC-3, NIPSCO sought to provide more specificity with

respect to the projects contained in the project groups in response to the Electric

Decision. In its TDSIC-3 order approving the petition, the Commission found

that, based on the Electric Decision in Nipsco Industrial Group, approval of a 7-

year plan requires a finding that the proposed projects in the plan contain

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 enough detail for the Commission to determine that the projects meet the

definition of eligible improvements. Appellant’s App. at 159. The Commission

also recognized that TDSIC-3 presented a “unique situation” because although

the Commission had previously approved NIPSCO’s 7-year plan, the Electric

Decision showed that such approval was not proper under the statute. Id.

Thus, the Commission found that, while it was making a determination under

Section 9, it was required to confirm that NIPSCO had shown sufficient

information in its petition to find the projects contained in TDSIC-3 to be

eligible improvements. Id.

[10] In its order, the Commission also interpreted the statutory term “update” to

require NIPSCO to explain and justify changes to the cost estimates for eligible

improvements that the Commission had previously approved. Id. at 160. The

Commission found that, in light of the Electric Decision, it had to reevaluate its

presumption that projects proposed for years three through seven of the 7-year

plan could be presumed eligible, and it determined that NIPSCO had presented

sufficient detail regarding project descriptions and cost estimates for those years

concerning a majority of the projects and projects groups. Id. at 163. In

TDSIC-3, NIPSCO sought to provide more specificity with respect to the

projects contained in the project groups in response to the Electric Decision. In

the TDSIC-3 order, the Commission found that NIPSCO had provided

ascertainable planning criteria for identifying and selecting specific

improvements that NIPSCO will undertake in the project groups. Id. at 164.

The Commission also determined that NIPSCO had provided sufficient detail

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 and explanation for the changes in estimated cost of the eligible improvements

included in the updated 7-year plan, had sufficiently demonstrated that public

convenience and necessity required or would require the eligible improvements,

and had shown that the incremental benefits of the plan justified the costs. Id.

at 170-72. The TDSIC-3 order approved the use of “project groups,” which

included some “identified” projects and other “yet to be identified” projects and

found that NIPSCO “provided ascertainable planning criteria for identifying

and selecting the specific improvements that it will undertake in these project

groups.” Id. at 163-64. Industrial Group did not appeal the TDSIC-3 order.

[11] NIPSCO filed its fourth tracker petition (“TDSIC-4”) on February 29, 2016,

which was before the Commission issued its order on the TDSIC-3 petition. In

the TDSIC-4 petition, NIPSCO sought approval of an updated 7-year plan,

which again included actual and proposed estimated capital expenditures and

TDSIC costs that exceeded the amounts included in the TDSIC-3 petition. The

TDSIC-4 petition provided greater detail than the previous petitions, including

project estimates, summary of unit cost estimates, multiple unit project lists and

supporting documentation, and project change requests. Id. at 8.

[12] The updated plan included changes made to projects slated for 2015 and 2016

and updated actual costs associated with projects across the entire plan.

Specifically, the updated 7-year plan included different types of projects in

various categories with both single unit and multiple unit projects. The

multiple unit projects were described generally as a category of smaller projects

that NIPSCO cannot anticipate exactly. Tr. at 25. As an example, NIPSCO

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 has thousands of pipes that are annually inspected, and when leaks are

discovered, they may need unexpected replacement. Id. Although it is not

known which exact projects will need replacement, based on history, it is

known that a certain percentage of the projects will fail each year. Id. The

multiple unit projects were listed in three ways: (1) a specified asset list, which

included the specific assets to be addressed each year; (2) a list of inspection and

remediation projects; and (3) other projects that were prioritized through

alternative means. Appellant’s App. at 17. An asset register was included as an

appendix, which listed all projects that were subject to inspection and could be

addressed in the next few years. Tr. at 48. The list of inspection and

remediation projects were prioritized based on United States Department of

Transportation (“DOT”)-mandated annual inspections. Appellant’s App. at 17.

Based on the results of an inspection, NIPSCO would schedule actions to

mitigate risk, which could include replacement. Id. TDSIC-4 contained greater

detail than TDSIC-3 in its description of the project groups and was consistent

with, and more detailed than, the ascertainable planning criteria that had been

previously approved by the Commission in TDSIC-3. Non-Confidential Ex. Vol.

II at 89-90.

[13] The Commission issued an order approving the TDSIC-4 petition on June 22,

2016. In the TDSIC-4 order, the Commission reasoned that, because the

TDSIC statute does not discuss what may be included in a Section 9 update and

what review was required, it would follow its findings in TDSIC-3 that Section

9 updates “should include a discussion of any changes in an eligible

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 improvement’s best estimate of cost, necessity, and associated incremental

benefits upon which the Commission based its determination to approve [the]

proposed Plan as reasonable.” Appellant’s App. at 31. The Commission

acknowledged that the updated plan reclassified and identified additional

projects that fit into the project groups that had been approved in TDSIC-3 as

having sufficiently ascertainable planning criteria. Id. at 33. The Commission

determined that NIPSCO’s project groups and multiple unit project categories

were supported by sufficient ascertainable planning criteria for identifying and

selecting the specific improvements to be undertaken and the reclassification

and further identification of projects or asset replacements within the project

groups was reasonable and consistent with the TDSIC-3 order. Id. at 33-34. In

the TDSIC-4 order, the Commission approved the updated 7-year plan and the

cost increases contained in the petition. Industrial Group now appeals.

Discussion and Decision
[14] Industrial Group argues that the Commission erred in approving NIPSCO’s

TDSIC-4 petition. Industrial Group contends that the Commission erroneously

approved the multiple unit categories in NIPSCO’s updated 7-year plan because

the improvements were not identified with particularity and because NIPSCO

sought to identify specific projects year by year through tracker updates

pursuant to Section 9 instead of identifying the projects in the 7-year plan.

Industrial Group also claims that the Commission incorrectly granted a

designation of eligibility to the multiple unit project categories, even though the

specific improvements in these categories would not be identified until later

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 filings under Section 9. Industrial Group further asserts that the Commission’s

order, which approved a $20 million increase in costs, erroneously allowed

NIPSCO to expand the scope of its 7-year plan to add projects that were not

identified in the original 7-year plan filed pursuant to Section 10.

[15] The Commission was created by the General Assembly primarily as a fact-

finding body with the technical expertise to administer the regulatory scheme

devised by the legislature. N. Ind. Pub. Serv. Co. v. U.S. Steel Corp., 907 N.E.2d

1012, 1015 (Ind. 2009); Ind. Code § 8-1-1-5. The Commission’s assignment is

to ensure that public utilities provide constant, reliable, and efficient service to

the citizens of Indiana. Nipsco Indus. Grp., 31 N.E.3d at 5. The Commission

only can exercise power conferred upon it by statute. Id. “Its authority also

‘includes implicit powers necessary to effectuate the statutory regulatory

scheme.’” Id. (quoting United States Gypsum, Inc. v. Ind. Gas Co., 735 N.E.2d

790, 795 (Ind. 2000)). Any doubts regarding the Commission’s statutory

authority must be resolved against the existence of such authority. U.S. Steel

Corp. v. N. Ind. Pub. Serv. Co., 951 N.E.2d 542, 550 (Ind. Ct. App. 2011), trans.

denied.

[16] An order of the Commission is subject to appellate review to determine whether

it is supported by specific findings of fact and by sufficient evidence, as well as

to determine whether the order is contrary to law. Nipsco Indus. Grp., 31 N.E.3d

at 5. On matters within its jurisdiction, the Commission enjoys wide discretion.

Id. at 5-6. The Commission’s findings and decision will not be overridden just

because this court might reach a contrary opinion on the same evidence. Id. at

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 6. On appeal, we first review the entire record to determine whether there is

substantial evidence to support the Commission’s findings of basic fact. U.S.

Steel Corp., 951 N.E.2d at 551. Next, we review ultimate facts, or mixed

questions of fact and law, for their reasonableness with the amount of deference

owed depending on whether the issue falls or does not fall within the

Commission’s expertise. Id. Finally, legal propositions are reviewed for their

correctness. Id. More precisely, “an agency action is always subject to review

as contrary to law, but this constitutionally preserved review is limited to

whether the Commission stayed within its jurisdiction and conformed to the

statutory standards and legal principles involved in producing its decision,

ruling, or order.” Id.

[17] Under Section 10, a utility shall petition the Commission for approval of its 7-

year plan for eligible transmission, distribution, and storage improvements.

Additionally, under Section 10, if the Commission approves the 7-year plan, it

designates the eligible improvements included in the 7-year plan as eligible for

TDSIC treatment. Ind. Code § 8-1-39-10. Indiana Code section 8-1-39-2 states

that eligible transmission, distribution, and storage system improvements are

defined as:

new or replacement electric or gas transmission, distribution, or
storage utility projects that . . . either were (A) designated in the
public utility’s seven (7) year plan and approved by the
[C]omission under [S]ection 10 of this chapter as eligible for
TDSIC treatment; or (B) approved as a targeted economic
development project under section 11 of this chapter.

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 Ind. Code § 8-1-39-2(3). Therefore, under Indiana Code section 8-2-39-2(3), if a

project was not designated in the utility’s 7-year plan and approved under

section 10, or approved under Section 11, then the project is not an eligible

improvement for purposes of TDSIC rate treatment.

[18] In Nipsco Industrial Group, 31 N.E.3d 1, a panel of this court examined

NIPSCO’s 7-year electric plan to ascertain if it identified proposed projects for

the projected seven years with sufficient specificity. After reviewing the plan,

the court found that NIPSCO provided sufficient details for the projects for year

one of the plan, including the type of improvement, reason for the

improvement, the project title and location, and a project cost; however, the

same detailed information was not included for projects in years two through

seven, and only expected annual total spends for major project categories were

provided. 31 N.E.3d at 7. This court concluded that the Commission erred in

approving NIPSCO’s 7-year electric plan because the plan lacked sufficient

detail for the Commission to determine whether “NIPSCO’s plan for years two

through seven was ‘reasonable’ or to determine a ‘best estimate of the cost’ of

the improvements,” as is the standard required by Indiana Code section 8-1-39-

10(b). Id. at 8. Although the court acknowledged that NIPSCO required

flexibility in creating its 7-year plan as some equipment may require

replacement earlier or later than originally planned, it believed that this

flexibility was anticipated by the legislature when it enacted the updating

process contained in Section 9. Id. The court cautioned that the updating

process did not relieve a utility from its obligation to provide an initial 7-year

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 plan that met the statutory requirements. Id. Additionally, the court found that

it was impermissible for the Commission to establish a “‘presumption of

eligibility’ regarding the undefined projects for years two through seven”

because such a presumption “inappropriately shifts the burden of showing a

project’s eligibility for TDSIC treatment from NIPSCO to other intervening

parties.” Id. at 9.

[19] Section 9 requires that the utility update its 7-year plan with each tracker

petition it files with the Commission. Ind. Code § 8-1-39-9(a). In Nipsco

Industrial Group, this court concluded that the updating process under Section 9

allows for flexibility in the writing of a 7-year plan as with each petition under

Section 9, a utility must submit an updated plan. 31 N.E.3d at 8. Although the

term “update” is not defined in Section 9, in its TDSIC-3 order, the

Commission interpreted the statutory term “update” to require a showing of

changes that have occurred to the designated eligible improvements contained

in the 7-year plan since the last TDSIC filing. Appellant’s App. at 160. The

Commission also found that an update under Section 9 should include changes

to the factors considered in approving the plan, i.e., changes in an eligible

improvement’s cost estimate, necessity, and associated benefits. Id. This

interpretation discusses changes to previously-approved improvements

contained in the previous 7-year plan, but does not contemplate new

improvements or projects not included in the previously-approved 7-year plan.

[20] Recently, a panel of this court decided Indiana Gas Co. v. Indiana Utility

Regulatory Commission, __ N.E.3d __, No. 93A02-1604-EX-943 (Ind. Ct. App.

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Apr. 27, 2017), in which Vectren appealed the Commission’s order that

partially denied Vectren’s petition to update its 7-year plan under Section 9.

The Commission denied the petition as to new projects that had not been

previously listed and approved in the original 7-year plan, reasoning that it did

not have the authority to approve projects that were not included in the original

7-year plan. Id. at *4 __. In denying the petition as to new projects, the

Commission found that a plain reading of the term update in Section 9

indicated that the term only applied to projects that had been designated in the

original 7-year plan under Section 10. Id. Our court affirmed the

Commission’s denial, concluding that the Commission’s interpretation that the

Section 9 updating procedure precluded the addition of new projects was

consistent with the language of the TDSIC statute referring to eligible

improvements because, under the statute, an eligible improvement is a project

that was designated in the original 7-year plan and approved by the

Commission under Section 10. Id. at *6__. Therefore, because there is not a

corresponding definition of eligible improvements that are approved in a

Section 9 update, there is no basis under the TDSIC statute for a new project to

be added to an updated 7-year plan, and this court held that the Commission

did not err in denying the Section 9 update as to the addition of new projects.

Id. at *8 __. Based on the holding in Indiana Gas and on the Commission’s

interpretation of the word update in TDSIC-3, we agree with the interpretation

that an update under Section 9 should include changes to the cost estimates for

previously-approved improvements in the 7-year plan under Section 10, but not

new or previously-unknown improvements.
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[21] Updates under Section 9 should not include new projects and should merely

include changes to the previously-approved 7-year plan. However, the present

case presents a “unique situation” because, although the Commission had

previously approved NIPSCO’s original 7-year plan, the Electric Decision

determined that such approval was not proper under the TDSIC statute.

Therefore, the Commission found in its TDSIC-3 order that, while it was

making a determination under Section 9, it was required to confirm that

NIPSCO had shown sufficient information in its petition to find the projects

contained in TDSIC-3 to be eligible improvements. Appellant’s App. at 159.

Thus, we conclude that, in this unique situation where the original 7-year plan

was approved, but such approval was later shown to be in error, the updated 7-

year plan in TDISC-3, which was the first tracker proceeding after the Electric

Decision, represented the 7-year plan to which the Commission was required to

look when determining if the updated 7-year plan in TDSIC-4 was correct.

[22] NIPSCO initially filed its petition under Section 10 seeking approval of its 7-

year plan for its gas system on October 3, 2013. The Commission approved the

7-year plan and found that NIPSCO’s cost estimates for the 7-year plan were

reasonable, and that determination was never appealed. On August 28, 2014,

NIPSCO filed its first tracker petition, and the petition was approved by the

Commission, including NIPSCO’s proposed methodology for calculating the

TDSIC adjustment. NIPSCO filed its TDSIC-2, which was subsequently

dismissed in light of the Electric Decision with the understanding that NIPSCO

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 would request to recover the expenditures and costs covered in TDSIC-2

through its petition in TDSIC-3.

[23] On August 31, 2015, NIPSCO filed its TDSIC-3, which again sought approval

of its updated 7-year plan, and in its first order subsequent to the Electric

Decision, the Commission approved NIPSCO’s TDSIC-3. Based on the

Electric Decision, the Commission reevaluated its presumption that projects

proposed for years three through seven of the 7-year plan could be presumed

eligible and determined that NIPSCO, in its TDSIC-3, had presented sufficient

detail regarding project descriptions and cost estimates for those years

concerning a majority of the projects and projects groups. Appellant’s App. at

163. In TDSIC-3, NIPSCO sought to provide more specificity with respect to

the projects contained in the project groups in response to the Electric Decision.

In the TDSIC-3 order, the Commission approved the use of “project groups,”

which included some “identified” projects and other “yet to be identified”

projects and found that NIPSCO “provided ascertainable planning criteria for

identifying and selecting the specific improvements that it will undertake in

these project groups.” Id. at 163-64. The Commission also determined that

NIPSCO had provided sufficient detail and explanation for the changes in

estimated cost of the eligible improvements included in the updated 7-year plan,

had sufficiently demonstrated that public convenience and necessity required or

would require the eligible improvements, and had shown that the incremental

benefits of the plan justified the costs. Id. at 170-72. Industrial Group did not

appeal the TDSIC-3 order.

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[24] NIPSCO then filed its TDSIC-4 on February 29, 2016 and sought approval of

its updated 7-year plan, which again included actual and proposed estimated

capital expenditures and TDSIC costs that exceeded the amounts included in

the TDSIC-3 petition. The TDSIC-4 petition provided greater detail than the

previous petitions, including project estimates, summary of unit cost estimates,

multiple unit project lists and supporting documentation, and project change

requests. Id. at 8.

[25] In TDSIC-3, the Commission approved of the ascertainable planning criteria

that NIPSCO utilized to identify the improvements projects that were included

in TDSIC-4. Specifically, for multiple unit projects in the categories of “inspect

and mitigate” and “storage,” NIPSCO stated that asset replacements are

planned and prioritized based on DOT-mandated annual inspections and that if

a deficiency is identified through these inspections, federal regulations require

NIPSCO to reduce the risk presented by the deficiency. Id. at 164. NIPSCO

also identified specific work to be done and prioritized it based on a preset list

of planned replacements through 2020. Id. at 33. In the category of “system

deliverability,” NIPSCO utilizes several planning criteria to plan for adequate

system deliverability and to identify and evaluate projects to accommodate

customer demands and delivery requirements. Non-Confidential Ex. Vol. I at 92.

The criteria include periodic field measurements and natural gas modeling and

analysis software to perform system performance assessments and look into

alternate operating scenarios. Id. The gas system models analyze and predict

customer demand and pressure delivery requirements. Id. Projects are selected

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 when field measurements of pressure, flow rates, ambient temperatures, and gas

system modeling indicate that service to customers may be at risk. Appellant’s

App. at 163-64.

[26] The challenged multiple unit projects at issue here contain both specified and

unspecified projects. These multiple unit projects are determined by utilizing

the ascertainable planning criteria that was introduced and approved previously

in TDSIC-3. Therefore, any projects utilizing the ascertainable planning

criteria approved of in TDSIC-3 are not new projects because the multiple unit

project categories and the criteria utilized were designated and approved in the

7-year plan contained in the TDSIC-3 petition. As long as the future projects

contained in Section 9 updates are determined by utilizing the ascertainable

planning criteria from TDSIC-3, the projects should be considered eligible

improvements and may be included in the updates. However, to the extent that

the projects contained in the updates are new or are not determined using the

approved ascertainable planning criteria, they will be considered new projects

and cannot be included in a Section 9 update. Likewise, it would be improper

for a Section 9 update to include new criteria under which projects could be

determined.1

1
However, we do note that in its TDSIC-4 order, the Commission found that NIPSCO should work with the
Industrial Group to further delineate the criteria that NIPSCO uses to ensure that the parties “have a
sufficient understanding of the information used to evaluate whether a particular project satisfies the planning
criteria described by NIPSCO.” Appellant’s App. at 34. Therefore, to the extent that the planning criteria in
future plan updates changes to meet this directive, it will not be considered new criteria.

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[27] We, therefore, conclude that the Commission did not err in its approval of

NIPSCO’s TDSIC-4 update. The Commission properly approved NIPSCO’s

updated 7-year plan because the improvements included in the update were not

new projects as they were chosen by utilizing the ascertainable planning criteria

previously approved by the Commission and contained in NIPSCO’s 7-year

plan. We also do not find that the Commission erroneously granted a

designation of eligibility to the multiple unit project categories, because,

although the specific improvements in the categories would not be identified

until later filings, the improvements were not presumed to be eligible for TDSIC

treatment, but instead, would be selected by utilizing the ascertainable planning

criteria that had been previously approved by the Commission. Because we

find that the improvements included in TDSIC-4 were properly included in the

TDSIC-4 plan update, we affirm the Commission’s order.

[28] Affirmed.

Robb, J., concurs.

Barnes, J., dissents with separate opinion.

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 IN THE
COURT OF APPEALS OF INDIANA

NIPSCO Industrial Group,
Appellant-Intervenor, Court of Appeals Case No.
93A02-1607-EX-1644
v.

Northern Indiana Public Service
Company,
Appellee-Petitioner.

Barnes, Judge, dissenting.

[29] I respectfully dissent. Given the outline and structure articulated in NIPSCO

Industrial Group v. Northern Indiana Public Service Co., 31 N.E.3d 1 (Ind. Ct. App.

2015), I see no basic difference here. The “plan” that NIPSCO says it has for

the future and the “update” it says it needs run afoul, in my opinion, of Indiana

Code Chapter 8-1-39, the TDSIC statute.

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[30] We recognized in NIPSCO Indus. Group that the “legislature anticipated the

necessity of flexibility when it enacted the updating process of Indiana Code

Section 8-1-39-9.” NIPSCO Indus. Group, 31 N.E.3d at 8. “Allowing for

flexibility in a plan is not the same thing as not having a plan at all.” Id. Here,

NIPSCO’s inclusion of broad categories of unspecified “multiple unit projects”

does not comply with the statutory requirements. Allowing the utility to

include broad categories of unspecified projects defeats the purpose of having a

“plan.”

[31] It is also important to note that, even if NIPSCO does not receive rate increases

for a project through the TDSIC process, NIPSCO still may be reimbursed for

unexpected issues in the way it did before TDSIC was enacted through general

rate making cases. The TDSIC statute requires a specific plan, and it was not

designed to deal with those unexpected issues. Rather, it was intended for

planned projects. Of course, those projects might cost more than projected, and

the annual “update” provisions allow the utility to address those issues.

[32] No one expects NIPSCO to anticipate with pinpoint clarity what its needs and

requirements may be years in the future. What can and should be expected,

though, is that there be an amount of specificity in anticipated projects and

needs and that the utility simply not get carte blanche to “update” its plan while

exploring a rate increase. I understand that any utility, and NIPSCO in

particular, has a right to enjoy a profit. I have no problem with that. I do have

a problem with the overall vagueness and almost sleight of hand NIPSCO is

using to justify the TDSIC rate increase.

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