If Gov. Mitch Daniels and others in state government believe an internal review will put to rest questions about the Indiana Utility Regulatory Commission’s cozy relationship with Duke Energy, they’re mistaken. An ethical breach that has led to the firings or resignations of four men demands more than a review by the agency. The web of dealings between the IURC and a company it is charged with regulating demands an independent investigation.
Concerns were raised when an IURC attorney, Scott Storms, left for a job at Duke. To the governor’s credit, he quickly fired IURC chairman David Lott Hardy, who signed off on the questionable move.
But Hardy’s removal prompted a deeper look into communication between the state and the utility company. The Indianapolis Star requested e-mails and found that the former chairman and Duke executive James Turner were good friends. On July 2, Turner e-mailed Hardy to say he was on his boat, heading out to Lake Michigan:
Would the ethics police have a cow if you and the woman came up some weekend? Turner asked.
It would be a nice run in the
According to the Star, the two men traded as many as 10 e-mails a day, sometimes discussing private personnel matters involving Duke employees and job candidates.
Communication between a Duke official who earned compensation totaling $4.35 million last year and a state regulator earning $109,000 a year begs scrutiny. It points to a relationship allowing access unavailable to utility consumers and watchdog groups.
In its review, the state found only one decision – a ruling that Duke could charge electric consumers for costs related to a 2009 ice storm – that should be reconsidered. The agency did not release the review related to Duke’s controversial Edwards- port power plant, a $2.9 billion project. Citizens Action Coalition, Sierra Club Hoosier Chapter and others have charged that its escalating cost is one result of conflicts of interest, undue influence and other misconduct related to regulatory oversight.
In the interest of economies of scale, for-profit utility companies are granted monopoly status in exchange for government regulation of price and service. For the balancing act to work, government must do its part in exercising oversight. The relationship between Duke Energy and the IURC strains the public trust.
Resistance from Duke’s large industrial customers has scuttled the deal allowing the Edwardsport plant cost overruns to be passed on to ratepayers. Continuing demands for answers in the growing ethics scandal, as well as an FBI investigation now under way, should help to allay concerns that state officials have forgotten their proper role in regulating Duke Energy.