This year, lawmakers tried to focus everyone’s attention on such urgent matters as the dangers of any noun preceded by the letters “LGBTQ” and the need to divert educational funds to private-school vouchers for upper-middle-class families.
Meanwhile, the electric utilities’ personal legislative gopher squad was rushing through a last-minute bill to make it possible to force ratepayers to shoulder $212 million in costs the state’s Court of Appeals and Supreme Court had ruled Duke Energy would have to eat, essentially because the utility spent the money before it asked to be reimbursed for it. Sadly, House Bill 1417 and Senate Bill 9 also set a precedent for future depredations by other electric utilities, including possibly I&M.
Indiana utilities historically disposed of massive amounts of coal ash by dumping them into landfills and “ponds” that sometimes leach dangerous chemicals into the groundwater. When Duke embarked on a program to “remediate” some of its coal-ash dumps to meet new state and federal standards in the 2010s, it could have requested approval for the cost of that undertaking under a 2011 law.
That law, explained Kerwin Olson, executive director of the Indiana Citizens Action Coalition, was designed to “insulate the utility companies from any costs incurred” meeting those new standards – as long as they asked for and received approval for the spending in a timely fashion.
Instead, Duke waited until 2019 to ask the Indiana Utilities Regulatory Commission for permission to increase its rates for electric customers – in part so it could be reimbursed for an extra $212 million it was spending, without prior authorization, on the coal-ash-dump remediation.
The commission approved Duke’s request, and the Court of Appeals upheld that decision. But last year, the Indiana Supreme Court overruled both the commission and the Appeals Court, ruling that Duke’s request amounted to illegal “retroactive ratemaking.” The court noted that similar requests had been denied in the past.
Undeterred, Duke then asked the courts to be reimbursed for money it had spent on coal-ash-dump remediation during the period since its now-denied request for reimbursement had been filed. In February, without even pausing to marvel at the sheer corporate chutzpah, the Court of Appeals denied that request, too.
Never fear! Led by the breathtakingly pro-utility Rep. Ed Soliday, R-Valparaiso, the Republican super-majority passed one law, House Bill 1417, to allow Duke to recover the cleanup costs incurred before the Supreme Court ruled. To overrule the appeals court’s denial of Duke’s request to be repaid for costs incurred after it had presented its request to the IURC, legislators shoved an amendment into an unrelated measure, SB 9. Nine days later, Gov. Eric Holcomb was signing the last-minute bill into law. Two days after that, he signed HB 1417 as well.
There were a few dissenting voices.
“This just establishes the precedent that whenever a utility has a (court) ruling that doesn’t benefit them, they can come to the legislature and have it reversed,” Rep. Matt Pierce, D-Bloomington, who serves on the House Utilities Committee chaired by Soliday, said after SB 9 was passed.
“The average person doesn’t have that access,” he told the Indianapolis Star. “That only gets done for heavy hitters.”
Consumer advocates noted this isn’t the first time the legislature has stepped in to “correct” the courts when rulings have gone against the electric companies.
In 2018, the Indiana Supreme Court ruled that utilities could not raise their rates without submitting detailed plans to the IURC. So in 2019, the legislature rewrote the law to allow monopoly utilities to increase certain electric rates without going through a traditional rate-increase case or submitting specific, site-by-site plans to the commission. At the time, Olson called the legislation a “blank check” for utilities.
What accounts for such deference to energy companies on the part of supermajority Republican lawmakers? After all, if you’re “super,” shouldn’t you be able to rise above the pressure from corporate interest groups?
One reason is money. According to the Citizens Action Coalition, Duke Energy has donated $1.5 million to Hoosier politicians during the past decade. AEP/I&M has donated $994,050. And NIPSCO has given $1.4 million.
As always, lowly ratepayers who don’t make million-dollar contributions are likely to get stuck with the bill. What do you want to bet the utility is successful?