I N T H E

Indiana Supreme Court

Supreme Court Case No. 18S-EX-334

NIPSCO Industrial Group,

Appellant (Intervenor),

–v–

Northern Indiana Public Service Company,

Appellee (Petitioner).

Argued: November 21, 2017 | Originally Decided: June 20, 2018

Modified on Rehearing: September 25, 2018

Appeal from the Indiana Utility Regulatory Commission

No. 44403-TDSIC-4

On Petition to Transfer from the Indiana Court of Appeals

No. 93A02-1607-EX-1644

Opinion on Rehearing by Justice Slaughter

Chief Justice Rush and Justices David, Massa, and Goff concur
Indiana Supreme Court | Case No. 18S-EX-334 | September 25, 2018 Page 2 of 17

Slaughter, Justice.

Under traditional rate regulation, an energy utility must first make 

improvements to its infrastructure before it can recover their cost through 

regulator-approved rate increases to customers. The process for recouping 

these costs, sometimes not until years after they were incurred, is an 

expensive, onerous ratemaking case, which involves a comprehensive 

review of the utility’s entire business operations.

In 2013 the legislature authorized utilities to obtain regulatory 

preapproval for “designated” improvements to their infrastructure. 

Under the so-called “TDSIC” Statute—which provides for more prompt 

reimbursement of specified transmission, distribution and storage system 

improvements—a utility can seek regulatory approval of a seven-year 

plan that designates eligible improvements, followed by periodic petitions 

to adjust rates automatically as approved investments are completed. 

At issue here is the Indiana Utility Regulatory Commission’s 

preapproval of approximately $20 million in infrastructure investments 

for which the Commission authorized increases to NIPSCO’s natural-gas

rates under the TDSIC mechanism. NIPSCO is an energy utility with more 

than 800,000 customers in northern Indiana. Some of NIPSCO’s largest 

industrial customers—represented here by the NIPSCO Industrial 

Group—oppose NIPSCO’s entitlement to favorable rate treatment under 

the TDSIC Statute, contending the disputed projects do not comply with 

the Statute’s requirements.

The Commission’s holding below, which divided our Court of Appeals, 

approved various categories of improvements—referred to variously as 

“project categories”, “multiple-unit-project categories”, and “multipleunit projects”—that describe broad parameters for identifying future 

improvements but do not designate those improvements with specificity. 

NIPSCO defends these categorical designations by arguing it does not, 

and cannot, know in advance which specific segments of natural-gas pipes 

throughout its system will fail each year. But it does know, based on 

historical performance, that a certain percentage of its system will need to 

be replaced annually. NIPSCO contends the TDSIC Statute permits the 

Commission to approve a seven-year plan that describes future 
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investments in terms of ascertainable planning criteria, although when its 

plan was approved, NIPSCO did not know which specific segments of its 

system would need to be replaced.

The Industrial Group, in contrast, interprets the TDSIC Statute more 

narrowly. It argues the Statute requires the utility and the Commission to 

designate specific projects upfront, rather than to rely on categories of 

projects not identified with specificity until later years. For the Industrial 

Group, the traditional ratemaking case is still the primary process for 

seeking reimbursement, subject to occasional use of the TDSIC procedure 

in the limited band of investments to which it applies.

The stakes are much larger than just the roughly $20 million at issue 

between NIPSCO and the Industrial Group. The Commission, we are told, 

has approved billions of dollars of utility-infrastructure investments 

through the TDSIC process. Given the favorable regulatory treatment, 

utilities are likely to funnel increasing amounts of infrastructure 

investments through this reimbursement mechanism. How we resolve

these competing visions of the TDSIC Statute will likely have enormous 

financial consequences for utilities and their customers.

We conclude the TDSIC Statute permits periodic rate increases only for 

specific projects a utility designates, and the Commission approves, in the 

threshold proceeding and not for multiple-unit projects using

ascertainable planning criteria. In other words, a utility must specifically 

identify the projects or improvements at the outset in its seven-year plan 

and not in later proceedings involving periodic updates. There is an 

appreciable difference between designating specific “projects” and 

“improvements” up front, which the Statute requires, and describing the 

criteria for selecting them later, which the Commission approved. We 

agree with the Court of Appeals’ dissenting opinion that Commission 

approval of “broad categories of unspecified projects defeats the purpose 

of having a ‘plan’.” NIPSCO Indus. Grp. v. N. Ind. Pub. Serv. Co., 78 N.E.3d 

730, 740 (Ind. Ct. App. 2017) (Barnes, J., dissenting). 

Because we find that preclusion principles do not bar our consideration 

of this important legal issue of first impression, we grant transfer, reverse 

the Commission’s order in part, and remand.
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Factual and Procedural History

A. Traditional utility regulation

Utility regulation is premised on a “regulatory compact” in which the 

State sanctions a utility’s monopoly within a defined service area and 

subjects the utility to various regulatory restrictions and responsibilities.

As a quid pro quo for being granted a monopoly in a 

geographical area for the provision of a particular good or 

service, the utility is subject to regulation by the state to ensure 

that it is prudently investing its revenues in order to provide 

the best and most efficient service possible to the consumer. 

United States Gypsum, Inc. v. Ind. Gas Co., 735 N.E.2d 790, 797 (Ind. 2000) 

(quotation and citations omitted).

The State regulates utilities through the Commission, which is 

authorized by statute to act with “technical expertise to administer the 

regulatory scheme designed by the legislature ... to insure that public 

utilities provide constant, reliable, and efficient service to the citizens of 

Indiana.” N. Ind. Pub. Serv. Co. v. United States Steel Corp., 907 N.E.2d 1012, 

1015 (Ind. 2009) (citation omitted). See Ind. Code §§ 8-1-1-1 to 8-1-1-15. 

When exercising this authority, the Commission balances the public’s 

need for adequate, efficient, and reasonable service with the public 

utility’s need for sufficient revenue to meet the cost of furnishing service 

and to earn a reasonable profit. United States Gypsum, 735 N.E.2d at 797-98. 

“Proper rates are those which produce a fair and nonconfiscatory return, 

and such as will enable the company, under efficient management, to 

maintain its utility property and service to the public, and provide a 

reasonable return upon the fair value of its used and useful property.” 

Pub. Serv. Comm'n of Ind. v. Ind. Bell Tel. Co., 235 Ind. 1, 15, 130 N.E.2d 467, 

473 (1955) (citations omitted).

Traditionally, utility rates are adjusted through general ratemaking 

cases. General ratemaking is a “comprehensive” process, requiring the 
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Commission to “examine every aspect of the utility’s operations and the 

economic environment in which the utility functions to ensure that the 

data [the Commission] has received are representative of operating 

conditions that will, or should, prevail in future years.” United States

Gypsum, 735 N.E.2d at 798 (citation omitted).

B. The TDSIC process

Over the years, the legislature has supplemented traditional 

ratemaking with various “tracker” procedures that allow utilities to ask 

the Commission to adjust their rates to reflect various costs without 

having to undergo a full ratemaking case. The TDSIC Statute, I.C. ch. 8-1-

39, enacted in 2013, is one such procedure. It encourages energy utilities to 

replace their aging infrastructure by modernizing electric or gas 

transmission, distribution, and storage projects. This TDSIC procedure, 

pronounced “tee-DEE-zick”, is a process for utilities to assess a distinct 

charge—a Transmission, Distribution, and Storage System Improvement 

Charge—for completed projects deemed eligible improvements under the 

Statute. In contrast to traditional ratemaking, the TDSIC procedure 

permits a utility to seek preapproval of designated capital improvements 

to the utility’s infrastructure and then to recover the costs of those 

improvements every few months as they are completed. Eligible 

improvements are certain new or replacement utility projects that: 

(1) a public utility undertakes for purposes of safety, reliability, 

system modernization, or economic development . . . ; (2) were 

not included in the public utility’s rate base in its most recent 

general rate case; and (3) [were] designated in the public 

utility’s seven (7) year plan and approved by the commission 

under section 10 of this chapter as eligible for TDSIC 

treatment”. 

I.C. § 8-1-39-2.

The TDSIC Statute contemplates two distinct types of proceedings. 

First, under Section 10, the utility may seek regulatory approval of a 
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seven-year plan for designated improvements to transmission, 

distribution, and storage systems. See Id. § 8-1-39-10. The Commission 

shall then approve the plan and designate the planned improvements as 

eligible for TDSIC treatment if it finds the plan is reasonable. Id. § 8-1-39-

10(b). When determining that a plan is reasonable, the Commission’s 

order must include (1) “[a] finding of the best estimate of the cost of the 

eligible improvements”, (2) “[a] determination whether public 

convenience and necessity require or will require the eligible 

improvements”, and (3) “[a] determination whether the estimated costs of 

the eligible improvements ... are justified by the incremental benefits 

attributable to the plan”. Id.

Second, under Section 9, once the Commission has approved a sevenyear plan, the utility may petition every few months for periodic rate 

adjustments to recover “eighty percent (80%) of approved capital 

expenditures and TDSIC costs” for the system improvements designated 

as eligible and actually completed. Id. §§ 8-1-39-9(a), (c), (e). The 

remaining twenty percent can be recovered only “as part of the next 

general rate case that the public utility files with the commission.” Id. § 8-

1-39-9(b). The utility must “update [its] seven (7) year plan under 

subdivision (2) with each petition [it] files under this section.” Id. § 8-1-39-

9(a). Before a utility may recover additional costs above approved 

estimates, it must specifically justify the additional costs, and the 

Commission must specifically approve them. Id. § 8-1-39-9(f).

C. NIPSCO’s TDSIC litigation

1. Designated vs. described

The parties dispute what qualifies as an eligible project under Section 2, 

which requires both designation and approval of the project in a sevenyear plan the Commission approves under Section 10. I.C. § 8-1-39-2(3)(A). 

The Industrial Group claims the Commission can designate and approve 

projects identified only during the initial Section 10 process, and not 

during subsequent Section 9 petitions. It also claims that the TDSIC 

process is an extraordinary mechanism, applicable only in limited
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circumstances, and that the general ratemaking case remains the 

presumptive process for utilities to recover their investment costs.

NIPSCO, in contrast, argues the Commission can properly designate 

and approve multiple-unit projects, described using ascertainable 

planning criteria, as TDSIC-eligible. NIPSCO characterizes these multipleunit projects, generally, as planned undertakings that include component 

parts that need to be improved, but without knowing in advance which 

specific parts will require replacement. Here, the United States 

Department of Transportation mandates that NIPSCO annually inspect 

thousands of units of natural-gas pipelines throughout its system. 

NIPSCO does not know in advance which specific pipeline segments 

within its system it will need to update. But based on historical 

performance, NIPSCO expects a certain percentage of its system will fail 

each year and require replacement. Depending on the inspection results, 

NIPSCO then develops a schedule to replace worn assets. This 

information enables NIPSCO to identify the specific units of work 

completed within the multiple-unit projects for which it received 

Commission approval.

2. Current procedural posture

Shortly after the TDSIC Statute was enacted, NIPSCO filed two Section 

10 petitions, seeking approval of separate, but substantially similar, sevenyear plans: one each for its electric system and its gas system. The 

Commission approved NIPSCO’s Electric Plan in February 2014 and, in a 

separate proceeding, approved its Gas Plan in April 2014. The plans 

identified specific projects for the first year and described “project 

categories” for years two through seven. NIPSCO subsequently filed 

periodic Section 9 tracker petitions, seeking rate increases associated with 

completed matters referenced in the approved seven-year plans.

In 2015, the Court of Appeals reversed in part the Commission’s order 

approving NIPSCO’s Electric Plan. NIPSCO Indus. Grp. v. N. Ind. Pub. Serv. 

Co., 31 N.E.3d 1 (Ind. Ct. App. 2015). The Electric Plan lacked sufficient 

detail for the Commission to determine whether the plan was reasonable 

and whether it included a best estimate of the cost of improvements under 
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Section 10. Id. at 8. By identifying only the first year of improvements, the 

Plan presumed that future proposed projects identified in subsequent 

Section 9 “update” proceedings would be eligible for TDSIC treatment. Id.

at 8-9. Thus, the Court held, the Plan unlawfully relieved NIPSCO of its 

burden to show the proposed projects were TDSIC-eligible. Id. at 9.

When the Electric Plan appeal was decided, NIPSCO had already 

completed its first Gas Plan Section 9 tracker petition, TDSIC-1, and the 

second, TDSIC-2, was pending. Given the legal problems with its Electric 

Plan, NIPSCO voluntarily dismissed its TDSIC-2 Gas Plan petition with 

the understanding that its next Section 9 tracker petition, TDSIC-3, would 

seek TDSIC-2 reimbursement and modification of its Gas Plan to comply 

with the appellate ruling.

In TDSIC-3, NIPSCO again sought approval of an “updated” sevenyear Gas Plan. Although NIPSCO provided additional information for the 

proposed projects for all seven years of its revised seven-year Gas Plan, its 

TDSIC-3 petition continued to include projects identified with specificity 

as well as yet-to-be-identified projects. NIPSCO said it would identify

specific instances of completed improvements within certain projectgroup categories in subsequent Section 9 plan updates. The Commission 

found that TDSIC-3 presented “a unique situation” because it had already 

approved NIPSCO’s initial Section 10 Gas Plan in a final order. And it 

generally endorsed NIPSCO’s proposal to establish objective ascertainable 

criteria for selecting specific projects within “project group” categories. 

The Industrial Group did not challenge the Commission’s TDSIC-3 order

approving NIPSCO’s petition.

In February 2016, NIPSCO filed its fourth Section 9 petition—TDSIC4—the subject of this appeal. This filing included another update to the 

Gas Plan, seeking an increase of approximately $20 million in the 

previously approved “Inspect & Mitigate” category. This category 

included both additional distinct projects and an increased number of 

projects within previously approved categories. NIPSCO referred to these 

Inspect & Mitigate project groups as “multiple-unit projects”. 

The Industrial Group intervened at the Commission and opposed this 

petition for $20 million in rate relief. Particularly, the Industrial Group 
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objected to NIPSCO’s multiple-unit-projects approach, arguing that

project groups described using objective ascertainable-standard criteria 

are not permitted under the TDSIC Statute. Despite this challenge, the 

Commission approved NIPSCO’s TDSIC-4 petition. Relying on its TDSIC3 order, the Commission found NIPSCO’s multiple-unit-project categories 

were supported by sufficient ascertainable planning criteria for later 

identifying eligible improvements, and the roughly $20 million increase 

was based on “further identification of the specific projects or asset 

replacements within the approved project groups.” 

The Industrial Group appealed the Commission’s TDSIC-4 order, and a 

divided Court of Appeals affirmed. The majority held that NIPSCO’s 

updated seven-year plan was lawful “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.” 78 N.E.3d at 739. The dissent 

believed the TDSIC Statute requires that a “specific plan” be established in 

the initial Section 10 proceedings, and that merely describing multipleunit-project categories does not sufficiently designate which specific 

projects are eligible for reimbursement through later Section 9 

proceedings. Id. at 740.

Standard of Review

When reviewing Commission decisions, we conduct three levels of 

review: one for factual findings; another for mixed questions of law and 

fact; and a third for questions of law. At issue here is the last category. 

This case does not implicate the Commission’s ratemaking expertise but 

presents a pure question of law: Does the TDSIC Statute authorize the 

Commission to approve “project categories” or “multiple-unit projects”

described using ascertainable planning criteria?

We review questions of law de novo, Ind. Bell Tel. Co. v. Ind. Util. 

Regulatory Comm'n, 715 N.E.2d 351, 354 (Ind. 1999) (citation omitted), and 

accord the administrative tribunal below no deference. To do otherwise 

would abdicate our duty to say what the law is. See, e.g., Marbury v. 
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Madison, 5 U.S. (1 Cranch) 137, 176 (1803). Such plenary review is 

“constitutionally preserved” for the judiciary, United States Steel, 907 

N.E.2d at 1016, and considers whether the disputed “decision, ruling or 

order is contrary to law.” Citizens Action Coal. of Ind., Inc. v. N. Ind. Pub. 

Serv. Co., 485 N.E.2d 610, 613 (1985) (citation omitted). Such legal 

questions are for the courts to resolve and turn on “whether the 

Commission stayed within its jurisdiction and conformed to the statutory 

standards and legal principles involved in producing its decision, ruling, 

or order.” United States Steel, 907 N.E.2d at 1016. 

Separation-of-powers principles do not contemplate a “tie-goes-to-theagency” standard for reviewing administrative decisions on questions of 

law. In discharging our constitutional duty, we pronounce the statutory 

interpretation that is best and do not acquiesce in the interpretations of 

others. Deciding the scope of the Commission’s authority under the 

TDSIC Statute falls squarely within our institutional charge. Crafting our 

State’s utility law is for the legislature; implementing it is for the executive 

acting through the Commission; and interpreting it is for the courts.

Discussion and Decision

I. Multiple-unit projects described using 

ascertainable criteria are not eligible for TDSIC 

treatment.

We conclude the TDSIC Statute does not apply to project categories or 

multiple-unit projects described using ascertainable criteria. The Statute 

requires the Commission to “designate” eligible projects in a threshold 

seven-year plan under Section 10. The only interpretation of “designate” 

that satisfies the dual statutory requirements of particularity and cost 

justification is one requiring projects to be identified with specificity from 

the outset. In addition, Section 9 “update” petitions enable the utility to 

obtain rate adjustments as it completes the approved projects and incurs 

the additional budgeted costs. The only projects consistent with Section 

10’s preapproval requirement are those the utility specified at the 
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beginning of the plan, and not “new” projects or those requiring the 

passage of time to specify later. The Commission erred when it authorized 

multiple-unit-project categories in a Section 10 proceeding and approved 

NIPSCO’s later specification of projects under Section 9. 

A. The TDSIC Statute requires the Commission to 

“designate” eligible projects in a threshold seven-year 

plan.

A utility seeking favorable rate treatment under the TDSIC Statute for 

eligible infrastructure improvements must file with the Commission a 

proposed seven-year plan that designates the planned projects. I.C. §§ 8-1-

39-2(3)(A), 8-1-39-10(a). The Commission must approve the plan if it is 

reasonable. Id. § 8-1-39-10(b). What is reasonable turns on three statutory 

guideposts: (i) the best-estimated cost of the improvements, (ii) their 

public convenience and necessity, and (iii) their cost-justified benefits. Id. 

A meaningful cost-benefit analysis requires the Commission to determine 

whether the estimated costs of the designated improvements are justified 

by their incremental benefits. Id. § 8-1-39-10(b)(3).

If the Commission finds the plan reasonable considering the costbenefit analysis, it must designate and approve projects as TDSIC-eligible. 

Id. §§ 8-1-39-2(3)(A), 8-1-39-10(b). In this context, TDSIC-eligible projects 

are “new or replacement electric or gas transmission, distribution, or 

storage utility projects” that: 

(1) a “utility undertakes for purposes of safety, reliability, system 

modernization, or economic development”;

(2) “were not included in the utility’s rate base in its most recent 

general rate case”; and 

(3) were “designated” in the utility’s seven-year plan that the 

Commission approved under Section 10.

Id. § 8-1-39-2. Thus, both the utility’s proposed plan and the Commissionapproved plan under Section 10 must “designate” the eligible 

improvements. A project or improvement not “designated” in the sevenyear plan is not “eligible for TDSIC treatment” under Section 2.
Indiana Supreme Court | Case No. 18S-EX-334 | September 25, 2018 Page 12 of 17

“Designate” is an undefined statutory term. When interpreting a 

statute, we presume the legislature uses undefined terms in their common 

and ordinary meaning. In re S.H., 984 N.E.2d 630, 635 (Ind. 2013). As a 

verb, “designate” means, among other things, “to appoint and set apart 

for a specific purpose” or to “specify”. Designate, MERRIAM-WEBSTER’S 

DICTIONARY AND THESAURUS (2007). In TDSIC-3, the Commission 

approved a project category reciting ascertainable planning criteria that 

NIPSCO later used to select specific improvements identified in TDSIC-4. 

For example, NIPSCO’s Section 10 petition identified two project 

categories—“storage” and “inspect and mitigate”—that described future 

asset replacements with reference to annual inspections mandated by the 

United States Department of Transportation. These categories necessarily 

were generic descriptions of NIPSCO’s forthcoming projects—and not 

specific designations of them—because NIPSCO had not yet performed 

the inspections that would reveal which parts of NIPSCO’s system would 

require replacement. That isn’t NIPSCO’s fault; it’s not gifted with 

prevision. But it does mean that NIPSCO’s Section 10 plan could only 

describe the projects it would undertake in the future and could not 

specifically identify them at the outset when it first sought and obtained 

approval for its plan. It is also why NIPSCO’s specific identification of its 

projects did not occur until it later filed plan “updates” under Section 9. In 

other words, only after the Commission found the Section 10 plan 

reasonable was NIPSCO able to identify and prioritize specific work to be 

done based on a preset list of proposed replacement categories. 

We conclude that “designate” in Sections 2 and 10 requires both the 

utility and the Commission to identify the TDSIC-eligible projects with 

particularity in the threshold proceeding and does not allow the approval 

of project categories that require a later specification based on 

ascertainable planning criteria. This interpretation is consistent with the 

further requirement that the Commission meaningfully apply the Statute’s 

cost-benefit guideposts during the Section 10 proceeding and approve the 

project(s) submitted in the seven-year plan. Because Section 2 requires the 

Commission to designate and approve TDSIC-eligible projects only after 

finding a plan reasonable under Section 10, the Commission’s 

reasonableness determination necessarily sets the budget and defines the 
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scope of a seven-year plan to what the Commission considered and 

approved in the threshold proceeding. Thus, the Commission order 

approving the Section 10 plan must define the plan’s scope with 

particularity and establish a best-estimate budget for effectuating the plan.

The Commission’s order does not satisfy these statutory requirements.

Our view of what “designate” means in the TDSIC Statute is illustrated 

by Major League Baseball’s designated-hitter rule. The rule, which was 

first implemented in the American League in 1973, allows a team to add a 

tenth player to the traditional nine-player lineup who will bat for the 

pitcher, typically the weakest hitter on the field. Before a game, each 

manager’s lineup card must “designate” which player is to serve as the 

designated hitter. Major League Baseball, OFFICIAL BASEBALL RULES, Rule 

4.03(c) & 5.11 (2018). The rule requires naming a specific player as the DH 

from the team’s 25-man roster. Anything less than a player-specific 

identification at the outset of the game will not suffice. It is inadequate, for 

example, for the lineup card to describe the DH anonymously or 

generically as one of the fifteen (or so) remaining players on the roster. 

Waiting until the DH’s turn at bat to identify a player doesn’t comport 

with the rule. Such “player-to-be-named-later” designations in the lineup 

card don’t work in baseball. And neither do “project-to-be-named-later” 

designations suffice under the TDSIC Statute.

B. Section 9 update petitions cannot add new projects 

beyond those initially approved under Section 10 and 

cannot revise the seven-year-plan’s budget.

After the Commission has approved the foundational seven-year plan 

under Section 10, the utility may file petitions every few months under 

Section 9 to obtain “automatic” rate adjustments for approved costs and 

expenditures as it completes these improvements and puts them into 

service. I.C. §§ 8-1-39-9(a), (c), (e). These periodic Section 9 petitions allow 

the utility to recoup eighty percent of such approved costs and 

expenditures. Id. § 8-1-39-9(a). The remaining twenty percent is 

recoverable during the general ratemaking case required before the end of 
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the plan. Id. § 8-1-39-9(b), (d). The Statute thus fixes the approved budget 

recoverable throughout the duration of the seven-year plan. 

With each Section 9 petition a utility files, it must also “update” its 

seven-year plan. Id. § 8-1-39-9(a). “Update” also is undefined in the 

Statute. The best reading of “update” requires the utility to keep records 

and supply progress reports necessary for the lawful administration of the 

previously designated and approved TDSIC projects. Considering Section 

2’s definition of eligible improvements and Section 10’s reasonableness 

inquiry, we conclude that a Section 9 “update” requires the utility to 

“identif[y] projected effects of the [seven-year plan] on retail rates and 

charges” and to cross-reference that progress with the approved sevenyear plan. Id. § 8-1-39-9(a). Thus, each Section 9 petition enables the 

Commission to track when preapproved projects are put into service; to 

authorize the “timely recovery of eighty percent (80%) of approved capital 

expenditures and TDSIC costs”, id.; and to prepare for the mandated 

general ratemaking case. Id. § 8-1-39-9(d). To be clear, Section 9 updates do 

not authorize the Commission to designate or approve new projects at the 

unit level. Rather, they should merely document changes to and 

developments in the administration of the previously approved Section 10 

plan.

Because the Statute neither explicitly nor implicitly authorizes the 

Commission to approve multiple-unit projects as eligible for TDSIC 

treatment, NIPSCO cannot use the TDSIC mechanism to recover the 

multiple-unit-project portions of its Section 10 plan that either were 

identified with particularity for the first time in its TDSIC-4 petition or 

remain unspecified.

II. Preclusion principles do not bar the Industrial 

Group’s appeal.

Finally, we reject NIPSCO’s argument that principles of claim and issue 

preclusion bar the Industrial Group from challenging the Commission’s 

TDSIC-4 order. Merely because the Industrial Group could have 

challenged the TDSIC-3 order, but did not, does not mean the legal 
Indiana Supreme Court | Case No. 18S-EX-334 | September 25, 2018 Page 15 of 17

methodology that order embraced is immune from legal challenge 

thereafter.

We look to the Restatement (Second) of Judgments to guide our 

preclusion analysis. See Sullivan v. Am. Cas. Co. of Reading, Pa., 605 N.E.2d 

134, 138 (Ind. 1992) (discussing Sections 28 & 29’s adoption of the modern 

rule that mutuality and identity of parties are no longer required for 

defensive use of collateral estoppel); Miller Brewing Co. v. Ind. Dep't of State 

Revenue, 903 N.E.2d 64, 68 (Ind. 2009) (citing Section 28 for proposition 

that “preclusion may not apply where there are new facts or where a 

change in the law or legal climate would dictate a different outcome”). A 

noteworthy exception to general preclusion principles applies here and 

counsels in favor of our addressing the important legal issues presented. 

An issue is not precluded if “[t]he issue is one of law and ... a new 

determination is warranted ... to avoid inequitable administration of the 

laws”, RESTATEMENT (SECOND) OF JUDGMENTS § 28(2) (1982). Nor is an issue 

precluded if it is “one of law and treating it as conclusively determined 

would inappropriately foreclose opportunities for obtaining 

reconsideration of the legal rule upon which it was based”. Id. § 29(7).

Our Court will not foreclose review of a legal issue of first impression 

“when other litigants are free to urge that the rule should be rejected. Such 

preclusion might unduly delay needed changes in the law and might 

deprive a litigant of a right that the court was prepared to recognize for 

other litigants in the same position.” Id. § 28 cmt. b. If we were to apply 

preclusion principles here, that determination would foreclose ”an 

opportunity to reconsider the applicable rule, and thus to perform [our]

function of developing the law.” Id. § 29 cmt. i. This consideration is 

“especially pertinent ... when the issue is of general interest and has not 

been resolved by the highest appellate court that can resolve it.” Id.

To be sure, the Industrial Group’s failure to appeal the TDSIC-3 order 

does mean, as the Group acknowledges, that specific projects identified 

and approved in TDSIC-3 are beyond challenge. But the Group’s failure to 

challenge TDSIC-3 does not bar the Group from challenging previously 

undesignated and unapproved projects for which NIPSCO sought and 

obtained rate adjustments from the Commission in TDSIC-4.
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The Commission’s legal methodology of approving multiple-unitproject categories described using ascertainable planning criteria is a pure 

issue of law, of general interest, that we have not previously resolved. 

And we conclude its methodology remains subject to challenge here. 

Indiana courts have long held that agencies remain free to correct their 

own erroneous interpretations of statutes in later proceedings. Adkins v. 

City of Tell City, 625 N.E.2d 1298, 1302 (Ind. Ct. App. 1993); State ex rel. 

ANR Pipeline Co. v. Ind. Dep't of State Revenue, 672 N.E.2d 91, 94 (Ind. Tax 

Ct. 1996). We decline to adopt a preclusion theory that prevents litigants 

from urging such a course correction.

Conclusion

We hold that periodic rate increases are available only for specific 

projects a utility designates in the threshold TDSIC proceeding and not for 

multiple-unit-project categories it describes using ascertainable planning 

criteria. The Commission thus erred in approving various proposed 

categories of unspecified improvements that NIPSCO did not identify 

with particularity until it filed subsequent periodic Section 9 petitions. For 

these reasons, we grant the Industrial Group’s petition to transfer. We 

reverse the portions of the Commission’s TDSIC-4 Order that approved 

previously unspecified improvements. And we remand to the 

Commission with instructions to identify such project categories that were 

not identified with specificity in TDSIC-3. The costs for all multiple-unit 

projects as to which particular improvements were identified for the first 

time in TDSIC-4 are disallowed for TDSIC recovery to the extent those 

projects were not properly designated in the previously approved sevenyear plan.

Rush, C.J., and David, Massa, and Goff, JJ., concur.
Indiana Supreme Court | Case No. 18S-EX-334 | September 25, 2018 Page 17 of 17

A T T O R N E Y S F O R A P P E L L A N T

Todd A. Richardson

Joseph P. Rompala

Lewis Kappes, P.C.

Indianapolis, Indiana

A T T O R N E Y S F O R A P P E L L E E

Brian J. Paul

Daniel E. Pulliam

Faegre Baker Daniels LLP

Indianapolis, Indiana

Claudia J. Earls

Christopher C. Earle

NiSource Corporate Services – Legal

Indianapolis, Indiana