Court Opinion

ID: 9862197
Source: CourtListenerOpinion
Date Created: 2023-09-25 01:03:14.344225+00
Date Added: 2024-06-11T11:30:30.675383
License: Public Domain

SHEPARD, Chief Justice,
dissenting.
I cannot agree with the majority’s decision to dismantle part of the settlement agreement and order of the Utilities Regulatory Commission. These were laboriously crafted in 1986 to deal with the financial emergency arising out of the cancellation of the Marble Hill nuclear project. The settlement agreement which the Commission approved was the subject of intense negotiations between Public Service Company of Indiana and the Utility Consumer Counselor. The Citizens Action Coalition participated in some of the discussions but did not join in the agreement.
The agreement included a variety of measures affecting PSI’s capital base and rates, detailed in some fifteen paragraphs. Some of these measures placed burdens on the company’s shareholders, who wrote off their investment in Marble Hill without litigating whatever statutory or constitutional claims for recoupment the company may have had. Other parts of the 1986 agreement and order protected consumers: PSI was barred for three years from seeking rate increases.
There was widespread recognition that the 1986 order represented a difficult solution to a series of events which had no precedent. The order was not universally applauded as equitable or legal, of course, and the parties now before us sought to set it aside through the process of judicial review. These parties elected not to challenge that portion of the order which is presently at issue; they chose instead to challenge other provisions of the 1986 order. The courts heard these challenges and affirmed the decision of the Commission. Citizens Action Coalition v. Public Serv. Co. of Indiana (1990), Ind.App., 552 N.E.2d 834, trans. denied.
After Congress enacted the Tax Reform Act of 1986, the Commission set about determining how utility rates in the state should be adjusted downward to reflect the lower corporate tax rates which that Act provided. The Commission noted that a few utilities were in the midst of ratemak-ing when the Act was passed, and it elected not to review the rates of those utilities whose rates had already been set by taking tax rate reductions into account. When the Commission acted on June 1, 1987, to set new rates for a great many utilities, it noted in effect that its 1986 order for PSI had taken tax rate reductions into account and that there was no need for further review. Record at 228.
Five years after the accommodation reached in 1986, an accommodation affirmed by the state’s courts, the majority of this Court takes one piece out of the package and leaves the rest. In effect, the majority orders the Commission to restructure the settlement after the fact by vacating just one of its provisions, the one governing recovery through the tax system of part of the $1.6 billion which shareholders spent and lost on Marble Hill.
The 1986 proceeding and the settlement and order which brought it to a close presented a host of issues which the company and the Consumer Counselor might well have hoped to resolve on more favorable terms. Was the emergency rate relief inadequate or too generous? Did the Commission have any authority to prohibit a utility from seeking future rate increases? Were the facts surrounding the construction of Marble Hill sufficiently different to *338present constitutional questions the outcome of which might be different than those raised and resolved in NIPSCO I? Issues such as these were debated, negotiated, and settled. The contending parties each gave something and received something in the course of devising a solution to the financial disaster of Marble Hill. Those who believed the settlement was illegal and unjust challenged the solution, and the judiciary rejected the challenge.
The Public Counselor has done an honorable thing in standing by his 1986 agreement. By dismantling only a part of that agreement, this Court imposes a new hit on the company's shareholders while binding them to their 1986 relinquishment of their legal rights. This is a late hit after the whistle, and it is not fair play.