Court Opinion

ID: 4583556
Source: CourtListenerOpinion
Date Created: 2020-11-04 16:03:53.533381+00
Date Added: 2024-06-11T13:44:27.321549
License: Public Domain

FILED
                                                                      Nov 04 2020, 8:48 am

                                                                          CLERK
                                                                      Indiana Supreme Court
                                                                         Court of Appeals
                                                                           and Tax Court

ATTORNEYS FOR APPELLANTS                                  ATTORNEYS FOR APPELLEES
Citizens Action Coalition of Indiana, Inc.                Indiana Utility Regulatory
                                                          Commission
Jennifer A. Washburn
Indianapolis, Indiana                                     Aaron T. Craft
City of Indianapolis                                      Jeremy R. Comeau
                                                          Steven L. Davies
Anne E. Becker                                            Beth E. Heline
Bette Jean Dodd                                           Indianapolis, Indiana
Indianapolis, Indiana
                                                          Indianapolis Power and Light
Indiana Office of Utility Consumer                        Company
Counselor
                                                          Peter J. Rusthoven
Abby R. Gray                                              Teresa E. Morton
William I. Fine                                           Jeffrey M. Peabody
Randall C. Helmen                                         Indianapolis, Indiana
Jeffrey M. Reed
Indianapolis, Indiana
IPL Industrial Group
Todd A. Richardson
Joseph P. Rompala
Indianapolis, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020                           Page 1 of 22
      IPL Industrial Group, Citizens                            November 4, 2020
      Action Coalition of Indiana,                              Court of Appeals Case No.
      Inc., City of Indianapolis, and                           20A-EX-800
      Indiana Office of Utility                                 Appeal from the Indiana Utility
      Consumer Counselor,                                       Regulatory Commission
      Appellants-Intervenors,                                   The Honorable Jennifer L.
                                                                Schuster, Administrative Law
              v.                                                Judge
                                                                The Honorable James F. Huston,
      Indianapolis Power and Light                              Chairman
      Company and Indiana Utility                               IURC Cause No. 45264
      Regulatory Commission,
      Appellees-Petitioners.

      Riley, Judge.

                                STATEMENT OF THE CASE
[1]   Appellants-Intervenors and Statutory Party, IPL Industrial Group, Indiana

      Office of Utility Consumer Counselor, City of Indianapolis, and Citizens

      Action Coalition of Indiana, Inc. (Collectively, Consumer Parties), appeal the

      Indiana Utility Regulatory Commission’s (Commission) Order approving

      Appellee-Petitioner’s, Indianapolis Power & Light Company (IPL), Proposed

      Plan involving $1.2 billion in system investments over a seven-year period.

      Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020                   Page 2 of 22
[2]   We affirm.

                                                    ISSUES
[3]   The Consumer Parties raise three issues on appeal, which we restate as follows:

          1. Whether the Commission’s decision to admit into evidence IPL’s

              workpapers was an abuse of discretion, when the admission occurred at

              the end of the evidentiary hearing and without a sponsoring witness or

              foundation;

          2. Whether the Commission erroneously interpreted the statutory

              requirement that the incremental benefits yielded by the Proposed Plan

              must justify its estimated costs when IPL’s evidence established that its

              Proposed Plan was geared towards risk reduction of an already highly

              reliable system; and

          3. Whether the Commission failed to make specific findings on material

              issues and only formulated a conclusory finding in summary fashion on

              the statutory cost-justification requirement and the disputed

              monetization analysis offered by IPL.

                      FACTS AND PROCEDURAL HISTORY
[4]   The case before us arises under the Transmission, Distribution, and Storage

      System Improvement Charge (TDSIC) statute, as enacted in Indiana Code Ch.

      8-1-39. Unlike a traditional rate case which involves a comprehensive review of

      a utility’s operations and financial status, the TDSIC mechanism allows utilities

      to request increases in their rates—outside of a rate case—to fund certain

      Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020       Page 3 of 22
      upgrades and improvements to an energy utility’s transmission, distribution, or

      storage system in Indiana. The TDSIC statute institutes two distinct types of

      proceedings. First, pursuant to Section 10, the utility must secure the

      Commission’s preapproval of a plan to complete identified improvement

      projects at a defined budget over a specified time period. See I.C. § 8-1-39-10.

      To gain approval, the plan must satisfy certain enumerated statutory criteria,

      including the best estimate of costs, a finding of public convenience and

      necessity, a showing of reasonableness, and a determination that “the estimated

      costs of the eligible improvements included in the plan are justified by

      incremental benefits attributable to the plan.” See I.C. § 8-1-39-10(b). Once a

      plan is approved, the utility may then, pursuant to Section 9, seek periodic rate

      increases at six-month intervals to recover 80% of the approved costs as the

      planned work is completed. See I.C. § 8-1-39-9(a). Up to these authorized

      expenditures, rate recovery is automatic. The remaining 20% of the costs is

      accumulated in a deferred account for recovery, with carrying charges, in the

      utility’s next rate case. See I.C. § 8-1-39-9(c).

[5]   On July 24, 2019, IPL filed its petition with the Commission under Section 10

      of the TDSIC statute, seeking approval of proposed expenditures of $1.2 billion

      over a seven-year period to replace, rebuild, upgrade, redesign, and modernize a

      wide range of IPL’s transmission- and distribution-system assets (Proposed

      Plan). The Proposed Plan was intended to address grid resiliency, so that the

      system could be restored more easily when outages occur. The investments

      under the Proposed Plan were prioritized through a Risk Model, which

      Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020        Page 4 of 22
      identified assets based on the amount of risk—in terms of likelihood of failure

      and consequence of failure—and the cost to buy down risk in order to achieve

      the highest risk reduction per dollar invested. IPL projected that the planned

      projects would result in a system risk reduction of about 36.6% over the seven-

      year period. To justify the enormous cost of the Proposed Plan, IPL relied on a

      monetization analysis. Using a Department of Energy calculation tool, IPL

      monetized the impact of projected outages over a twenty-year period, which

      IPL asserted could be avoided through the planned projects enumerated in the

      Proposed Plan. According to IPL, the monetization analysis reflects a net

      benefit of $939 million to IPL customers by the end of the twenty-year period.

[6]   At the same time IPL filed its petition, it also prefiled, pursuant to Commission

      procedure, its case-in-chief evidence consisting of the written testimony and

      related exhibits of six witnesses. IPL also submitted voluminous workpapers

      consisting of underlying supporting material associated with the witnesses’

      testimony.

[7]   By statute, the ratepaying public is represented in all utility proceedings by the

      Office of Utility Consumer Counselor (OUCC), an independent state agency.

      In addition, three other Consumer Parties intervened in this proceeding. The

      IPL Industrial Group (Industrial Group) is an ad hoc group comprised of

      several large volume consumers served by IPL; the City of Indianapolis

      intervened in its capacity as an IPL ratepayer with an interest in the impact of

      IPL rates on the local economy and its citizenry; and Citizens Action Coalition

      and Environmental Law & Policy Center are advocacy organizations for

      Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020       Page 5 of 22
      consumer and environmental interests that were jointly represented below. All

      of the Consumer Parties opposed IPL’s petition for approval of the Proposed

      Plan and prefiled their written testimony and exhibits in response. On October

      23, 2019, IPL filed its rebuttal evidence but did not file any additional

      workpapers in connection with the rebuttal evidence.

[8]   Over the course of three days—November 14, 21, and 22, 2019—the

      Commission conducted a publicly noticed evidentiary hearing. On the third

      and final day of the proceeding, after the penultimate IPL witness had testified

      and both cross-examination and redirect were completed, IPL’s counsel orally

      moved the Commission to take administrative notice of the voluminous

      workpapers that had been submitted by IPL at the outset of the proceeding.

      The workpapers had not been offered as exhibits in connection with the

      testimony of any IPL witness at the hearing. The witness who testified

      subsequently addressed accounting issues that were unrelated to nearly all of

      the mass of workpapers, and the witness did not identify, authenticate, or

      reference the workpapers during his testimony. The Consumer Parties objected

      to IPL’s request for administrative notice of the workpapers as being untimely

      and not sponsored by any witness. They also asserted that IPL should have

      included the workpapers in its prefiled evidence if it wanted them to be part of

      the evidentiary record. The Commission took the issue under advisement.

[9]   On March 4, 2020, The Commission issued its Order, in which it addressed the

      statutory criteria under Section 10 of the TDSIC Statute, determining that the

      estimated costs of the projects in IPL’s Proposed Plan were justified by their

      Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020         Page 6 of 22
       incremental benefits, and approved the Plan as proposed by IPL in its entirety.

       As part of the Order, the Commission granted IPL’s request for administrative

       notice of its workpapers.

[10]   The Consumer Parties appealed. Additional facts will be provided if necessary.

                               DECISION AND DISCUSSION
                                              I. Standard of Review

[11]   The General Assembly created the Commission primarily as a fact-finding body

       with the technical expertise to administer the regulatory scheme devised by the

       legislature. Northern Ind. Publ. Service Co. v. United States Steel Co., 907 N.E.2d

       1012, 1015 (Ind. 2009). The Commission’s assignment is to ensure that public

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

       Indiana. Ind. Bell Tel. Co. v. Ind. Util. Regulatory Comm’n, 715 N.E.2d 351, 354

       n.3 (Ind. 1999). The Commission can only exercise power conferred upon it by

       statute. Northern Ind. Publ. Service Co., 907 N.E.2d at 1015. An appeal of the

       Commission’s decision amounts to a two-tiered review by the appellate court.

       On the first level, it requires a review of whether there is substantial evidence in

       light of the whole record to support the Commission’s findings of basic fact.

       Citizens Action Coalition of Ind., Inc. v. N. Ind. Pub. Serv. Co., 485 N.E.2d 610, 612

       (Ind. 1985). Such determinations of basic fact are reviewed under a substantial

       evidence standard, meaning the order will stand unless no substantial evidence

       supports it. McClain v. Review Bd. of Ind. Dept. of Workforce Dev., 693 N.E.2d

       1314, 1317-18 (Ind. 1998).

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020          Page 7 of 22
[12]   During its substantial evidence review, “the appellate court neither reweighs the

       evidence nor assesses the credibility of witnesses and considers only the

       evidence most favorable to the [Commission’s] findings.” Id. The

       Commission’s order is conclusive and binding unless (1) the evidence on which

       the Commission based its findings was devoid of probative value; (2) the

       quantum of legitimate evidence was so proportionately meager as to lead to the

       conviction that the finding does not rest upon a rational basis; (3) the result of

       the hearing before the Commission was substantially influenced by improper

       considerations; (4) there was no substantial evidence supporting the findings of

       the Commission; (5) the order of the Commission is fraudulent, unreasonable,

       or arbitrary. Id. at 1317 n.2. This list of exceptions is not exclusive. Id. At the

       second level, the order must contain specific findings on all the factual

       determinations material to its ultimate conclusions. Citizens Action Coalition,

       485 N.E.2d at 612. We review the Commission’s conclusions of ultimate facts

       for reasonableness, the deference of which is based on the amount of expertise

       exercised by the agency. McClain, 693 N.E.2d at 1317-18.

[13]   Insofar as the order involves a subject within the Commission’s special

       competence, the courts should give greater deference. Id. at 1318. Conversely,

       if the subject is outside the Commission’s expertise, the courts should give less

       deference. Id. In either case, courts may examine the logic of inferences drawn

       and any rule of law that may drive the result. Id. Additionally, 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

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020         Page 8 of 22
       jurisdiction and conformed to the statutory standards and legal principles

       involved in producing its decision, ruling, or order. Citizens Action Coalition, 485

       N.E.2d at 612-13.

[14]   “Ratemaking is a legislative, not a judicial function[.]” Pub. Serv. Comm’n v.

       City of Indianapolis, 131 N.E.2d 308, 312 (Ind, 1956). Agencies are executive

       branch institutions which the General Assembly has empowered with delegated

       duties. Northern Ind. Publ. Service Co., 907 N.E.2d at 1018. As such, “basic facts

       are reviewed for substantial evidence, legal propositions are reviewed for their

       correctness.” McClain, 693 N.E. 2d at 1318. Ultimate facts or “mixed

       questions” are evaluated for reasonableness, with the amount of deference

       depending on whether the issue falls within the Commission’s expertise. See id.

                                          II. Admission of Workpapers

[15]   The Consumer Parties contend that the admission of nearly 20,000 pages of

       workpapers was highly prejudicial and unfair because the documents related to

       key elements on which IPL bore the burden of proof and IPL did not introduce

       them into evidence until after the Consumer Parties had rested their case.

       Although the Commission admitted the workpapers by administrative notice,

       the Consumer Parties maintain that administrative notice was improper

       because no foundation was laid, there was no sponsoring witness, and the

       documents were not verified or self-authenticating.

[16]   Formal Commission proceedings are conducted through an adversarial process,

       in which “the Commission may be guided generally by relevant provisions of

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020       Page 9 of 22
       the Indiana Rules of Trial Procedure and the Indiana Rules of Evidence to the

       extent they are consistent with this rule,” while some features of the process

       utilize agency specific rules and practices. See 170 Admin. Code § 1-1.1-26(a).

       When IPL filed its petition with the Commission, it also prefiled its case-in-

       chief evidence consisting of the written testimony and exhibits of six witnesses.

       Pursuant to the Commission’s prehearing conference order, IPL filed “copies of

       the workpapers used to produce that evidence within two business days after

       the prefiling of the technical evidence,” with service on the Consumer Parties.

       (Appellant’s App. Vol. II, p. 111). As such, the workpapers represent “support

       for the technical evidence and calculations included in a party’s case-in-chief.”

       (Appellant’s App. Vol. II, p. 35). They provide detailed computational and

       comparable backup for the technical evidence in a proceeding and allow the

       Commission’s expert staff to review in detail the analyses that further support

       IPL’s evidence.

[17]   On the third and final day of the proceeding, after the penultimate IPL witness

       testified and both cross-examination and redirect were completed, IPL’s

       counsel orally moved the Commission to take administrative notice of the

       workpapers that had been submitted by IPL at the outset of the proceeding.

       The Consumer Parties contend that this request was untimely and made in

       violation of Indiana’s Administrative rule, which states that, “[a] request by a

       party for administrative notice of a factual matter that should be included in a

       party’s prefiled testimony shall be made at the same time the related evidence is

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020     Page 10 of 22
       prefiled.” 170 I.A.C. 1-1.1-21(j). 1 However, as workpapers merely provide

       further underlying support for the calculations and details of the factual matters

       addressed by a witness’ prefiled testimony, they do not constitute facts that are

       required to be in testimony. 2

[18]   Rather, IPL’s administrative notice request was made pursuant to 170 I.A.C. 1-

       1.1-21(h), which provides that the “Commission may take administrative

       notice, on its own motion or upon a party’s motion, of relevant administrative

       rules, commission orders, or other documents previously filed with the

       Commission.” As IPL submitted the workpapers on July 24, 2019 to the

       Commission, and served them on the Consumer Parties at the same time, they

       amount to “other documents previously filed,” of which the Commission may

       properly take administrative notice.

[19]   We disagree with the Consumer Parties that the workpapers are inadmissible as

       they were admitted without a proper foundation or a sponsoring witness, in

       violation of Indiana’s rules of evidence. While we agree that Indiana’s rules of

       evidence are applicable to the Commission’s proceedings, their application is

       limited “to the extent they are consistent with” the rules promulgated in the

       Administrative Code. See 170 I.A.C. § 1-1.1-26(a). As specific rules governing

       1
        The Commission’s procedural rules were amended and became effective June 10, 2020. Here, the
       Commission applied the rules in effect at the time of the proceeding, prior to the new rules taking effect.
       2
         Even if we find, which we do not, that the workpapers fall within the premise of 170 I.A.C. 1-1.1-21(j) and
       comport a factual matter that should be included in a party’s prefiled testimony, we conclude that IPL’s
       untimely request for administrative notice merely amounted to harmless error as the Consumer Parties had
       received notice and a copy of the workpapers three months before the hearing.

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020                                Page 11 of 22
       administrative notice before the Commission were promulgated, the

       administrative rules trump the evidentiary trial rules. Accordingly, the

       Commission appropriately took administrative notice of IPL’s workpapers

                                            III. Incremental Benefits

[20]   In Indiana, utility rates are traditionally adjusted through general ratemaking

       cases, which encompass a “comprehensive” process, requiring the 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 is representative of operating conditions that will, or

       should, prevail in future years.” United States Gypsum, Inc. v. Ind. Gas Co., 735

       N.E.2d 790, 798 (Ind. 2000). However, 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. NIPSCO Indus. Grp. v. N. Ind.

       Publ. Serv. Co., 100 N.E.3d 234, 238 (Ind. 2018). The TDSIC statute is one such

       procedure; it encourages energy utilities to replace their aging infrastructure by

       modernizing electric or gas transmission, distribution, and storage projects. Id.

       This TDSIC procedure is a process for utilities to assess a distinct charge—a

       Transmission, Distribution, and Storage System Improvement Charge—for

       completed projects deemed eligible for improvements under the Statute. Id. 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

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020       Page 12 of 22
       months as they are completed. Id. at 238-39. 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 year

       plan and approved by the Commission under section 10 of this chapter as

       eligible for TDSIC treatment.” I.C. § 8-1-39-2.

[21]   The TDSIC statute contemplates two distinct types of proceedings, only one of

       which is at the center of this dispute. Specifically, under Section 10, the utility

       may seek regulatory approval of a seven-year plan for designated improvements

       to transmission, distribution, and storage systems. See I.C. § 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.

       I.C. § 8-1-39-10(b). When determining that a plan is reasonable, the

       Commission’s order must include (1) “[a] finding if 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

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020         Page 13 of 22
       plan.” I.C. § 8-1-39-10(b). 3 It is this third determination that takes center stage

       in the Consumer Parties’ pivotal argument.

[22]   Focusing on the incremental benefits language in the determination of the

       reasonableness of the Proposed Plan, the Consumer Parties contend that IPL

       did not identify any cost-justified incremental benefits of the suggested

       improvements, but instead relied on “a risk reduction rationale, premised on

       the theory that a percentage reduction in risk, no matter how small that risk

       may be, is sufficient justification for the enormous $1.2 billion investment

       proposed.” (Appellants’ Br. p. 25). They argue that IPL’s theory significantly

       altered the analysis as the record reflects a highly reliable utility system with a

       consistent history of strong performance and a recent approval of its rate

       funding plan to target the leading cause of outages. Because IPL has

       consistently achieved a high level of reliability as compared to investor-owned

       utilities nationwide, the Consumer Parties maintain that a shift from assessing

       incremental benefits as required by statute to considering only reductions to an

       already low level of risk, does not satisfy the cost-justification of the excessive

       costs to achieve a negligible change in system performance.

       3
         The second type of proceeding—which is not disputed—is comprised in Section 9 and states that once the
       Commission has approved a seven-year plan, the utility may petition every few months for periodic rate
       adjustments to recover “eight percent (80%) of approved capital expenditures and TDSIC costs” for the
       system improvements designated as eligible and actually completed. I.C. §§ 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.” I.C. § 8-1-39-9(b).

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020                              Page 14 of 22
[23]   In essence, the Consumer Parties’ argument rests on the premise that an

       incremental benefit may only be measured by an overall increase in the current

       reliability of IPL’s system. Put differently, the Consumer Parties posit that if a

       utility’s system is 99% reliable, a TDSIC plan will satisfy the statutory

       incremental benefits requirement only if it will further elevate the overall

       system’s reliability. Under their reading, the fact a TDSIC plan will preserve

       system reliability going forward, when it would otherwise degrade, is

       immaterial. Nothing in the TDSIC statute supports the Consumer Parties’

       narrow reading of incremental benefits.

[24]   The TDSIC statute “encourages energy utilities to replace their aging

       infrastructure by modernizing electric or gas transmissions, distributions, and

       storage systems.” NIPSCO Indus. Grp. v. N. Ind. Pub. Serv. Co., 125 N.E.3d 617,

       624 (Ind. 2019). At its core, the TDSIC statute approves designated capital

       improvements to the utility’s infrastructure to replace its aging infrastructure

       and modernize its system. A proposed upgrade to the system is thus reasonable

       when “the estimated costs of the eligible improvements . . . are justified by the

       incremental benefits attributable to the plan.” I.C. § 8-1-39-10(b). Once the

       Commission identifies the incremental benefits, it must then exercise its quasi-

       legislative function and determine whether these benefits justify the estimated

       costs.

[25]   Neither ‘benefit’ nor ‘incremental’ is defined by the TDSIC statute. “When

       interpreting a statute, we presume the legislature uses undefined terms in their

       common and ordinary meaning.” NIPSCO Indus. Grp., 100 N.E.3d at 242. “If

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020         Page 15 of 22
       the legislature has not defined a word, we give the word its plain, ordinary, and

       usual meaning, consulting English language dictionaries when helpful in

       determining that meaning.” Moriarty v. Ind. Dep’t of Nat. Res., 113 N.E.3d 614,

       621 (Ind. 2019). As such, a “benefit” is defined as “something that guards,

       aids, or promotes well-being;” while “incremental” means “something that is

       gained or added.” WEBSTER’S THIRD INTERNATIONAL DICTIONARY 204, 1146

       (3rd ed. 1993).

[26]   The evidence reflects that the Proposed Plan identified seven categories of

       benefits: (1) customer experience; (2) reliability and resiliency; (3) safety; (4)

       operational efficiency; (5) risk reduction; (6) power quality; and (7)

       modernization. Some of these benefits are reduced to a quantifiable monetary

       value or monetization and each of the projects in the Proposed Plan are

       correlated with several types of associated benefits. Among others, the

       Proposed Plan indicates that the rebuilding of circuits, the largest category of

       projects in terms of estimated costs, would involve rebuilding more than 400

       miles of overhead power lines. It is uncontested that an upgrade to those lines

       would make IPL’s system safer to the public and more reliable, while also

       improving the ability to restore power promptly in the event of an outage. The

       Plan reflects that the circuit rebuilds will lead to a larger capacity for bi-

       directional flow, which will allow for more customer-owned generation solar

       panels and other alternative energy sources. Based on all these benefits—which

       is not solely risk-reduction—the Commission found the record showed a

       “sound basis” for the proposed projects and associated costs such that the

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020         Page 16 of 22
       project cost was “justified by the incremental benefits.” (Appellants’ App. Vol.

       II, pp. 29-30). The monetization analysis reflects total benefits over a twenty-

       year period of over $2 billion, compared to the total estimated cost of the

       Proposed Plan of $1.2 billion. Also monetized in the analysis is the ability of

       the new modernized grid to self-heal, without the need for human interaction,

       which accounted for a benefit of $429 million,

[27]   While the evidence indicates that “IPL’s assets are currently functioning well

       but operating at various levels of risk (with an ever increasing number of assets

       migrating into the high risk zone),” the Proposed Plan intends to “counter the

       continuing trend of more assets moving into the high risk region, which will

       lead to more frequent equipment failures, thus affecting large numbers of

       customers.” (Exh. Vol. II, p. 140).

[28]   In its Order, the Commission found that the Proposed Plan would “reduce risk

       of asset failure and maintain service reliability,” thus “provid[ing] incremental

       benefits compared to how the future would otherwise unfold.” (Appellant’s

       App. Vol. II, p. 30). The Commission specifically pointed to IPL’s

       supplemental analysis of the Proposed Plan’s benefits, which “monetized, from

       the customer experience perspective, the value of avoiding service outages

       associated with asset failure.” (Appellants’ App. Vol. II, p. 30). Based on that

       analysis, the Commission determined that the Proposed Plan “will provide a

       net benefit that exceeds the cost of the eligible improvements.” (Appellants’

       App. Vol. II, p. 30). The Commission concluded that the estimated cost of the

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020     Page 17 of 22
       Proposed Plan rested on a sound factual and analytical foundation and was

       determined to be reasonable.

[29]   Accordingly, as the Proposed Plan’s overall goal was “to replace the aging

       infrastructure by modernizing its transmission and distribution system,” IPL

       identified, besides risk reduction, several other benefits which added to the

       system’s well-being. Based on the monetization of these numerous incremental

       benefits, IPL supported its burden that “the estimated costs of the eligible

       improvements . . . are justified by the incremental benefits” gained by the

       customers. See I.C. § 8-1-39-10(b). As we find that the Commission’s

       interpretation of its statute is reasonable, we affirm the Order.

                                              IV. Specific Findings

[30]   Lastly, the Consumer Parties contend that the Commission’s Order lacks

       specific findings on all material issues raised by the parties. They maintain that

       the Order misconstrued the cost-justification requirement by adopting IPL’s

       position and addressing the “material deficiencies in IPL’s monetization

       analysis” without critical scrutiny, despite the Consumer Parties’ arguments

       indicating that the analysis greatly overstated the benefits while understating the

       costs. (Appellants’ Br. p. 51).

[31]   “[A]n Order must contain specific findings on all the factual determinations

       material to its ultimate conclusions.” N. Ind. Pub. Serv. Co, 907 N.E.2d at 1016.

       Specific findings are not required on particular arguments by the parties.

       Citizens Action Coalition of Ind., Inc. v. Indianapolis Power & Light Co., 74 N.E.3d

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020         Page 18 of 22
       554, 564-65 (Ind. Ct. App. 2017) (specific findings not required on claims that

       “one component” of rate order had “deleterious effect on energy conservation

       and energy efficiency,” or that “structure disproportionally harms” some

       consumers). Findings “need to be only specific enough to permit us to

       intelligently review the [agency] decision.” J.M. v. Review Bd. of Ind. Dep’t of

       Workforce Dev., 975 N.E.2d 1283, 1287 (Ind. 2012). “Agency findings are

       specific enough when they are given with sufficient particularity and specificity

       such that the reviewing court can adequately and competently review the

       agency’s decision.” Id. “An appeal based on an alleged lack of specific findings

       presents a mixed question of law and fact.” NIPSCO Indus. Grp., 125 N.E.3d at

       627. “In these situations, we review the Commission’s conclusions for

       reasonableness, deferring to the Commission based on the amount of expertise

       exercised by [it].” Id.

[32]   While the TDSIC statute specifies three material determinations the

       Commission must make on a proposed plan, the Consumer Parties only

       disputed the third requirement, in which the “estimated costs of the eligible

       improvements . . . are justified by [the Proposed Plan’s] incremental benefits.”

       I.C. § 8-1-39-10(b). In reviewing the Order, the Commission’s detailed findings

       and scrutiny span three pages. “Based on the evidence presented,” the

       Commission found that “the record demonstrates that the estimated cost of

       IPL’s TDSIC Plan . . . rests on a sound factual and analytical foundation and is

       reasonable,” and that IPL’s estimate was “the best estimate of the cost of the

       [Plan’s] eligible improvements.” (Appellants’ App. Vol. II, p. 29). The

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020       Page 19 of 22
       Commission’s findings on the incremental benefits are equally clear and

       evidence based: “[a]s shown in Table 3.3 of the [Proposed Plan], IPL

       monetized” the customer value “of avoiding service outages associated with

       asset failure.” (Appellants’ App. Vol. II, p, 30). IPL’s analysis—which “did

       not attempt to quantify all project benefits,” but “focused on projects that lend

       themselves to monetization”—showed the projects “provide a net benefit that

       exceeds the cost of the eligible improvements.” (Appellants’ App. Vol. II, p.

       30). The Order found that “record evidence demonstrates” that the Proposed

       Plan seeks “to reduce risk of asset failure and maintain service reliability;” that

       it “provides incremental benefits compared to how the future would otherwise

       unfold;” and that IPL has “optimized the incremental benefits” and shown “a

       sound basis for the proposed projects and associated costs.” (Appellants’ App.

       Vol. II, p. 30). Thus, the Order “determin[ed] that the estimated costs of the

       [Proposed Plan] improvements are justified by incremental benefits attributable

       to the [Proposed Plan].” (Appellants’ App. Vol. II, p. 30).

[33]   All these specific findings are prefaced by the Order’s detailed summary of

       evidence on this topic in IPL’s case-in-chief, in the Consumer Parties’

       opposition case, and in IPL’s rebuttal. See NIPSCO Indus. Grp., 125 N.E.3d at

       625 (“Despite the Industrial Group’s arguments to the contrary, the

       Commission supported its conclusion to approve the TDSIC-2 petition with

       specific findings,” prefaced “by summarizing the conflicting testimony

       presented to it [] by NIPSCO and the Industrial Group”). Accordingly, the

       Commission’s specific findings are sufficiently particular that we can

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020       Page 20 of 22
       “adequately and competently review” the Commission’s decision. J.M., 975

       N.E.2d at 1287.

[34]   We disagree with the Consumer Parties that the Commission should have

       specifically addressed each one of its concerns posed by IPL’s monetization

       analysis and risk-reduction model. The Commission’s findings credited and

       gave weight to IPL’s monetization analysis and risk-reduction model. It

       accepted IPL’s methodology of calculation of benefits and estimated costs.

       While both the Consumer Parties’ and IPL’s methodology were evidenced in

       the record with expert witnesses on both sides, the Commission rejected the

       Consumer Parties’ proposed evaluation and gave no weight to its witnesses

       Although “reasonable people may disagree” with the Commission’s findings,

       “that is immaterial to our review of the [Commission’s] decision, which

       contains sufficient findings and is supported by substantial evidence.” Citizens

       Action Coalition of Ind., Inc. v. N. Ind. Publ. Serv. Co, 76 N.E. 3d 144, 155 (Ind.

       2017).

[35]   As we noted before, specific findings are not required on particular arguments

       by parties. See Citizens Action Coalition of Ind., Inc., 74 N.E.3d at 564-65. Here,

       the Commission’s Order contained specific findings on all the factual

       determinations material to its ultimate conclusions and was prefaced by an

       extensive review of the evidence presented by the parties. Although the

       Commission did not explicitly refute each and every argument made by the

       Consumer Parties, its findings are sufficiently detailed to allow us an intelligent

       and adequate review of the Order.

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020         Page 21 of 22
                                              CONCLUSION
[36]   Based on the foregoing, we hold that the Commission properly admitted IPL’s

       workpapers by administrative notice; the Commission properly determined that

       the costs of the eligible improvements included in the Proposed Plan are

       justified by their incremental benefits; and the Commission’s findings are

       sufficiently specific to enable appellate review of its decision.

[37]   Affirmed.

[38]   May, J. and Altice, J. concur

       Court of Appeals of Indiana | Opinion 20A-EX-800 | November 4, 2020    Page 22 of 22