Duke Energy Loses Again in Indiana Ethics Case
The ethics scandal involving Scott Storms, the former general counsel of the Indiana Utility Regulatory Commission, has cost Duke Energy Corp. nearly $12 million.
The IURC originally ruled in July 2010 that Dukes Indiana subsidiary could pass more the $11.6 million in repair costs incurred during a 2009 ice storm onto its customers, despite the Indiana Office of Utility Consumer Counselor recommending against it.
But then the state learned that Duke had offered Storms an in-house counsel jobwhile he was still GC at the commission and serving as an administrative law judge overseeing hearings on Duke rate requests.
In October 2011 the IURC reversed its decision to grant the relief, and Duke appealed to the Indiana Court of Appeals. Friday the appeals court ruled against the energy company [PDF].
The state was represented by deputy attorney general David Steiner and Beth Krogel Roads, assistant GC for the IURC, as well as two attorneys from the Indiana Office of Utility Consumer Counselor, A. David Stippler and Randall Helmen.
Dukes lawyers were Jon Laramore and Jane Dall Wilson, from Faegre Baker Daniels in Indianapolis, and Melanie Price, assistant GC at Duke Energy Indiana Inc. The Indiana Energy Association, represented by Frost Brown Todd, had filed an amicus brief on behalf of Duke.
The state consumer counselor argued that the 2009 ice storm was not an extraordinary event that required granting special relief to Duke. The energy company should be expected to weather such storms in the ordinary course of business, it said.
Dukes lawyers argued that the IURC had been arbitrary and capricious in changing its mind when reviewing basically the same evidence, and had offered no reason for its reversal.
But the appeals court said the IURC had considered substantial updated evidence. Although the better practice would have been for the IURC to clearly articulate why it reached different conclusions, we find that the updated evidence . . . justified the IURCs decision to deny Duke relief, the courts opinion states.
Duke told the Associated Press it was considering appealing the courts decision.
The 20-page opinion rehashed the scandal that started this chain of events, and ended with Duke firing Storms and the company president who hired him.
Also fired was David Lott Hardy, then chairman of the IURC, who knew that Duke and Storms were negotiating while the rate hearings were ongoing and didnt ask Storms to recuse himself.
Last October the state appeals court ruled that Hardy must stand trial for helping Storms set up the new job while working on Dukes cases. The case is pending.
Storms already received his punishment. Besides the firing, the Indiana Ethics Commission in 2011 ruled that he had violated state laws.
It fined him $12,000 and barred him from future state employment. He has not returned calls seeking comment.
See also: Ex-Indiana Utility Chief to Stand Trial for Aiding GC, CorpCounsel, October 2012.