COA rules on public utility issues

The Indiana Court of Appeals affirmed in part and reversed in part the decision by the Indiana Utility Regulatory Commission finding United States Steel Corp. acted as a public utility when it delivered electricity and natural gas to another steel producer in northwestern Indiana.

U.S. Steel and ArcelorMittal had an arrangement in which U.S. Steel would provide the electricity and natural gas to the Plate Mill located within the steel-making operation of U.S. Steel. The two companies swapped facilities within their respective industrial complexes, so ArcelorMittal began operating this mill. Electricity would originally come from Northern Indiana Public Service Company; U.S. Steel arranged with NIPSCO to transport natural gas from other producers to the mill, which was paid for by ArcelorMittal.

The steel producers filed an informal complaint, and later a formal complaint, with the IURC Consumer Affairs Division, seeking a determination that their actions didn’t violate any tariff, contract, or other utility law. NIPSCO filed a formal complaint that U.S. Steel had violated Indiana law and NIPSCO’s tariffs by selling electricity and gas service.

A final order of the IURC determined that U.S. Steel’s provision of electricity and transportation of natural gas to ArcelorMittal made U.S. Steel a public utility as defined by statute. Both U.S. Steel and ArcelorMittal, as well as NIPSCO, appealed the order.

In United States Steel Corp., et al. v. Northern Indiana Public Service Co., No. 93A02-1006-EX-632, the appellate court determined the regulatory commission erred in determining that U.S. Steel’s delivery of electricity to ArcelorMittal made it a public utility under Indiana Code 8-1-2-1(a). The delivery of electricity for use at the mill did not amount to service directly or indirectly to the public. U.S. Steel provided electricity to only one customer located within its industrial complex pursuant to a special agreement, wrote Judge Paul Mathias. The commission also erred in concluding U.S. Steel had violated Indiana’s Service Area Assignments Act by selling electricity to ArcelorMittal within NIPSCO’s exclusive electric service area because U.S. Steel isn’t a public utility so it is not an electricity supplier.

The judges affirmed the commission on the issue of whether U.S. Steel acted as a public utility regarding the delivery of natural gas to ArcelorMittal at the mill. U.S. Steels activities fell under subsection 2 of I.C. 8-1-2-87.5(b), which says that anyone “engaged in the transportation of gas solely within this state on behalf of any end use consumer or consumers” is a public utility. As such, U.S. Steel’s resale of natural gas purchased from NIPSCO to ArcelorMittal violated NIPSCO’s tariff ban on resale.

The appellate court also affirmed the dismissal of the steel producers’ complaint against NIPSCO and held that the regulatory commission wasn’t required to address NIPSCO’s additional claims, which it chose not to do. They remanded for the commission to vacate the portions of its order regarding U.S. Steel being a public utility in the distribution of electricity.