COA allows Vectren to move forward with coal-powered plants project

An Indiana energy company can proceed with its plans to bring two of its coal-powered plants into compliance with federal emissions standards after the Indiana Court of Appeals rejected an appeal to force the company to build natural gas plants instead.

After receiving a notice of violation from the U.S. Environmental Protection Agency regarding emissions from three of its coal-powered generators in 2013, Vectren Energy Delivery of Indiana Inc. reached a settlement in principle with EPA to resolve the alleged violations and also became subject to new federal mandates regarding mercury emissions standards.  

As a result of those compliance issues, Vectren filed a petition with the Indiana Utility Regulatory Commission in January 2014 for approval of modifications to four of its coal-powered facilities. Citizens Action Coalition of Indiana Inc., Sierra Club Inc. and Valley Watch Inc. intervened and opposed the petition in April 2014, arguing that Vectren should replace all or some of the four units with new electricity-generating sources as a cost-saving measure for customers.

The IURC ultimately approved Vectren’s petition in January 2015, but the intervenors appealed to the Indiana Court of Appeals. In its October 2015 opinion, the appellate court ordered that two of Vectren’s proposed projects be issued a certificate of public convenience and necessity, but sent the case back to the IURC to consider the other two projects, which dealt with soda ash and lime injection systems, based on Indiana Code 8-1-8.7-3(b).

On remand, the IURC rejected the intervenor’s petition to reopen the evidentiary record and found that under I.C. 8-1-8.7-3(b), the other two projects should be granted certificates of public convenience and necessity.

In their second appeal before the appellate court, the intervenors argued that the IURC’s findings on remand were not adequately explained, were arbitrary and capricious, and were not supported by substantial evidence because the commission only considered Vectren’s pre-filed direct testimony. Had the IURC considered other testimony, it would have learned that the long-term cost of installing pollution controls on the existing coal-powered units would be more than the cost of building new natural gas plants, they said.

But Judge Robert Altice, writing Tuesday for the unanimous panel, noted that the IURC’s first order granting all four projects remained intact even after the court’s decision to remand after the first appeal. The commission was merely instructed to consider the other two projects under a different section of Indiana Code, which it did, Altice said.

“Moreover, the cost analysis was not the sole basis of the IURC’s decision to issue the CPCN to Vectren,” Altice wrote. “The IURC issued specific findings on all nine statutory factors as set out above, many of which had nothing to do with the cost analysis.”

Further, the commission was not required to reopen the evidence and re-litigate the case on remand, especially considering the fact that there was ample evidence in the existing record for evaluation on remand, the judge wrote.

The case is Citizens Action Coalition of Indiana, Inc., Sierra Club, Inc., Valley Watch, Inc. v. Southern Indiana Gas and Electricity Company d/b/a Vectren Energy Delivery of Indiana, Inc., Indiana Office of Utility Consumer Counselor, 93A02-1607-EX-1637.