Vectren Loses Indiana Appeal

The Indiana Court of Appeals on October 29 struck down (Case No. 93A02-1502-EX-110) approval of Vectren’s plan to spend roughly $90 million in ratepayer money on its aging A.B. Brown and F.B. Culley coal-fired power plants outside Evansville, Indiana. The court found that the Indiana Utility Regulatory Commission (IURC) violated the law by failing to determine whether Vectren met all legal requirements before approving Vectren’s use of the new generation equipment.

Now, the case goes back to the IURC to decide whether Vectren Energy Delivery of Indiana should be allowed to pass on to its ratepayers the cost of projects to modify the plants to meet new EPA standards.

In addition to the Indiana Office of Utility Consumer Counselor (OUCC), the original IURC decision had been challenged in court by several environmental appellants/interveners – among them, Earthjustice, Citizens Action Coalition of Indiana, Sierra Club, and Valley Watch. The appellants argued that retiring some or all of Vectren’s current coal-powered generators and replacing them with new natural gas-powered generators was a more cost-effective plan than Vectren’s proposal to install emission controls on its current generators. Ultimately, the OUCC ceased its opposition to Vectren’s proposal prior to the commission’s decision.

“Vectren’s policy is to build first, and ask for legal permission later,” said Earthjustice’s lead counsel on the case, Matthew Gerhart. “The Court firmly rejected that policy and held that Vectren should have received all necessary approvals before starting $90 million in projects for which it will ask ratepayers to foot the bill.”

“Vectren should seize this opportunity to begin to make the right choices for their ratepayers, the economy of southwest Indiana and our environment,” said Kerwin Olson, executive director of Citizens Action Coalition. “Instead of wasting ratepayer dollars on Brown and Culley, Vectren should immediately begin investing in low-cost Indiana wind and solar energy, and ramp-up budgets for energy efficiency programs. Over the long term, those investments collectively will bring much needed bill relief to consumers and create local jobs that can’t be outsourced.”

According to Earthjustice, evidence in the case showed that Vectren ignored its own analysis that cheaper alternatives are available. Indeed, the environmental advocates said, Vectren’s own analysis showed that ratepayers would save $125 million over 20 years if Vectren had invested in natural gas generation rather than dumping more money into its aging plants.

The appellants also noted, “Vectren customers have the highest utility bills in the State of Indiana, paying more than $150 a month for the average home using 1,000 kilowatt hours (kWh) of electricity. Vectren’s high electricity costs are placing a crushing burden on low-income families in our community, and forcing hard choices on the most vulnerable amongst us.

“In Evansville,” they added, “46 percent of working families are struggling to cover their monthly expenses, according to the United Way’s ALICE study [on financial hardship]. The proposal to spend $90 million on its aging coal fleet would only force Vectren customers in the Evansville area to pay even more on their electricity bills.”

In its ruling, the court found that, “Vectren cannot singlehandedly prevent appellants’ ability to pursue an appeal by building the environmental controls at issue while the appeal is pending and then claim[ing] that the appeal is moot because they have already built those controls.”

Finally, the court remanded the case to the IURC, with instructions that the commission make the required findings under Chapter 8.7, Indiana Code (Assessment of Industrial Facilities