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Wednesday, October 06, 2010

Ind. Gov't. - "Daniels fires chairman of utility regulatory agency"

The Louisville Courier Journal's Lesley Stedman Weidenbener has this coverage today on the IURC firing - the lengthy story begins:

INDIANAPOLIS – Citing ethics problems at the agency, Gov. Mitch Daniels fired the chairman of the Indiana Utility Regulatory Commission on Tuesday and ordered the commission to review some of its decisions involving Duke Energy.

An internal investigation shows that David Lott Hardy, who has chaired the utility commission since 2005, knew that its chief administrative law judge was presiding over a Duke Energy case at the same time that the judge was talking to the company about a job, the governor’s office said.

But Hardy did not remove the official from the case, a controversial proceeding about construction of a coal gasification power plant in Edwardsport, said David Pippen, the governor’s general counsel, in a letter explaining the issue to other state agency heads. * * *

Citizens Action Coalition Executive Director Grant Smith said he’s not surprised by the governor’s finding. Smith also said problems at the utility agency are larger than issues with the former administrative law judge, Scott Storms, who now works in Duke’s legal department.

“From the beginning, we didn’t think this power plant should be built and now it appears to us to be a quid pro quo from the standpoint that Storms had significant influence at the commission,” Smith said. “We believe the original order to approve the plant should be vacated and money returned to the ratepayers.”

The governor’s office said Tuesday that all Duke opinions over which Storms presided “will be reopened and reviewed to ensure no undue influence was exerted in the decisions.”

It was not clear Tuesday which decisions that would include. IURC spokeswoman Danielle McGrath did not return a message seeking comment.

Daniels’ action came just weeks after the coalition first raised questions about Duke’s hiring of Storms, which was considered and approved by the Indiana Ethics Commission.

Since then, Duke has put Storms and Michael Reed, president of Duke Energy-Indiana, on administrative leave as company officials investigate the issues as well. The company has hired an outside attorney to conduct that review, said company spokeswoman Angeline Protegere.

Jeff Swiatek and Tim Evans report today in the Indianapolis Star under the heading "Ethics controversy erupts as governor fires IURC chair." Some quotes from far into their long story:
Duke's most pressing regulatory filings in recent years involve its $2.9 billion coal gasification plant under construction in Edwardsport in Southern Indiana. Storms was integrally involved at the IURC in regulatory matters involving the plant and Duke's wish to bill ratepayers for its construction costs before the plant opens as the first in the nation to use a new cleaner-burning technology to generate electricity from coal. [ILB: for background, see this ILB entry from Oct., 4, and its link to CWIP entry.]

"We'd like to see the Edwardsport case reopened and re-evaluated for misconduct," Olson said. "We feel the commission ignored evidence and essentially has given a blank check to Duke" to forge ahead with its construction despite cost overruns, he said.

Julia Vaughn, policy director for another government watchdog group, Common Cause/Indiana, questioned whether Inspector General Dave Thomas -- being an appointee of the governor -- is in a good position to lead a probe into other appointees of the governor.

Instead, the investigation of the IURC should be handled by the U.S. attorney's office, she said. "That way, people can be assured a really independent investigation is done."

Vaughn said the matter involving Storms and Hardy "raises a lot of serious questions about decision-making" at IURC and also casts a cloud over the state ethics commission, which approved Storms' move to Duke without the mandated "cooling-off" period that bans high-level government officials from taking a job with a company they regulate for one year after leaving their state job.

"It raises questions about their ability to make decisions," she said of the ethics commission. "If you read the transcript (of meetings where Storms' case was discussed), they didn't come off as being very professional or very concerned."

The commission decided that Storms didn't have to abide by the one-year ban because he didn't hold a decision-making job at the IURC.

In his Tuesday memo to agency heads, Daniels' general counsel countered that ethics commission finding, saying that from now on, "administrative law judges who preside over information-gathering and order drafting" come under the one-year ban on working for companies they help regulate.

Posted by Marcia Oddi on October 6, 2010 09:01 AM
Posted to Indiana Government