FOR PUBLICATION

ATTORNEYS FOR APPELLANTS:              ATTORNEYS FOR APPELLEES:

NORMAN T. FUNK                         A. DAVID STIPPLER
LIBBY GOODKNIGHT                       RANDALL C. HELMEN
Krieg DeVault, LLP                     Indiana Office of Utility Consumer Counselor
Indianapolis, Indiana                  Indianapolis, Indiana

ROBERT E. HEIDORN                      LARRY J. WALLACE
JOSHUA A. CLAYBOURN                    JAMES A. L. BUDDENBAUM
Vectren Corporation                    TRAVIS W. MONTGOMERY
Evansville, Indiana                    Parr Richey Obremskey Frandsen & Patterson
                                       Indianapolis, Indiana
CLAYTON C. MILLER
Bamberger Foreman Oswald & Hahn, LLP   KARL L. MULVANEY
Indianapolis, Indiana                  MICHAEL R. LIMRICK
                                       DAVID T. McGIMPSEY
JEROME POLK                            Bingham Greenebaum Doll, LLP
Polk & Associates, LLP                 Indianapolis, Indiana
Indianapolis, Indiana
                                       MARK W. COOPER                     FILED
                                                                      Oct 30 2012, 8:55 am
TODD A. RICHARDSON                     Indianapolis, Indiana
JOSEPH P. ROMPALA
Lewis & Kappes, P.C.                   JEFFERSON A. LINDSEY                    CLERK
                                                                             of the supreme court,
                                                                             court of appeals and
Indianapolis, Indiana                  Rockport, Indiana                            tax court




                             IN THE
                   COURT OF APPEALS OF INDIANA

INDIANA GAS COMPANY, INC. and          )
SOUTHERN INDIANA GAS AND               )
ELECTRIC COMPANY, et al.,              )
                                       )
      Appellants-Respondents,          )
                                       )
             vs.                       )      No. 93A02-1112-EX-1141
                                       )
INDIANA FINANCE AUTHORITY and          )
INDIANA GASIFICATION, LLC,             )
                                       )
      Appellees-Petitioners.           )
         APPEAL FROM THE INDIANA UTILITY REGULATORY COMMISSION
                    The Honorable James D. Atterholt, Chairman
                                Cause No. 43976


                                        October 30, 2012

                               OPINION - FOR PUBLICATION

RILEY, Judge


                                STATEMENT OF THE CASE

       Appellants-Respondents, Indiana Gas Company, Inc. and Southern Indiana Gas

and Electric Company, both d/b/a Vectren Energy Delivery of Indiana, Inc. (collectively,

Vectren); Ohio Valley Gas Corporation; Ohio Valley Gas, Inc.; Sycamore Gas Company;

Arcelor Millal USA; Haynes International, Inc.; Rochester Metal Products Corporation;

Vertellus Specialties, Inc.; Countrymark Refining & Logistics, LLC; Corn Products

International, Inc.; Citizens Action Coalition; Spencer County Citizens for Quality of

Life; Valley Watch, Inc., and the Sierra Club appeal the Indiana Utility Regulatory

Commission’s (the Commission) judgment in favor of Appellees-Petitioners, the Indiana

Finance Authority (IFA); Indiana Gasification, LLC (IG); Lincolnland Economic

Development Corp. (Lincolnland), and the Indiana Office of Utility Consumer Counselor

(OUCC) with respect to the Commission’s approval of a Substitute Natural Gas Purchase

and Sale Agreement (Contract) between the IFA and IG.1


1
 Citizens Gas & Coke Utility; Citizens Gas of Westfield; Community Natural Gas Company, Inc.;
Midwest Natural Gas Corporation; Indiana Natural Gas Corporation; Eli Lilly & Company; United States
                                                  2
       We reverse.

                                              ISSUES

       Arcelor Millal USA; Haynes International, Inc.; Rochester Metal Products

Corporation; Vertellus Specialties, Inc.; Countrymark Refining & Logistics, LLC; and

Corn Products International, Inc. (collectively, the Industrial Group)2 raise two issues on

appeal, which we consolidate and restate as the following single issue: Whether the

Commission erred in approving the Contract when the Contract defined “retail end use

customer” in a manner contrary to the statutory definition of the same term.

       Vectren; Ohio Valley Gas Corporation; Ohio Valley Gas, Inc.; and Sycamore Gas

Company (collectively, the Utilities); and Citizens Action Coalition of Indiana, Inc.;

Spencer County Citizens for Quality of Life; Valley Watch, Inc.; and the Sierra Club

(collectively, the Citizens Groups) raise two additional issues on appeal, which we

consolidate and restate as the following single issue: Whether the Commission exceeded

its jurisdiction when it approved the Contract.

       As a separate issue, the IFA, IG, and Lincolnland present us with the following

issue, which we restate: Whether the Utilities and the Industrial Group have standing to

appeal the Commission’s approval of the Contract.

                          FACTS AND PROCEDURAL HISTORY

Steel Corporation; Northern Indiana Public Service Company; Kokomo Gas & Fuel Company; and
Northern Indiana Fuel & Light Company, Inc. have also been parties to these proceedings. However,
they have not filed separate briefs on appeal.
2
 Eli Lilly & Company and the United States Steel Corporation were members of the Industrial Group
during the Commission proceedings, but are not members of the group on appeal.

                                                  3
       Substitute natural gas (SNG) is a pipeline quality gas produced from coal through

a manufacturing process called coal gasification. It serves as an alternative to natural gas

and is used to fuel gas appliances in many Indiana homes and businesses. In 2009, the

Indiana General Assembly expressed approval of SNG production in Public Law 2-2009,

which has since been codified as the Substitute Natural Gas Act (the SNG Act) in Ind.

Code § 4-4-11.6. In the SNG Act, the General Assembly included its findings that:

“[t]he furnishing of reliable supplies of reasonably priced natural gas for sales to retail

customers is essential for the well being of the people of Indiana;” and “[o]btaining low

cost financing for the construction of new coal gasification facilities is necessary to allow

retail end use customers to enjoy the benefits of a reliable, reasonably priced, and long

term energy supply.” I.C. § 4-4-11.6-12. In accordance with these findings, the SNG

Act outlines procedures governing the production, purchase, and sale of SNG.               It

authorizes the IFA to enter into contracts for the purchase, transportation, and delivery of

SNG, and allows the IFA to establish rates and charges to retail end use customers for the

SNG.

       On March 26, 2009, two days after the Governor signed Public Law 2-2009, the

IFA issued a request for proposals (RFP) in which it solicited coal gasification project

proposals from suppliers of SNG. IG sent its response to the RFP on April 9, 2009 and

was the only entity that responded. Leucadia National Corporation (Leucadia), a New

York-based developer in the coal gasification business, incorporated IG as a limited


                                             4
liability, special purpose entity for the sole purpose of developing a coal gasification

facility (the Plant) near Rockport, Indiana.

         IG’s proposed plan was to build, own, and operate the Plant, which it estimated

would cost $2.7 billion to develop. IG expected to receive $800 million of the amount

needed, which was equivalent to 30% of the total estimated cost, in the form of private

capital from Leucadia. IG also expected to receive a federal loan guarantee from the

United States Department of Energy (DOE) for the remaining $1.875 billion. Depending

upon its financing, legal proceedings, and environmental permitting requirements, IG

planned to commence construction of the Plant in the third quarter of 2012 and to begin

delivering SNG in the first quarter of 2016.

         On January 14, 2011, the IFA and IG executed the Contract, which details the sale

and purchase of the SNG that IG plans to produce at the Plant. The Contract provides

that the IFA will buy up to a fixed annual amount of 38 million MMBTUs3 of SNG from

IG for a period of 30 years, to be measured from the day SNG production at the Plant

begins. In exchange, the IFA will pay IG a base amount, adjusted to account for new

taxes, changes in governmental requirements, net incremental revenues, and net CO2

revenues. The base amount will be calculated by adding: (1) the sum of a fixed capital

cost of $3.50 per MMBTU; (2) certain operation and maintenance expenses; (3) the

actual cost of fuel used by IG, adjusted for various factors; and (4) the cost of

transporting the SNG to the IFA.

3
    An MMBTU is the equivalent of one dekatherm (dth).

                                                  5
       The Contract also specifies that once the IFA has bought the SNG from IG, it will

sell the SNG on the open natural gas market for either a profit or loss, which will then be

passed along to the ratepayers of Indiana regulated gas utilities who are classified by I.C.

§ 4-4-11.6-10 as “retail end use customers.” If the price of the SNG exceeds the market

price of natural gas, the IFA will sell the SNG at a loss and will pass 100% of the

difference to the retail end use customers in the form of charges on their monthly gas

bills. If the price of SNG is lower than the market price of natural gas, IG and the retail

end use customers will each receive 50% of the profits.

       In order to mitigate the charges to the retail end use customers, IG specified in the

Contract that it will set up a $150 million “Consumer Protection Reserve Account.”

When the IFA sells SNG at a loss, it will first take the difference from this Reserve

Account rather than pass along the cost to the retail end use customers. The IFA will

only pass along charges to the retail end use customers once the Reserve has been

depleted. Likewise, when the IFA sells the SNG for a profit, it will replenish the Reserve

before it passes along any net savings to retail end use customers.

       As required by I.C. § 4-4-11.6-7, which specifies that a contract for the purchase

of SNG must provide a guarantee of savings for retail end use customers, IG guarantees

$100 million of savings to retail end use customers, measured in 2008 dollars. Under the

Contract, there are three ways in which retail end use customers may realize these

savings other than through the sale of the SNG on the natural gas market. First, if

customers have not realized the savings by the end of the 30-year term, IG may cover the

                                             6
shortfall in cash. Second, the IFA may extend the Contract by up to an additional twenty

years. During this extension, the IFA may purchase the SNG from IG at lower prices in

the hopes of making up the shortfall. Third, the IFA may force a sale of the Plant in

order to make up for the difference. If it appears in year twenty-five of the Contract that

the Plant will not be worth $100 million at the end of the thirty years, the IFA may

receive a reduction in the price of SNG beginning in year twenty-six.

        On December 16, 2010, the IFA and IG filed a joint petition with the Commission

seeking approval of the Contract and requesting that the Commission order Indiana

regulated gas utilities to enter into utility management agreements (UMAs) with the IFA

so that the IFA could pass proceeds and costs to retail end use customers through the

utilities, if necessary.    Pursuant to I.C. § 8-1-1.1-4.1 and the SNG Act, the OUCC

appeared as a party in this proceeding on behalf of ratepayers, consumers, and the

public.4    On January 3, 2011, Vectren filed a petition to become either a named

respondent or an intervenor in the proceedings. On January 24, 2011, the Commission

entered a docket entry naming Vectren as a respondent. That same day, the IFA and IG

filed an amended petition identifying all of the Indiana regulated gas utilities as

respondents.

        On January 26, 2011, Lincolnland and the Industrial Group, then comprised of

Arcelor Mittal USA, Eli Lilly & Company, and the United States Steel Corporation, filed

petitions to intervene. On January 27, 2011, Citizens Gas & Coke Utility, Citizens Gas
4
  Pursuant to the SNG Act, the IFA is required to consult with the OUCC before negotiating or entering
into a purchase contract for SNG.

                                                   7
of Westfield, and six regulated local distribution companies5—Community Natural Gas

Company, Inc.; Midwest Natural Gas Corporation; Indiana Natural Gas Corporation;

Ohio Valley Gas Corporation; Ohio Valley Gas, Inc.; and Sycamore Gas Company (the

Six LDCs)—appeared in the matter. On February 2, 2011, the Citizens Groups filed a

joint petition to intervene. On February 10, 2011, by a docket entry, the Commission

granted Lincolnland and the Industrial Group’s petitions to intervene.                         Finally, on

February 17, 2011, the Commission granted the Citizens Groups’ joint petition to

intervene.

        On April 18, 20, and 25, 2011, the Commission held public field hearings

throughout the state in order to solicit public comments on the Contract and the proposed

Plant. Subsequently, the Commission received written testimony and exhibits submitted

by the parties, and then on May 2, 4, 5, 6, 12, and 13, 2011, the Commission held an

evidentiary hearing at which it heard live testimony.

        Two of the most significant disputes between the parties at the hearing were

whether the Contract provides a guarantee of savings for retail end use customers and

whether the Contract definition of “retail end use customer” conflicts with its statutory

definition. Vectren presented evidence that, during the 30-year term, the cost of the

Contract to Indiana’s retail end use customers might total between 1.7 and 4 billion

dollars, as measured in 2008 dollars. The IFA and IG, in turn, claimed that the Contract



5
  Local distribution companies (LDCs) are local gas utilities that serve the public pursuant to public utility
laws and that are under the regulation of the Commission. “LDCs” and “gas utilities” are synonymous.

                                                      8
will likely provide savings of $500 million and is guaranteed to provide savings of at

least $100 million.

       On November 22, 2011, following the hearing, the Commission approved the

Contract. In its order, the Commission did not address the scope of the term “retail end

use customer,” but instead suggested that the issue could be discussed in non-adjudicative

“technical conferences,” whereby the parties could resolve how the gas utilities should

collect funds from retail end use customers. Alternatively, the Commission found that

the IFA could file a separately docketed proceeding to address the issue in the event that

the parties could not reach an agreement on the definition of “retail end use customer.”

       On December 12, 2011, the Industrial Group filed a petition for reconsideration,

asking the Commission to find that industrial transportation customers were exempt from

being classified as retail end use customers under the statute and, therefore, did not have

to pay the pass-through costs of the SNG under the Contract. On December 21, 2011,

Vectren filed a notice of appeal, and the next day the Industrial Group, Citizens Groups,

and three members of the Six LDCs—the three members that, along with Vectren,

constitute “the Utilities”—filed their own notices of appeal. The parties subsequently

filed a complex series of motions, the end result of which was that the Commission again

declined to make a finding on the definition of “retail end use customer.” Instead, the

Commission reiterated that it would address disputes over the term in a “separately

docketed proceeding,” should such a proceeding be filed, but that the issue was not ripe



                                             9
for consideration until that time. On March 22, 2012, Vectren filed an amended notice of

appeal to include the Commission’s order.

        The Utilities, the Citizens Groups, and the Industrial Group now appeal.

Additional facts will be provided as necessary.

                                 DISCUSSION AND DECISION

                                          JUSTICIABILITY

        Because the IFA, IG, and Lincolnland present us with a threshold procedural

matter in their appellee’s brief, we will first address whether the Industrial Group and the

Utilities’ claims are justiciable. The IFA, IG and Lincolnland argue that they are not

because 1) the issues are not ripe; 2) the Industrial Group and the Utilities do not have

standing because they have not proven that they will suffer adverse effects as a result of

the Contract; and 3) the Industrial Group is not an entity that has a right to appeal because

it is “an ad hoc collection of industrial transportation customers whose ‘membership’ has

changed over the course of these proceedings.” (Appellee’s Br. p. 23).6 We will address

each of these issues separately.

                                             A. Ripeness

        The basic rationale behind our ripeness doctrine is “to prevent the courts, through

avoidance of premature adjudication, from entangling themselves in abstract

disagreements over administrative policies, and also to protect the agencies from judicial


6
 While the OUCC is also an Appellee, it filed a separate brief, which we will hereafter designate as “the
OUCC’s Br.”

                                                    10
interference until an administrative decision has been formalized and its effects felt in a

concrete way by the challenging parties.” Ohio Forestry Ass’n, Inc. v. Sierra Club, 523

U.S. 726, 732-33 (1998). A claim is not ripe for adjudication if it rests upon “contingent

future events that may not occur as anticipated, or indeed may not occur at all.” Texas v.

U.S., 523 U.S. 296, 300 (1998). In addition to preventing this court from prematurely

entangling itself in an abstract agreement, “there is also a ‘usually unspoken’ underlying

rationale [for ripeness] relating to the doctrine of mootness: a claim may be unripe where

‘if we do not decide [the claim] now, we may never need to.’” Alcoa Power Generating,

Inc. v. Fed. Energy Reg. Comm’n, 643 F.3d 963, 967 (D.C. Cir. 2011) (quoting Devia v.

Nuclear Reg. Comm’n, 492 F.3d 421, 424 (D.C. Cir. 2007)).

       When reviewing a ripeness challenge, we consider the fitness of the issues for

judicial decision and the hardship caused to the parties by withholding court

consideration. Hardy v. Hardy, 963 N.E.2d 470, 474 n.3 (Ind. 2012). With respect to the

“fitness” prong of this standard, we may consider whether the issue is purely legal,

whether consideration of the issue would benefit from a more concrete setting, and

whether the agency’s action is sufficiently final. Alcoa Power Generating, Inc., 643 F.3d

at 967. With respect to the “hardship” prong, we will find there to be hardship when a

delay would cause an immediate and significant change in a party’s conduct of its affairs

with serious penalties attached for noncompliance. Suitum v. Tahoe Reg’l Planning

Agency, 520 U.S. 725, 743 (1997).

                                 1. The Industrial Group

                                            11
       The Industrial Group is a group of industrial transportation customers who

purchase natural gas in the competitive interstate market and rely on gas utilities only for

local transportation services.     The Group claims that the Contract will subject

transportation customers to charges under the UMAs, whereas the Legislature did not

intend to include transportation customers within the definition of “retail end use

customers” who may be charged pursuant to the SNG Act. The Contract specifies that

the term “retail end use customer” has the meaning “set forth in [I.C. §] 4-4-11.6-10;

provided that, for the absence of doubt, ‘retail end use customer’ means all Indiana

customers of each applicable local gas distribution company except for industrial

transport customers with an annual volume level of 50,000 dekatherms or greater.”

(Industrial Group’s App. p. 384). In contrast, section 4-4-11.6-10 of the SNG Act defines

“retail end use customer” as

       a customer who acquires energy at retail for the customer’s own
       consumption:
             (1) from a gas utility that must apply to the [C]omission under [I.C.
             §] 8-1-2-42 for approval of gas cost changes; or
             (2) under a program approved by the [C]omission through which the
             customer purchases gas that would be subject to price adjustments
             under [I.C. §] 8-1-2-42 if the gas were sold by a gas utility.

I.C. § 4-4-11.6-10. The Industrial Group points to the difference between these two

definitions as evidence that the Commission exceeded its jurisdiction in approving the

Contract because the Contract will allow the IFA to pass-through charges to

transportation customers with an annual volume of less than 50,000 dekatherms.



                                            12
       Addressing the fitness component of a ripeness claim, we first focus on the

legality and the “concrete” setting of the particular issue brought before us. With respect

to the legality of the issue, we note that questions of statutory interpretation fall within

the exclusive province of the judiciary and are the responsibility of the court. MicroVote

General Corp. v. Ind. Election Comm’n, 924 N.E.2d 184, 201 (Ind. Ct. App. 2010).

Because we must interpret the SNG Act to review whether the Contract’s definition

conforms with the Legislature’s intent, the question before us is purely legal. Further,

because the issue is not dependent on factual circumstances, our determination will not

benefit from a “more concrete setting.” See Alcoa Power Generating Inc., 643 F.3d at

967. The IFA, IG and Lincolnland argue that there are still factual contingencies because

the future negotiation of the UMAs will clarify the issue.        However, the Industrial

Group’s claim is not that the terms of the UMAs will cause transportation customers to

receive excessive charges; rather, the Group’s argument is that transportation customers

should not be subject to the UMAs at all. Awaiting the clarification of the terms of the

future UMAs will therefore not benefit our analysis.

       It would only benefit us to delay our review if the establishment of the UMAs in

general were speculative. This is because the issue of whether the Industrial Group is

subject to the UMAs would become irrelevant if the IFA were to decide not to establish

any UMAs at all.      However, it is clear under the terms of the Contract that the

establishment of the UMAs is inevitable.

       Article XIV of the Contract provides:

                                            13
        [The IFA] covenants and agrees that [the IFA] will not take or permit any
        action or fail to take or permit any action that would . . . otherwise limit,
        alter, or impair the ability of [the IFA] to satisfy its contractual obligations
        hereunder, including the establishment and collection of the price of SNG
        from retail end use customers, in each case, until this [Contract] has been
        terminated. [The IFA] further acknowledges and agrees that any action,
        omission, or failure to act by the State or any agency thereof to cause [the
        IFA] not to establish a sufficient revenue requirement, or not to collect rates
        or to pay [IG] in each case would constitute a breach of this [Contract].

(Industrial Group’s App. p. 359). Pursuant to this provision, the IFA may not fail to take

any action that would limit its ability to collect the price of SNG from retail end use

customers without breaching the Contract. Thus, we conclude that the establishment of

the UMAs is unavoidable.

        Turning to the hardship prong of the ripeness challenge, we note a split in the

federal circuits concerning whether the “fitness” and “hardship” test constitutes a two-

part test or two independent bases for ripeness.7 This is an issue of first impression in

Indiana.

        We decline to go so far as to declare that a petitioner need not satisfy the hardship

prong of the test. Instead, we choose to follow the majority of circuits who hold that both

prongs of the test must be satisfied at least to a minimal degree. This approach balances

the concerns of the court in judicial economy and the concerns of the parties in avoiding

hardship or undue litigation. As in some circuits, we interpret this test as a “sliding

scale” in which “a very powerful exhibition of immediate hardship might compensate for


7
 For more information and a list of cases in favor of either alternative, see South Dakota v. Mineta, 278
F.Supp. 1025, 1028 (D.S.D. 2003).

                                                    14
questionable fitness, [] or vice versa.” Ernst & Young v. Depositors Economic Protection

Corp., 45 F.3d 530, 535 (1st Cir. 1995).

       Hardship can be established where a delay would cause an immediate and

significant change in a party’s conduct of its affairs with serious penalties attached to

noncompliance.      Suitum, 520 U.S. at 743.      [Al]though the hallmark of cognizable

hardship is usually direct and immediate harm, other kinds of injuries may occasionally

suffice.” Ernst & Young, 45 F.3d at 536. If the operation of a challenged statute is

inevitable, ripeness is not defeated by the existence of a time delay before the statute

takes effect. Id.

       Here, the Industrial Group will suffer direct harm if it is subject to pass-through

charges and we deem that those charges are unauthorized under the SNG Act. However,

it is questionable whether this impact will be “immediate” because charges will first be

paid out of the $150 million Consumer Protection Reserve Account. Nevertheless, we

conclude that the Industrial Group’s claim is ripe for our review. The First Circuit Court

of Appeals has held that ripeness is not defeated by the existence of a time delay when

the operation of a statute is inevitable, and we conclude that the same principle holds

when the operation of a contract is inevitable and there are no contingent factual issues.

See id. This interpretation is in harmony with our determination that “fitness” and

“hardship” should operate on a sliding scale. As there is great evidence of “fitness” in

the instant case and at least minimal evidence of hardship, we balance any remaining

question of hardship in favor of ripeness.

                                             15
                                       2. The Utilities

       Turning to the Utilities, we note that their challenge to the Commission’s

jurisdiction has two components. First, they assert that the Contract is not final, which is

a prerequisite for Commission review under I.C. § 4-4-11.6-13, and second, they argue

that the Contract does not satisfy the SNG Act’s requirement that any SNG purchase

contract must provide guaranteed savings for retail end use customers. See I.C. § 4-4-

11.6-7. The IFA, IG, and Lincolnland do not address ripeness within the context of the

Utilities’ contract claim, but argue that the Utilities’ guaranteed savings claim is “a UMA

issue, not an SNG Contract issue.” (Appellee’s Br. p. 23).

       In regards to the finality of the Contract, we have held that the interpretation of a

contract is a legal issue. Battershell v. Prestwick Sales, Inc., 585 N.E.2d 1, 4-5 (Ind. Ct.

App. 1992), trans. denied. It is also significant that the interpretation of the finality of the

Contract here is not dependent on any contingent factual issues and will not be more

“concrete” at a later date if we delay our review. Accordingly, we conclude that the issue

is judicially fit for review.

       Hardship is somewhat more difficult to establish as none of the parties have

addressed the issue of ripeness within the context of the Utilities’ contract claim.

However, it is clear here that the Contract is integral to the construction of the 2.7 billion

dollar Plant, IG’s attainment of a federal loan guarantee from the DOE, and the IFA’s

negotiation of the underlying UMAs. A delay in reviewing the finality of the Contract

would possibly have enormous repercussions.            Although most Circuit courts have

                                              16
recognized that the burden of participating in further administrative hearings and judicial

proceedings does not constitute sufficient hardship, some courts have nevertheless

acknowledged an exception where delaying resolution would inhibit or delay investment.

In Alcoa Power Generating, Inc., the District of Columbia Circuit Court of Appeals

analyzed the Federal Regulation and Development of Power Act and found that because

the statute set the hydroelectric project license term at not less than 30 nor more than 50

years, Congress had recognized that significant capital investments in hydro power could

not be made without the certainty and security of a multi-decade license. Alcoa Power

Generating Inc., 643 F.3d at 970. As a result, the D.C. Circuit Court held that it would

be a hardship for a power generating company to endure a delay in its application for a

new 50-year license. Id.

       Similarly, our General Assembly acknowledged in the SNG Act that “[l]ong term

contracts for the purchase of SNG between the [IFA] and SNG producers will enhance

the receipt of federal incentives for the development, construction, and financing of new

coal gasification facilities in Indiana.” I.C. § 4-4-11.6-12. Towards that end, the General

Assembly provided that an SNG purchase contract must have a thirty year term. I.C. § 4-

4-11.6-12. It is clear from these provisions that the General Assembly recognized the

importance of investment in SNG development and would consider a delay in our review

of the finality of a purchase contract a hindrance to such investments. As such, we will

consider the issue.



                                            17
       Turning to the second component of the Utilities’ claim, that the Contract does not

provide the requisite guarantee of savings to retail end use customers, we reject the IFA

and IG’s argument that this is a UMA issue rather than a purchase contract issue. It is

clear that the SNG Act considers purchase contracts and UMAs as being independent of

each other. I.C. § 4-4-11.6-22 provides that the IFA may request the Commission to

order gas utilities to enter into UMAs with the IFA, and I.C. § 4-4-11.6-14 provides that

the IFA may enter into purchase contracts with SNG producers and submit those

contracts to the Commission for approval. By addressing these two forms of contracts in

separate provisions, the Legislature has clarified that although a purchase contract and its

corresponding UMAs are related, they are nevertheless independent.

       Thus, because they are independent, we conclude that the parties to a purchase

contract must provide a guarantee of savings for retail end use customers in that purchase

contract, not its corresponding UMAs. The definitions listed in the SNG Act support our

interpretation. Pursuant to I.C. § 4-4-11.6-7, a purchase contract is a contract that

“provides a guarantee of savings for retail end use customers.” (emphasis added). In

contrast, § 4-4-11.6-22, which governs the establishment of UMAs, does not mention

savings for retail end use customers. In light of this construction, and because the parties

have already negotiated and received approval for the Contract, we find that the issue of

whether the Contract has provided an adequate guarantee is ripe for our review.

       With respect to hardship, this claim relates to whether the Commission had

jurisdiction to approve the Contract. As a result, there might be a significant hardship

                                            18
with respect to investments if we delay our review. Accordingly, we conclude that both

of the Utilities’ arguments are ripe for review.

                                        B. Standing

          Having found that the claims at issue are ripe for appeal, we will now address

whether the Industrial Group and the Utilities have standing to bring those claims.

Standing is a fundamental, threshold, constitutional issue that must be addressed by this,

or any, court to determine if it should exercise jurisdiction in the particular case before it.

Alexander v. PSB Lending Corp., 800 N.E.2d 984, 989 (Ind. Ct. App. 2003), trans.

denied. The issue of standing focuses on whether the complaining party is the proper

party to invoke the court’s power. Midwest Psychological Center, Inc. v. Ind. Dept. of

Admin., 959 N.E.2d 896, 902-03 (Ind. Ct. App. 2011), trans. denied. Under our general

rule of standing, only those persons who have a personal stake in the outcome of the

litigation and who show that they have suffered or are in immediate danger of suffering a

direct injury as a result of the complained-of conduct will be found to have standing. Id.

at 903.

          Our General Assembly has codified Indiana’s common law standing requirement

with respect to judicial review of Commission orders in I.C. § 8-1-3-1, which states that

“[a]ny person, firm, association, corporation, limited liability company, city, town, or

public utility adversely affected by any final decision, ruling, or order of the

[Commission] may . . . appeal to the court of appeals of Indiana [] under the same terms

and conditions as govern appeals in ordinary civil actions” (emphasis added). The IFA,

                                              19
IG, and Lincolnland argue that neither the Utilities nor the Industrial Group has standing

because neither party has proven that it has or will be adversely affected by the

Commission’s order.

       Our standard for “adversely affected” under I.C. § 8-1-3-1 is similar to the

“hardship” standard for ripeness. A party is “adversely affected” when it has sustained or

is in immediate danger of sustaining a direct injury as a result of an order. Home

Builder’s Ass’n of Ind., Inc. v. Ind. Utility Reg. Comm’n, 544 N.E.2d 181, 184 (Ind. Ct.

App. 1989). In their reply brief, the Utilities make two arguments with respect to the

Contract’s adverse effect: (1) an increase in gas bills caused by the Contract will impact

the Utilities’ ability to competitively retain customers; and (2) the Contract will impact

the Utilities’ ability to add new customers vis-à-vis alternative forms of energy such as

propane, geothermal, and electric, and thereby spread their fixed costs across a larger

customer base.

       We have found that the imposition of the UMAs is inevitable. In light of this

finding, it is clear that the Utilities will be bound to use SNG and will not, as they allege,

have the freedom to choose from among alternative forms of energy. We conclude that

this consequence is sufficiently adverse to satisfy the requirements of I.C. § 8-1-3-1.

       Likewise, as we stated above, the Industrial Group is in danger of sustaining a

direct injury as a result of the Contract. The Industrial Group will suffer direct harm if it

is subject to pass-through charges and if we find that those charges are not authorized



                                             20
under the SNG Act. As a result, we conclude that the Industrial Group is adversely

affected by the Commission’s order and has standing to appeal.

                                     C. Right to Appeal

       The IFA, IG, and Lincolnland’s final challenge with respect to justiciability is that

the Industrial Group is not an entity that has a statutory right to appeal the Commission’s

order. I.C. § 8-1-3-1 provides that “[a]ny person, firm, association, corporation, limited

liability company, city, town, or public utility . . . may . . . appeal to the court of appeals

of Indiana.” The IFA, IG, and Lincolnland note that the Industrial Group is an “an ad hoc

collection of industrial transportation customers whose ‘membership’ has changed over

the course of these proceedings.” (Appellee’s Br. p. 23).

       In United States Gypsum, Inc. v. Indiana Gas Co., Inc., 735 N.E.2d 790, 793-94

(Ind. 2000), our supreme court described the evolution of industrial transportation

customers such as the entities that comprise the Industrial Group. It explained:

       Historically, LDCs purchased both gas and transportation of that gas as a
       single “bundled” product from interstate pipelines. Beginning in 1978,
       Congress and the Federal Energy Regulatory Commission [] took steps to
       stimulate competition, leading interstate pipelines to offer transportation as
       a separate service. This created a competitive market for the gas itself and
       allowed customers to sell or “release” pipeline capacity that they did not
       need. With these changes emerged interstate marketers who sell gas to
       LDCs and large volume consumers. These large volume consumers are
       known as transportation customers because they buy gas directly from the
       marketer but rely on LDCs to provide local, intrastate pipeline
       transportation.

Id. The Industrial Group here is comprised of such transportation customers— customers

who rely on LDCs for local, intrastate pipeline transportation.

                                              21
       On January 26, 2011, when the Industrial Group filed its original petition to

intervene, it was comprised of Arcelor Mittal USA, Eli Lilly & Company, and the United

States Steel Corporation. On December 12, 2011, it filed an amendment to Appendix A

of its petition to reflect the withdrawal of Eli Lilly & Company and the United States

Steel Corporation. On December 21, 2011, it filed a second amendment to Appendix A

to reflect the addition of Haynes International, Inc., Rochester Metal Products

Corporation, and Vertellus Specialties, Inc. Finally, on January 18, 2012, the Industrial

Group filed a third amendment to Appendix A to reflect the addition of Countrymark

Refining & Logistics, LLC and Corn Products International, Inc. The IFA and IG admit

that the Industrial Group most closely resembles an association, but point to the Industrial

Group’s amendments to Appendix A as evidence that it is merely “a collection of

whomever wants to participate in this case at any given time,” rather than an association.

(Appellee’s Br. p. 24).

       The IFA and IG made the same argument before the Commission, and it was

rejected when the Commission noted that at least one member had remained in the group

from the start of the proceedings until the present. We agree and also find that the

Industrial Group has the qualities of an association. The IFA, IG, and Lincolnland cite

Hanson for the premise that an association is “formed by mutual consent for the purpose

of promoting a common enterprise or prosecuting a common objective.” Hanson v.

United Methodist Church, 704 N.E.2d 1020, 1022 n.5 (Ind. 1998). As the Industrial

Group asserts, at all points during the proceedings, its members have been industrial

                                            22
transportation customers that purchase natural gas in the competitive interstate market

and rely on gas utilities only for local transportation services. Also at all points, its

members have shared the common objective of ensuring that they are not charged fees

under the Contract as retail end use customers. Accordingly, we conclude that the

Industrial Group is an association and has standing under I.C. § 8-1-3-1.

                                        APPEAL

                                      I. Jurisdiction

       Next, we address the jurisdictional issue raised by the Utilities and the Citizens

Groups: whether the Commission exceeded its jurisdiction under the SNG Act when it

approved the Contract.     The SNG Act provides that the IFA “shall submit a final

purchase contract to the [C]omission for approval.” I.C. § 4-4-11.6-14(b). The Act

defines a “purchase contract” as “a contract that: (1) is entered into by the [IFA] and a

producer of SNG for the sale and purchase of SNG; (2) has a thirty (30) year term; (3)

provides a guarantee of savings for retail end use customers; and (4) contains other terms

and conditions determined necessary by the [IFA].” I.C. § 4-4-11.6-7. Citing I.C. § 4-4-

11.6-14(b) and the Act’s definition of “purchase contract,” the Utilities and the Citizens

Groups argue that the Commission exceeded its jurisdiction in approving the Contract

because the Contract omits essential terms, is not final, and is not a valid purchase

contract.

       An agency action is always subject to review as contrary to law. U.S. Steel Corp.

v. Northern Ind. Pub. Serv. Co., 951 N.E.2d 542, 551 (Ind. Ct. App. 2011), trans. denied.

                                            23
An agency’s decision is contrary to law when that agency fails to stay within its

jurisdiction and to abide by the statutory and legal principles that guide it. Citizens

Action Coalition of Ind., Inc. v. Northern Ind. Pub. Serv. Co., 485 N.E.2d 610, 613 (Ind.

1985), cert. denied, 476 U.S. 1137 (1986).       The Commission, as an administrative

agency, “derives its power and authority solely from the statute, and unless a grant of

power and authority can be found in the statute, it must be concluded that there is none.”

Ind. Bell Tel. Co., Inc. v. Ind. Util. Reg. Comm’n, 715 N.E.2d 351, 354 n.3 (Ind. 1999).

This court owes no deference to the Commission’s interpretation of statutes that restrict

its regulatory jurisdiction and reviews such legal decisions de novo. U.S. Steel Corp.,

951 N.E.2d at 551. Any doubt about the existence of the Commission’s authority must

be resolved against a finding of such authority, and any act by the Commission in excess

of its statutory power is ultra vires and void. Planned Parenthood of Ind. v. Carter, 854

N.E.2d 853, 864 (Ind. Ct. App. 2006).

      The first step in any statutory interpretation is determining if the Legislature has

spoken clearly and unambiguously on the point in question. If a statute is clear and

unambiguous on its face, no room exists for judicial construction. Thatcher v. City of

Kokomo, 962 N.E.2d 1224, 1227 (Ind. 2012). However, when the language is susceptible

to more than one interpretation, it is deemed ambiguous and thus open to judicial

interpretation. Id. When construing a statute, the Legislature’s definition of individual

words is binding upon us. Ind. Patient’s Compensation Fund v. Wolfe, 735 N.E.2d 1187,

1191 (Ind. Ct. App. 2000), trans. denied. If the Legislature has not defined a word used

                                           24
in a statute, the word will be given its “plain, ordinary, and usual meaning.” Planned

Parenthood of Ind., 854 N.E.2d at 866. Every word must be given effect and meaning,

and no part of the statute should be held meaningless if it can be reconciled with the rest

of the statute. Lex, Inc. v. Bd. of Trustees of Town of Paragon, 808 N.E.2d 104, 109 (Ind.

Ct. App. 2004), trans. denied.

       The SNG Act provides that the IFA must submit a final purchase contract to the

Commission for approval. I.C. § 4-4-11.6-14(b). On its face, this provision is clear and

unambiguous—it grants the Commission the authority to approve a final purchase

contract.   Significantly, though, this is the only provision in the SNG Act where the

Legislature has granted the Commission authority to approve a contract for the purchase

of SNG.     We conclude therefore that, because an agency only has authority where

expressly granted, the Commission does not have authority to approve a contract that is

not a final purchase contract as defined in the statute. See Ind. Bell Tel. Co., Inc., 715

N.E.2d at 354 n.3.

       The Utilities and the Citizens Groups make three arguments against the validity of

the Contract as a final purchase contract. First, they argue that the Contract does not

fulfill the common law requirements for an enforceable contract because it is missing

essential terms. Due to these same “missing” terms, as well as unexecuted related

agreements, they also argue that the Contract is not final. Lastly, they argue that the

Contract is not a purchase contract because it does not provide a guarantee of savings to



                                            25
retail end use customers as required by the SNG Act’s definition of “purchase contract.”

See I.C. § 4-4-11.6-7.

                                  A. Common Law Contract

       According to to the SNG Act’s definition of “purchase contract,” a purchase

contract must, first and foremost, be a contract. See I.C. § 4-4-11.6-7 (stating “‘purchase

contract’ means a contract that . . . .”) (emphasis added). The existence of a contract is a

question of law, and the basic requirements of a contract are offer, acceptance,

consideration, and a “meeting of the minds of the contracting parties.” MH Equity

Managing Member, LLC v. Sands, 938 N.E.2d 750, 757 (Ind. Ct. App. 2010), trans.

denied (quoting Batchelor v. Batchelor, 853 N.E.2d 162, 165 (Ind. Ct. App. 2006)). A

valid and enforceable contract must also be reasonably definite and certain in its material

terms so that the intention of the parties may be ascertained. Conwell v. Gray Loon

Outdoor Marketing Group, Inc., 906 N.E.2d 805, 813 (Ind. 2009). This court cannot

make a contract for the parties; nor are we at liberty to revise a contract or supply omitted

terms while professing to construe it. Zuckerman v. Montgomery, 945 N.E.2d 813, 819

(Ind. Ct. App. 2011).

       The Utilities first argue that the Contract is missing material terms because it does

not include IG’s Subordination and Intercreditor Agreement (Subordination Agreement)

with the DOE, which will clarify IG’s financing obligations to the DOE. One of the key

mechanisms through which IG can satisfy the “Guaranty Savings Amount” under the

Contract is a sale of the Plant after the 30-year contract term. However, section 2.6(d) of

                                             26
the Contract provides that the IFA may not sell the Plant without the DOE’s consent, “as

provided in the Subordination Agreement between IG and the DOE.” (Industrial Group’s

App. p. 320). Likewise, section 2.8 of the Contract provides that if there are any amounts

outstanding under the DOE’s financing agreement with IG, the IFA’s mortgage on the

Plant will be subordinated to the DOE’s mortgage. (Industrial Group’s App. pp. 321-22).

The Subordination Agreement is therefore relevant to the Contract but has not yet been

negotiated.

       In determining whether terms of a contract are essential, “[a]ll that is required is

reasonable certainty in the terms and conditions of the promises made, including by

whom and to whom.” McLinden v. Coco, 765 N.E.2d 606, 613 (Ind. Ct. App. 2002)

(quoting Johnson v. Sprague, 614 N.E.2d 585, 588 (Ind. Ct. App. 1993)). In the end, the

contract must “provide a basis for determining the existence of a breach and for giving an

appropriate remedy.” Id.

       The Subordination Agreement is relevant to the Contract, but we conclude that it

is not an essential part of the Contract. Instead, we find that the Contract is complete

without the Subordination Agreement. As required by the common law standard for a

contract, it is clear who the parties to the Contract are, what promises they have made and

to whom, the basis for determining the existence of a breach, and appropriate remedies.

Although the mortgage for the Plant is collateral for the promises made under the

Contract, it is not necessary for us to know the terms of the Subordination Agreement to

know that IG is obligated to pay the IFA the Contract Savings Guaranty Amount,

                                            27
regardless of whether the Contract identifies sufficient collateral. This conclusion should

not be construed to read that the Subordination Agreement is not material to the issues

presented in this case. The Agreement is material, but its materiality relates to whether

the Contract has fulfilled the “guaranteed savings” requirement under the SNG Act, not

to whether the Contract is a legally binding contract under our common law.

       In addition, we do not find that the term “retail end use customer” is a “missing”

term simply because the parties disagree with its definition. The Utilities’ issue with the

term “retail end use customer” is not that the parties have omitted it or that it is

ambiguous, but merely that the Contract’s definition deviates from the statute’s definition

and that the scope of the term therefore needs to be negotiated. This argument relates to

the interpretation of the Contract, not its completeness. By extension, if we find that the

definition does in fact inappropriately deviate from the statute, that finding is relevant to

whether the Commission exceeded its jurisdiction under the Act, but is not relevant to our

determination of whether the Contract is legally enforceable under our common law. In

order to determine that the Contract is legally enforceable, we need only find that the

Contract contains its essential terms. This contract does contain the term “retail end use

customer,” and its definition is clear on its face, notwithstanding the issue of whether it

conforms to the SNG Act.

       Moreover, we are not persuaded that the term “retail end use customer” is

essential. Its inclusion clarifies from whom the IFA will receive the proceeds necessary

to pay for the SNG but does not alter the IFA’s obligation to pay. No matter how many

                                             28
entities qualify as retail end use customers, and will therefore receive pass-through

charges under the Contract, the IFA must still pay the full price for the SNG. The terms

of the Contract are clear to us without identifying the entities qualifying as retail end use

customers.

       Finally, we also find that there was a meeting of minds concerning the terms in the

Contract. It is clear from the record that the parties to the Contract—the IFA and IG—

have the same understanding of the Contract and its implications. It is merely the parties

to this appeal that do not have a meeting of minds with respect to the definition of the

terms. It would be ludicrous for us to hold that in order for a contract to be binding and

enforceable, parties outside of the contract must have the same interpretation of the

contract as the parties to the contract. We therefore find that the Contract meets the

common law definition of an enforceable contract.

                                        B. Finality

       In a related argument, the Utilities assert that because the Subordination

Agreement, the UMAs, and the scope of the term “retail end use customer” have not been

negotiated or clarified, the Contract is not final as required by I.C. § 4-4-11.6-14(b). It is

a well-settled rule that “a formal written contract, which seems to be complete, will be

presumed to be the repository of the final intentions of the parties, in regard to the

subject-matter of the agreement . . . .” Straub v. Terre Haute & L.R. Co., 35 N.E. 504,

506 (Ind. 1893). We have already found that the Contract is not missing any essential

terms, so based on Straub, we similarly conclude that it is final.

                                             29
        This finding is consistent with our determination that the SNG Act contemplates

that SNG production and delivery will require many independent contracts, rather than

one ultimate purchase contract. Because the Legislature addressed purchase contracts

and the UMAs in different provisions of the SNG Act, we conclude that the Contract may

be final even if related contracts such as the Subordination Agreement or the UMAs have

not yet been negotiated.

                                        C. Savings Guarantee

        Finally, the Utilities argue that the Commission exceeded its jurisdiction when it

approved the Contract because the Contract failed to provide a guarantee of savings to

retail end use customers. See I.C. § 4-4-11.6-7. We disagree.8

        The Utilities’ primary contention is that the Contract’s “Contract Savings

Guaranty” provision is illusory because even though it guarantees that the retail end use

customers will save $100 million under the Contract, the collateral for that promise is

insufficient. Pursuant to the Contract, there are three different mechanisms by which IG

may fulfill its $100 million guarantee: (1) it may pay any shortfall in cash; (2) extend the

Contract at a lower SNG price; or (3) allow the IFA to sell the Plant. The Utilities argue

that the first mechanism is insufficient because it assumes the Plant will be profitable and

that IG will have the funds to pay cash at the end of the Contract term. Likewise,


8
 The IFA, IG, and Lincolnland ask us to find that the Utilities have waived this argument by failing to
raise it before the Commission. We decline to do so because it is clear from the record that the issue of
whether the Contract provides a guarantee of savings was raised and extensively argued before the
Commission.

                                                    30
extending the Contract up to an additional twenty years also assumes that the Plant will

be profitable and that such an extension will provide an opportunity for the IFA to make

up the shortfall. As to the third mechanism, the Utilities note that the Contract specifies

that the IFA may not receive proceeds from a forced sale of the Plant until the provisions

of the Subordination Agreement have been met. They claim that all of the proceeds from

such a sale might go to repay the $1.875 billion in financing from the DOE, rather than

the IFA. Alternatively, even if the IFA is eligible to receive proceeds from the sale of the

Plant, the Utilities assert that there is no assurance the Plant will be worth enough to

cover the savings shortfall.

       As a subsidiary issue, the Utilities and the Citizens Groups also argue that the

Contract does not guarantee savings to retail end use customers because the collateral

listed in the Contract may not be realized until after the primary term. They argue that

when it enacted the SNG Act, the Legislature intended guaranteed savings to be provided

to retail end use customers throughout the term of a purchase contract, rather than at the

end of the contract’s term. The Utilities support this argument by noting that the SNG

Act specifies that a purchase contract is a contract that “provides” rather than “will

provide” a guarantee of savings. See I.C. § 4-4-11.6-7.

       The SNG Act does not explicitly clarify whether a purchase contract guarantee of

savings must include evidence of collateral supporting the guarantee or whether the

guarantee must specify that retail end use customers will realize savings throughout the

primary term of a purchase contract. Accordingly, we will first interpret the Legislature’s

                                            31
intention in providing for a “guarantee” of savings in the SNG Act, and then we will

interpret the Contract to decide whether the Contract complies with our interpretation of

the Legislature’s intent.

                             A. Interpretation of the SNG Act

       Our primary issue is the Legislature’s meaning in its usage of the word

“guarantee.” According to the Utilities, “guarantee” means that retail end use customers

must realize savings and the Contract must therefore specify that there will be sufficient

collateral to ensure such savings. In response, the IFA, IG, Lincolnland, and the OUCC

contend that the Contract must merely provide an assurance—which they interpret as a

“promise”—of savings. According to the OUCC, “[the Utilities’ arguments] confuse the

actual guarantee of savings itself with the forms of collateral backing the guarantee that

exists in the Contract.” (the OUCC’s Br. p. 25). In light of the plain language of the

SNG Act, we agree with the IFA, IG, Lincolnland and the OUCC.

       As stated previously, the first step in any statutory interpretation is determining if

the Legislature has spoken clearly and unambiguously on the point in question.

Thatcher, 962 N.E.2d at 1227. If a statute is clear and unambiguous on its face, no room

exists for judicial construction. Id. However, when the language is susceptible to more

than one interpretation, it is deemed ambiguous and thus open to judicial interpretation.

Id. When construing a statute, the Legislature’s definition of words is binding upon this

court. Wolfe, 735 N.E.2d at 1191. If the Legislature has not defined a word used in a

statute, we will give the word its “plain, ordinary, and usual meaning.”            Planned

                                             32
Parenthood of Ind., 854 N.E.2d at 866. We must give every word effect and meaning,

and we will not hold any part of the statute meaningless if it can be reconciled with the

rest of the statute. Lex, Inc., 808 N.E.2d at 109.

       Black’s Law Dictionary defines “guarantee” as “[t]he assurance that a contract or

legal act will be duly carried out.” BLACK’S LAW DICTIONARY 723 (8th ed. 2004). Black’s

further defines “assurance” as “[s]omething that gives confidence; the state of being

confident or secure.” BLACK’S LAW DICTIONARY 135 (8th ed. 2004). This definition is

akin to a “promise” that the contract will be carried out, rather than a requirement for

security or collateral. In other words, IG was only required to promise that retail end use

customers will realize savings throughout the term; it was not required to provide proof

of collateral to ensure fulfillment of that promise.

       Turning to the issue of whether the Legislature intended a purchase contract to

guarantee savings throughout the purchase contract's term, we reject the Utilities’

analysis of the verb tense used in I.C. § 4-4-11.6-7. The SNG Act defines a purchase

contract as a contract that:      “provides a guarantee of savings for retail end use

customers.” I.C. § 4-4-11.6-7. The Utilities point to the verb “provides” and argue that

because it is present tense, as opposed to the future tense “will provide,” the Legislature

intended savings to be realized throughout the contract’s term. However, we conclude

that “provides” modifies the word “guarantee” rather than “savings.” Thus, although it is

clear that the Legislature intended a purchase contract to provide a guarantee during the



                                              33
term of a purchase contract, it is not clear whether the Legislature intended retail end use

customers to realize savings during the same term.

       As the remainder of the SNG Act is silent with respect to when retail end use

customers must realize guaranteed savings, and this is a critical issue to our analysis, we

will engage in judicial construction in order to determine the Legislature’s intent. In the

SNG Act, the Legislature expressly indicated that one of its primary goals was that gas

prices should be reasonable as a result of an SNG purchase contract. In particular, the

Legislature found that “[t]he furnishing of reliable supplies of reasonably priced natural

gas for sales to retail customers is essential for the well being of the people of Indiana”

and “obtaining low cost financing for the construction of new coal gasification facilities

is necessary to allow retail end use customers to enjoy the benefits of a reliable,

reasonably priced, and long term energy supply.” I.C. § 4-4-11.6-12 (emphasis added).

The Legislature also implied that one impetus for encouraging SNG production contracts

was to mitigate price volatility because “[n]atural gas prices are volatile, and energy

utilities have been unable to mitigate completely the effects of the volatility.” See I.C. §

4-4-11.6-12.

       Based on these expressed goals, we interpret the SNG Act in a manner consistent

with ensuring that SNG prices will be reasonable and will mitigate the otherwise volatile

nature of the natural gas market. See Wolfe, 735 N.E.2d at 1191 (“[W]e presume the

Legislature intended its language to be applied in a logical manner consistent with the

statute’s underlying policy and goals.”). Therefore, we find that the Legislature intended

                                            34
retail end use customers to be guaranteed savings throughout the term of an SNG

purchase contract. If we were to decide that a purchase contract could merely guarantee

savings after its primary term, it is possible that retail end use customers could endure

substantial losses for thirty years or more before finally realizing savings in the form of

one lump sum. Such a result would be contrary to our Legislature’s goal of providing

energy at reasonable prices and mitigating the volatile natural gas market.

                               B. Contract Interpretation

       Mindful of our interpretation of the SNG Act, we now turn to the Contract to

determine whether it conforms to our construction of the Legislature’s intended meaning

when it provided for a “guaranteed savings to retail end use customers.” We conclude

that it does.

       Under the terms of the Contract, it is clear that IG made a promise that retail end

use customers will realize savings throughout the Contract’s primary term. Section 2.5 of

the Contract provides that “[o]ver the course of the Primary Term, [IG] guarantees that

[the IFA] will realize the Contract Savings Guaranty Amount.” (Industrial Group’s App.

p. 157). The Contract then defines “Contract Savings Guaranty Amount” as:

       the aggregate savings guaranteed by [IG] to [the IFA] under [the Contract],
       which is equal to One Hundred Million Dollars ($100,000,000) in real 2008
       dollars, from [the IFA’s] purchase of [c]onforming SNG pursuant to [the
       Contract] over the Primary Term and any Shortfall Term . . .

(Industrial Group’s App. p. 207). This provision promises that there will be savings in

the amount of $100 million and that the savings will be realized “over the course of the

[p]rimary [t]erm.” (Industrial Group’s App. p. 207). Thus, we conclude that the Contract
                                            35
contains IG’s promise to provide savings to retail end use customers and its promise that

the savings would be realized throughout the primary term of the Contract. Accordingly,

we conclude that the Commission did not exceed its statutory jurisdiction when it

approved the Contract.9

                                    II. Retail End Use Customer

        The petition filed by the IFA and IG requested Commission approval of the

Contract that the two parties had entered into. The petition also requested Commission

approval, if necessary, requiring Indiana regulated energy utilities to enter into a UMA

with the IFA.

        However, in the November 22, 2011 Order, the Commission did not make any

ruling on the merits of the issue raised concerning the definition of “retail end use

customers.” The Commission approved the SNG Contract but declined to address the

merits of the proposed UMAs.

        While the Commission did not address the issue raised of the meaning of “retail

end use customers,” the Contract’s terms deviates from the SNG Act’s definition.

Accordingly, we will address whether the Contract’s term “retail end use customers”

inappropriately deviated from the SNG Act’s definition.

        The SNG Act defines “retail end use customer” as:

        a customer who acquires energy at retail for the customer’s own
        consumption: (1) from a gas utility that must apply to the [C]ommission

9
  Because we have concluded that IG was not required to prove that its collateral was sufficient to support
its guarantee, we will not further address whether the Contract appropriately limited the Plant’s CO2 costs.

                                                    36
       under [I.C. §] 8-1-2-42 for approval of gas cost changes; or (2) under a
       program approved by the [C]ommission through which the customer
       purchases gas that would be subject to price adjustments under [I.C. §] 8-1-
       2-42 if the gas were sold by a gas utility.

I.C. § 4-4-11.6-10. None of the parties argue that industrial transportation customers

acquire energy at retail from gas utilities, as would satisfy the first prong of the

definition, so the only issue we must consider is whether industrial transportation

customers receive energy under a program approved by the Commission through which

they purchase gas that would be subject to price adjustments under I.C. § 8-1-2-41 if the

gas were sold by a gas utility.

       Industrial practice distinguishes between two types of natural gas consumers:

“industrial transportation” customers and “sales” customers. It equates “sales” customers

with retail end use customers falling under the first prong of the SNG Act’s definition.

“Sales” customers purchase a full-service product from gas utilities.             Under this

arrangement, the gas utility is responsible for purchasing the gas, nominating and

scheduling the deliveries of the gas, addressing imbalances, and hedging the purchase

price of the commodity for the “sales” customer. In contrast, “industrial transportation”

customers hold full responsibility for purchasing the gas as well as nominating and

scheduling the deliveries of gas. They are responsible for any imbalances between the

quantities nominated and scheduled for receipt and delivery and actual quantities

received and delivered on both the interstate and gas utility systems. Interstate pipelines

and gas utilities generally have no obligation to provide gas to the gas utilities’ city-gate,

or if there is a failure of the supply upstream, to deliver the gas to transportation
                                             37
customers.    In effect, the gas utility is simply a transporter of the transportation

customer’s gas.

       Likewise, there is also a difference in the way that transportation customers and

sales customers are charged. Sales customers are billed in a separate charge by the gas

utility, referred to as a Gas Cost Adjustment (GCA) charge, which is a weighted average

rate applicable to all gas utility retail customers. Transportation customers pay their

suppliers for the cost of natural gas based on individual negotiations between the

transporter and gas supplier. Charges to the transportation customer are based on a

number of factors, including a market-based commodity only charge, a charge with both

a commodity and a reservation charge, and a charge reflecting both gas costs and

transportation costs to the gas utility if the gas supplier provides delivery service into the

gas utility on behalf of the transportation customer. Transportation customers then pay

gas utilities for transportation services according to tariffs approved by the Commission

under I.C. § 8-1-2-87.7.

       Based on these differences between sales customers and industrial transportation

customers, we conclude that the Legislature did not intend to include transportation

customers within the definition of “retail end use customer.”           First, transportation

customers do not purchase energy through a program approved by the Commission.

Although transportation customers pay gas utilities for transportation services based on a

tariff system approved by the Commission, the gas utility tariffs do not require the

Commission to examine and approve the commodity purchase contracts between the

                                             38
transportation customers and the third-party marketers and suppliers. See I.C. § 8-1-2-

87.7. Second, the transportation customers do not necessarily purchase energy that

would be subject to price adjustments under I.C. § 8-1-2-42 if the gas were sold by a gas

utility.     The price adjustments governed by I.C. § 8-1-2-42 are public utility rate

schedules. See I.C. § 8-1-2-42. Because transportation customers purchase energy on the

open market, the price is not governed by rate schedules. Martin J. Marz (Marz), an

energy advisor, testified that transportation customers will pay their suppliers for the cost

of natural gas based on individual negotiations. The charge may be calculated in a

variety of ways. As stated above, the charge could be a market-based commodity only

charge, a charge with both a commodity and a reservation, or a charge reflecting both gas

and transportation costs. Accordingly, the energy that transportation customers purchase

would not necessarily be subject to price adjustments if the gas were sold by a gas utility.

           Instead, the second prong of the definition of “retail end use customer” more

appropriately applies to energy customers such as those that purchase energy through

programs approved by the Commission under the Alternative Utility Regulation Act. See

I.C. § 8-1-2.5-1. One such example is the Northern Indiana Public Service Company’s

(NIPSCO) customer choice tariff. Marz testified that users of this program may choose

to obtain its gas from a NIPSCO pre-approved list of gas suppliers. Once the customer

has chosen a preferred supplier, however, the customer is not responsible for nominating

and scheduling deliveries or for any balancing-related charges or penalties. In this

respect, a customer under this program fits the mold of a traditional “sales” customer.

                                             39
       In light of this distinction, we conclude that the Legislature did not intend

industrial transportation customers, who utilize gas utilities only for their transportation

services, to be subject to the SNG Act as retail end use customers. Thus, we find that the

Contract’s definition of “retail end use customer” deviated from the statutory definition.

We reverse the Commission’s regulatory approval of the Contract.

                                     CONCLUSION

       Based on the foregoing, we conclude that (1) the Utilities and the Industrial

Group’s claims are justiciable; (2) the Commission did not exceed its jurisdiction when it

approved the Contract; and (3) the Contract’s definition of retail end use customer

inappropriately included industrial transportation customers, even though the Legislature

did not intend industrial transportation customers to be subject to the SNG Act as retail

end use customers. We reverse the Commission’s order approving the Contract.

       Reversed.

DARDEN, S. J. concurs

ROBB, C. J. concurs in part and dissents in part with separate opinion




                                            40
                              IN THE
                    COURT OF APPEALS OF INDIANA


INDIANA GAS COMPANY, INC, and                 )
SOUTHERN INDIANA GAS AND                      )
ELECTRIC COMPANY, et al,.                     )
                                              )
       Appellants-Respondents,                )
                                              )
         vs.                                  )        No. 93A02-1112-EX-1141
                                              )
INDIANA FINANCE AUTHORITY and                 )
INDIANA GASIFICATION, LLC,                    )
                                              )
       Appellees-Respondents.                 )




ROBB, Chief Judge, concurring in part, dissenting in part

               I concur in all but the final disposition of the well-considered opinion of the

majority in this case. The majority reverses the Commission’s regulatory approval of the

Contract because the definition of “retail end use customer” in the Contract deviates from the

statutory definition. I do not believe reversal of the Commission’s approval of the Contract in its

entirety is necessary.

       The Commission has the authority to approve a final purchase contract so far as the contract

comports with the statutory requirements of the SNG Act. See Ind. Code § 4-4-11.6-14. As noted by the

                                                  41
majority, the Contract at issue does comport with the statute but for the provision which includes

transportation customers within the Contract’s definition of retail end use customers. It is this inclusion

which renders the Contract definition of “retail end use customers” incompatible with the statutory

definition.


        As a general proposition, a contract made in violation of a statute is void and unenforceable.

Jaehnen v. Booker, 806 N.E.2d 31, 36 (Ind. Ct. App. 2004), trans. denied. However, if a contract contains

an unauthorized provision that can be eliminated without frustrating the basic purpose of the contract, the

remainder of the contract may be enforced. Harbour v. Arelco, Inc., 678 N.E.2d 381, 385 (Ind. 1997)

(holding that if remainder of car rental contract had conformed with statutory requirements, the inclusion

of a provision for recovery of attorney fees not authorized by statute would not have rendered entire

contract invalid because the primary purpose of the contract would not be frustrated by eliminating that

provision). Because the transportation customers are an easily identifiable group, I believe we could

merely exclude that part of the Contract which includes transportation customers in the definition of retail

end use customers without frustrating the primary purpose of the Contract. Accordingly, I would hold,

with the exclusion of that part of the Contract definition of retail end use customers which applies to

transportation customers, that the Contract was properly approved by the Commission.




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