                                                                  Sep 23 2015, 8:50 am




ATTORNEYS FOR APPELLANTS                                  ATTORNEYS FOR APPELLEE DUKE
Jerome Polk                                               ENERGY, INDIANA, INC.
Polk & Associates                                         Jane Dall Wilson
Davie, Florida                                            Peter Hatton
                                                          Faegre Baker Daniels LLP
Jennifer A. Washburn                                      Indianapolis, Indiana
Citizens Action Coalition of Indiana,
Inc.                                                      Kelley A. Karn
Indianapolis, Indiana                                     Elizabeth A. Herriman
                                                          Duke Energy, Indiana, Inc.

                                                          ATTORNEYS FOR APPELEE
                                                          INDIANA UTILITY REGULATORY
                                                          COMMISSION

                                                          Gregory F. Zoeller
                                                          Attorney General of Indiana

                                                          David Lee Steiner
                                                          Deputy Attorney General

                                                          Beth Krogel Roads
                                                          General Counsel

                                                          Andrew J. Wells
                                                          Assistant General Counsel

                                                          Jeremy R. Comeau
                                                          Assistant General Counsel
                                                          Indianapolis, Indiana


                                            IN THE
    COURT OF APPEALS OF INDIANA

Citizens Action Coalition of                              September 23, 2015
Indiana, Inc., Save The Valley,                           Court of Appeals Case No.
                                                          93A02-1503-EX-184



Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015             Page 1 of 25
      Inc., Sierra Club, Inc., and                              Appeal from the Indiana Utility
                                                                Regulatory Commission.
      Valley Watch, Inc.,                                       Carol A. Stephan, Commission
      Appellants-Respondents,                                   Chair.
                                                                Carolene Mays-Medley, Commission
              v.                                                Vice-Chair.
                                                                David Ziegner, Commissioner.
                                                                James Huston, Commissioner.
      Duke Energy Indiana, Inc.,                                Cause No. 43114 IGCC-9
      Appellee-Petitioner,

      Indiana Utility Regulatory
      Commission,

      Appellee.



      Barteau, Senior Judge


                                       Statement of the Case
[1]   In Citizens Action Coalition of Indiana, Inc. v. Duke Energy Indiana, Inc., 16 N.E.3d

      449 (Ind. Ct. App. 2014) (Citizens Action I), the Court remanded the case to the

      Indiana Utility Regulatory Commission (the Commission) for findings on two

      issues related to Duke Energy Indiana, Inc.’s petition to recover costs incurred

      while building its new power plant in Edwardsport, Indiana. On remand, the

      Commission issued an order with additional findings. Citizen’s Action

      Coalition of Indiana, Inc., Save the Valley, Inc., Sierra Club, Inc., and Valley

      Watch, Inc. (collectively, the Intervenors), appeal the Commission’s order. We

      affirm in part, reverse in part, and remand.




      Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015         Page 2 of 25
                                                       Issues
[2]   The Intervenors raise two issues, which we restate as:

                 I.      Whether the Commission’s findings on remand are
                         sufficient and supported by the evidence.
                 II.     Whether the Commission erred in issuing an order on
                         remand without reopening the record for the presentation
                                                 1
                         of additional evidence.

                                  Facts and Procedural History
[3]   The facts, as presented in Citizens Action I, are as follows:


                 In 2006, Duke operated a coal and oil-fired generating station at
                 its Edwardsport facility in Knox County, Indiana. The facility,
                 which had a capacity of 160 megawatts, had been placed ‘in-
                 service’ between 1944 and 1951, and was nearing the end of its
                 useful economic life. On September 7, 2006, Duke and Southern
                 Indiana Gas and Electric Company, d/b/a Vectren Energy
                 Delivery of Indiana, Inc., filed a Verified Petition with the
                 Commission, pursuant to Indiana Code chapters 8-1-8.5, 8-1-8.7,
                 and 8-1-8.8, requesting the issuance of applicable certificates of
                 public convenience and necessity (‘CPCN’) and applicable
                 certificates of clean coal technology for the construction of a 630–
                 megawatt capacity, integrated gasification combined cycle
                 (‘IGCC’) power plant at the Edwardsport location. An IGCC
                 generating facility converts coal into synthesis gas, which is used
                 to fuel highly efficient combustion turbines.
                 In the Verified Petition, Duke requested: approval of the
                 estimated costs and construction schedule of the IGCC Project
                 (‘the Project’); authority pursuant to Indiana Code section 8-1-
                 8.8-12 to recover construction and operating costs associated



      1
          The Intervenors have filed a Motion for Oral Argument. We deny the Motion by separate order.


      Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015                  Page 3 of 25
        with the Project on a timely basis via applicable rate adjustment
        mechanisms; authority to use accelerated depreciation for the
        Project; approval of certain additional financial incentives
        associated with the Project; authority to defer its property tax
        expense, post-in-service carrying costs, depreciation costs, and
        operation and maintenance costs associated with the Project on
        an interim basis until the applicable costs are reflected in Duke’s
        retail electric rates; and authority to recover other related costs
        associated with the Project. In re Duke Energy Ind., Inc., 43114,
        2007 WL 4150583 (Nov. 20, 2007). Duke also asked the
        Commission to conduct an ongoing review of the construction of
        the Project. Id.
        Pursuant to Indiana Code section 8-1-1.1-5.1, the Indiana Office
        of the Utility Consumer Counselor (‘OUCC’) participated in the
        proceedings before the Commission on behalf of consumers and
        ratepayers. Intervenors, Duke Energy Indiana Industrial Group
        (‘Industrial Group’), and Nucor Steel, a Division of Nucor
        Corporation (‘Nucor’), among others, were additional parties to
        this proceeding.
        On November 20, 2007, the Commission issued its final order in
        consolidated Cause Numbers 43114 and 43114-S1 and made
        several determinations, including: (1) approval of CPCNs for the
        Project under [Indiana Code chapters] 8-1-8.5 and 8-1-8.7; (2)
        approval of Duke’s estimated costs of $1.985 billion as
        reasonable to complete the Project; and (3) agreement that
        ongoing review of the construction of and cost recovery for the
        Project would be conducted in semi-annual proceedings. Id. The
        semi-annual proceedings included a rate adjustment mechanism,
        the IGCC Rider. In each IGCC Rider, the Commission would
        review the progress of the Project’s construction and consider
        Duke’s request to immediately recover construction costs,
        financing costs, and other operating costs that Duke had incurred
        during the previous six-month period. Once approved, these
        costs were immediately added to customers’ rates. Each six-
        month period was numbered, with the first being IGCC-1, the
        second IGCC-2, and so forth. In the instant action, Intervenors

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        appeal from the Commission’s order (‘Order’) in the ninth semi-
        annual review, IGCC-9.
        In May 2008, Duke filed its petition in IGCC-1, which included a
        request by Duke to revise the projected cost estimate of the
        Project from $1[.]985 billion to $2.35 billion and a request for
        approval to undertake studies related to carbon capture at the
        Project and for cost recovery for such studies. On January 7,
        2009, the Commission issued its order in IGCC-1 approving: (1)
        Duke’s increase in cost estimate to $2.35 billion and its ongoing
        review progress report; (2) timely recovery from ratepayers of
        construction and operating costs, including financing, through
        the IGCC Rider for the six months under review; and (3) studies
        related to carbon capture at the Project and cost recovery for such
        studies. In re Duke Energy Ind., Inc., 431114 IGCC-1, 2009 WL
        214580 (Jan. 7, 2009). In the subsequent two reviews, the
        Commission also approved Duke’s cost recovery requests in
        IGCC-2 and IGCC-3.
        On November 24, 2009, in connection with IGCC-4, Duke
        requested approval from the Commission to recover from
        ratepayers the costs it had incurred during the six-month period
        ending September 30, 2009. Duke also requested a subdocket,
        referred to as IGCC-4S1, asking the Commission to approve an
        increase to the cost estimate for the entire project. In re Duke
        Energy Ind., Inc., 2012 WL 6759528 (Ind. U.R.C., Dec. 27, 2012).
        Under IGCC-4S1, Duke initially requested an increase in the
        Project’s cost from $2.35 billion to $2.88 billion including
        allowance for funds used during construction (‘AFUDC’). Id.
        Subsequently, Duke proposed to voluntarily cap the costs that it
        would seek from customers and sought approval of a Project cost
        estimate of $2.72 billion in direct construction costs, plus all
        associated AFUDC costs on the $2.72 billion for a total of
        approximately $3 billion. Id.
        On July 28, 2010, the Commission issued its interim order in
        IGCC-4, approving Duke’s six-month costs and the IGCC Rider
        on an interim basis, pending the outcome of IGCC-4S1. On
        September 17, 2010, Duke, Industrial Group, and the OUCC
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        submitted a settlement agreement to the Commission in IGCC-
        4S1, which set a hard cap cost of $2[.]975 billion on the
        construction costs of the Project. Subsequently, amidst an ethics
        scandal involving Duke and the Commission, the settlement
        agreement was withdrawn.
        About two years later, on April 30, 2012, Duke filed a modified
        settlement agreement in IGCC-4S1 (“Agreement”) to which
        Duke, Industrial Group, OUCC, and Nucor were all parties.
        Appellants’ App. at 321-32. This Agreement included a $2[.]595
        billion hard cost cap for construction costs and provided a partial
        cap on capital costs up through the Plant’s in-service date. Id. at
        322. The Agreement included conditions that Duke had to meet
        before the Plant would be declared in-service and also stated that
        the “In-Service Operational Date shall not be prior to September
        24, 2012.” Id. at 323. Intervenors were not signatories to the
        Agreement in IGCC-4S1 and actively opposed it being approved
        by the Commission.
        On December 27, 2012, the Commission issued its final order
        approving the Agreement in IGCC-4S1, again over Intervenors’
        objections. The Commission simultaneously issued final orders
        in several other IGCC Rider proceedings that were then pending,
        but were essentially concluded: Cause Nos. 43114 IGCC-5,
        IGCC-6, IGCC-7, and IGCC-8. In these Orders, the
        Commission began implementation of the IGCC-4S1 settlement.
        In re Duke Energy Ind., Inc., 2012 WL 6759529 (Ind. U.R.C., Dec.
        27, 2012); In re Duke Energy Ind., Inc., 2012 WL 6759530 (Ind.
        U.R.C., Dec. 27, 2012); In re Duke Energy Ind., Inc., 2012 WL
        6759531 (Ind. U.R.C., Dec. 27, 2012); and In re Duke Energy Ind.,
        Inc., 2012 WL 6759532 (Ind. U.R.C., Dec. 27, 2012).
        On June 8, 2012, Duke filed its Verified Petition in the instant
        action, IGCC-9, requesting:
        [T]hat the Commission, for ratemaking purposes, authorize the
        addition of the actual expenditures for its IGCC Project made
        through March 31, 2012, to the value of Petitioner’s property.
        Petitioner further requests that the Commission approve and

Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 6 of 25
        authorize the requested rate adjustment allowing Petitioner to
        earn a return on said amount, in addition to the return on value
        of its used and useful utility property and on its construction
        work in progress investment previously approved by the
        Commission. Petitioner also requests recovery of certain other
        applicable costs and credits via the IGCC Rider, including ...
        depreciation, and Indiana Coal Gasification Technology
        Investment Tax Credit, as well as reconciliation of amounts
        necessary to adjust the IGCC Rider charges and credits to actual
        amounts.
        Appellants’ App. at 36-37.
        That same day, the parties offered written testimony into
        evidence. That evidence was admitted without objection.
        Duke’s testimony was submitted by W. Michael Womack, Vice
        President of the Project; Jack L. Stultz, General Manager II,
        Regulated Fossil Stations; and Diana L. Douglas, Duke’s
        Director of Rates. Appellant’s App. at 9. Kerwin L. Olson,
        Executive Director for Citizens Action Coalition of Indiana, Inc.,
        submitted testimony, again without objection, on behalf of
        Intervenors on December 10, 2012. Id. at 10. The pertinent
        portions of the testimony will be discussed below.
        The Commission held a hearing on Duke’s petition on January
        15, 2013. About two weeks later, Duke filed its post-hearing
        argument in the form of a Proposed Order. Intervenors filed
        Exceptions to Duke’s Proposed Order on February 21, 2013,
        setting out the following specific legal and factual objections to
        the relief Duke requested in this case[:]
        1. Duke is not entitled to recover financing costs for the three [-]
        month delay that occurred as a result of events that took place
        during the review period at issue in this case. Duke failed to
        carry its burden of proof that the Project financing costs
        attributable to this three month delay were reasonable and
        necessary, as required under Indiana Code § 8-1-8.8-12.
        2. Duke should not be permitted to increase customer rates by
        declaring 50% of the plant ‘in-service,’ given that the plant

Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 7 of 25
        admittedly did not meet the definition of the ‘In-Service
        Operational Date’ included in the 4S1 Settlement Agreement and
        approved by the Commission’s 4S1 final order. Duke contends
        the in-service definition in the Settlement is to be used purely for
        ratemaking purposes. Yet at the same time, Duke’s witness
        Diana Douglas acknowledged that Duke’s proposed ‘partial’ in-
        service declaration will, in fact, increase customer rates.
        Appellants’ App. at 418.
        Duke filed a Reply to these arguments on February 28, 2013. Id.
        at 466–85. In pertinent part, Duke asserted:
        3) no evidence has been presented in this proceeding that the
        schedule update testified to by [Duke’s] witness Mr. Womack
        was unreasonable or caused by imprudence;
        4) the principles of collateral estoppel or issue preclusion do not
        apply to this proceeding, which covers an entirely different time
        period than that reviewed by the Commission in IGCC-4S1;
        5) the determination that a portion of the Edwardsport IGCC
        Project should be placed in[-]service for income tax purposes
        does not contravene the Settlement Agreement approved by the
        Commission in IGCC-4S1, nor does it negatively impact
        customers;
        6) [Duke’s] calculation of its AFUDC is proper and logical, and
        [Duke] has not and is not earning a return on its deferred tax
        balance.
        Id. at 466-67.
        On April 3, 2013, the Commission entered its Final Order in
        IGCC-9, approving the financing costs that Duke incurred during
        the IGCC-9 review, which included an alleged $61 million of
        financing costs that Duke incurred during the three-month delay.
        The Commission approval allowed Duke to pass along to
        ratepayers, through the IGCC Rider, all of the IGCC-9 financing
        costs including the $61 million.
        In its order, the Commission set forth ‘Discussions and
        Findings,’ but failed to make findings regarding the
Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 8 of 25
              reasonableness of the three-month delay or whether 50% of the
              IGCC Plant was deemed to be in-service.
      Citizens Action I, 16 N.E.3d at 450-455 (footnotes omitted).


[4]   On appeal, Intervenors challenged the adequacy of the Commission’s findings

      and the sufficiency of the evidence to support the findings. The Court

      remanded the case to the Commission with instructions to issue findings on two

      issues: (1) “whether the three-month delay was chargeable to Duke, and if so,

      what impact that delay had on Duke’s customers’ rates;” and (2) “a clear

      statement of the policy and evidentiary considerations underlying its

      determination regarding Duke’s request that 50% of the Plant be deemed to be

      in-service.” Id. at 460, 462. The Court did not express an opinion as to

      whether the Commission should reopen the record to receive new evidence.


[5]   On remand, Duke filed a motion asserting that the Commission did not need to

      receive additional evidence and asking the Commission to either: (1) issue

      additional findings; or (2) set a timetable for the parties to submit proposed

      findings for the Commission’s review. The Intervenors objected, claiming that

      the Court’s opinion in Citizens Action I required the Commission to consider

      additional evidence. Duke filed a reply.


[6]   On February 25, 2015, the Commission issued an order. The Commission

      determined, “it is not necessary for the Commission to reopen the record in this

      cause for taking additional evidence.” Appellants’ App. p. 8. Instead, the

      Commission issued findings on the issues raised by the Court in Citizens Action

      I. Regarding the three-month delay, the Commission stated, “based on the

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      extensive evidence offered by [Duke] in this proceeding, we find that [Duke’s]

      actions during the review period were not unreasonable. Specifically, we find

      that the schedule delays did not result from unreasonable actions taken by

      [Duke] in light of the complexity of the task being undertaken.” Id. at 9.


[7]   As for Duke’s declaration that the plant was partially in-service for federal tax

      purposes prior to the in-service date it had agreed to in the settlement agreement

      in IGCC-4S1, the Commission stated:

              The Settlement Agreement referenced by the Parties was
              approved by the Commission on December 27, 2012 and
              included requirements that [Duke] had to meet before the IGCC
              Project would be declared in-service. The entity that ultimately
              must determine when [Duke] should declare the IGCC Project
              in-service for federal income tax purposes is the Internal Revenue
              Service, not the Commission. The Commission determines the
              in-service date for ratemaking purposes. Utilities often keep
              separate books and records designed to address different
              reporting and regulatory requirements, as is generally the case for
              tax purposes and for regulatory purposes. To be clear, a utility’s
              taxes due are a cost of service and as such impact the rates that
              customer’s [sic] pay, so the influence of such decisions must be
              understood. Specifically, because the tax conditions of a utility
              impact the weighted average cost of capital and revenue
              conversion factors that influence rates ultimately charged to
              customers, the Commission previously explored and accepted
              [Duke’s] August 1, 2012 in-service date for tax purposes in Cause
              Nos. 42061 ECR 19 and ECR 20. These cases were the first to
              address the IGCC Project’s in-service date for tax purposes and
              its impact upon rates. In the August 29, 2012 Order, in Cause
              No. 42061 ECR 19, the Commission ordered DEI to notify the
              Commission in a future ECR proceeding and IGCC proceeding
              when a definite determination of the timing of the in-service date

      Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 10 of 25
              for tax purposes has been made. Ms. Douglas’ testimony
              submitted in this proceeding provided the Commission with the
              requested notification. Additionally, Joint Intervenors did not
              question the accuracy of Ms. Douglas’ rate calculations. Because
              the Commission had allowed the impact of [Duke’s] in-service
              date for tax purposes to be recognized for ratemaking purposes in
              prior proceedings, and we were not presented with any evidence
              suggesting a reversal of those decisions, we did not discuss it
              explicitly in the Commission’s Order.
      Appellants’ App. p. 5. This appeal followed.


                                    Discussion and Decision
                                       A. Standard of Review
[8]   The General Assembly created the Commission primarily as an impartial fact-

      finding body with the technical expertise to administer the regulatory scheme

      devised by the legislature. N. Ind. Pub. Serv. Co. v. U.S. Steel Corp., 907 N.E.2d

      1012, 1015 (Ind. 2009). The Commission can only exercise power conferred

      upon it by statute. Id. The General Assembly has directed the Commission to

      ensure that utilities provide “safe, adequate, efficient, and economical retail

      energy services.” Ind. Code § 8-1-2.5-1(1) (1995). In addition, the General

      Assembly has stated that Indiana “should encourage the use of advanced clean

      coal technology, such as in coal gasification.” Ind. Code § 8-1-8.8-1(a)(5)

      (2011).


[9]   A party that is adversely affected by a ruling of the Commission may appeal as

      follows:




      Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 11 of 25
               Any 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, within
               thirty (30) days from the date of entry of such decision, ruling, or
               order, appeal to the court of appeals of Indiana for errors of law
               under the same terms and conditions as govern appeals in
               ordinary civil actions, except as otherwise provided in this
               chapter and with the right in the losing party or parties in the
               court of appeals to apply to the supreme court for a petition to
               transfer the cause to said supreme court as in other cases. An
               assignment of errors that the decision, ruling, or order of the
               commission is contrary to law shall be sufficient to present both
               the sufficiency of the facts found to sustain the decision, ruling,
               or order, and the sufficiency of the evidence to sustain the finding
               of facts upon which it was rendered.
       Ind. Code § 8-1-3-1 (1993).


[10]   The Court implements a multiple tiered standard of review, as follows:

               First, the order must contain specific findings on all the factual
               determinations material to its ultimate conclusions. We review
               the conclusions of ultimate facts, or mixed questions of fact and
               law, for their reasonableness, with greater deference to matters
               within the [Commission’s] expertise and jurisdiction. Second,
               the findings of fact must be supported by substantial evidence in
               the record. We neither reweigh the evidence nor assess the
               credibility of witnesses and consider only the evidence most
               favorable to the [Commission’s] findings. Finally, we review
               whether [the Commission’s] action is contrary to law, but this
               constitutionally preserved review is limited to whether the
               Commission stayed within its jurisdiction and conformed to the
               statutory standards and legal principles involved in producing its
               decision, ruling, or order.
       Ind. Gas Co. v. Ind. Fin. Auth., 999 N.E.2d 63, 66 (Ind. 2013) (citations omitted).

       The entity challenging the Commission’s decision has the burden of proof to

       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 12 of 25
       show that the decision is contrary to law. City of Fort Wayne v. Util. Ctr., Inc.,

       840 N.E.2d 836, 839 (Ind. Ct. App. 2006).


                       B. Sufficiency of the Findings and Evidence
                                             1. Three-Month Delay

[11]   Intervenors argue that the Commission’s finding on remand that Duke did not

       act unreasonably in the course of addressing the three-month delay in the

       plant’s commissioning schedule is insufficient and unsupported by evidence.


[12]   The General Assembly instructed the Commission to “encourage clean energy

       projects” by creating financial incentives for utilities who undertake such

       projects. Ind. Code § 8-1-8.8-11 (2011). Clean energy projects, as defined by

       the General Assembly, include “facilities that employ the use of clean coal

       technologies.” Ind. Code § 8-1-8.8-2 (2011). Financial incentives may include

       “timely recovery of costs and expenses incurred during construction and

       operation” of clean energy projects. Ind. Code § 8-1-8.8-11(a)(1). Recoverable

       costs may include “capital, operation, maintenance, depreciation, tax costs, and

       financing costs.” Ind. Code § 8-1-8.8-5 (2002).


[13]   With respect to coal gasification power plants such as the one at issue here, the

       Commission shall allow an eligible business to recover “the costs associated

       with qualified utility system property; and . . . qualified utility system expenses”

       if the business “provides substantial documentation that the expected costs and

       expenses and the schedule for incurring those costs and expenses are reasonable

       and necessary.” Ind. Code § 8-1-8.8-12(d) (2011).

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[14]   The Intervenors claim that on remand, the Commission failed to issue specific

       findings on every factual determination that was material to its ultimate finding

       of reasonableness, thereby rendering appellate review impossible. In Citizens

       Action I, the Court directed the Commission to answer a very specific question:

       “whether the three-month delay was chargeable to Duke, and if so, what impact

       that delay had on Duke’s customers’ rates.” 16 N.E.3d at 460. The

       Commission’s order on remand discussed the evidence that the parties had

       submitted in connection with this issue, determined that Duke’s evidence was

       entitled to more weight than the Intervenors’ evidence, and found that Duke

       had established that the costs related to the delay that were incurred during the

       review period were not unreasonable. The Commission’s order is sufficient to

       permit appellate review of the issue.


[15]   Next, the Intervenors claim that the Commission inappropriately switched the

       burden of proof from Duke to them, requiring them to prove that the costs were

       unreasonable. The evidence indicates otherwise. In the original final order in

       IGCC-9, the Commission determined that Duke had “adequately satisfied the

       information reporting requirements to the Commission” and that Duke’s

       calculation of construction costs and other expenses “accurately reflects the net

       retail jurisdictional IGCC Project investment as of March 31, 2012.” Appellee

       Duke’s App. pp. 108-09. In the order at issue in this appeal, the Commission

       stated, “based on the extensive evidence offered by [Duke] in this proceeding,

       we find that the schedule delays did not result from unreasonable actions taken

       by [Duke].” Appellants’ App. p. 9. The Commission thus indicated that Duke,


       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 14 of 25
       the party seeking to recover costs, bore the burden of providing sufficient

       evidence to prove the extent and reasonableness of those costs.


[16]   The Commission noted that the Intervenors “offered very little evidence to

       support their allegations of imprudence” and determined that Duke’s

       interpretation of reports offered by the Intervenors was “reasonably plausible.”

       Id. These statements are best understood as weighing the party’s evidence

       rather than altering the burden of proof. There is no indication that the

       Commission shifted Indiana Code section 8-1-8.8-12(d)’s burden of proof to the

       Intervenors. See City of Fort Wayne, 840 N.E.2d at 842 (Commission did not

       shift burden of proof to respondents; record demonstrated that the petitioner

       bore the burden of submitting proper documentation to support its requests); Cf.

       NIPSCO Indus. Group v. N. Ind. Pub. Serv. Co., 31 N.E.3d 1, 9 (Ind. Ct. App.

       2015) (Commission improperly shifted burden of proof to intervening parties by

       determining that petitioner’s future projects were presumptively eligible for rate

       increases through tracker proceedings that had not yet begun).


[17]   The Intervenors also argue that the evidence does not support the

       Commission’s finding that Duke’s actions in relation to the three-month delay

       were not unreasonable. Per our standard of review, we consider the evidence in

       the light most favorable to the Commission’s decision.


[18]   As of April 2012, the only construction work remaining to be completed was

       “10% of pipe insulation, the last 5% of electrical heat tracing, and punchlist

       items.” Tr. p. 207. Ninety-one of the 2014 operating systems for the plant had


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       been released to Duke’s control by the systems’ vendors. The construction

       portion of the project was “99% complete.” Id.


[19]   Nevertheless, issues arose as various systems were installed and tested, resulting

       in a three-month delay during the six-month review period at issue here. For

       example, a Duke contractor accidentally activated an “ASU train 2

       Compander” without appropriately oiling the device’s bearings, which

       damaged the device and required Duke to ship it back to the manufacturer to be

       rebuilt. Id. at 45-46, 176. Duke’s Vice President in charge of the plant

       construction project, Michael Womack, attributed the problem to “human error

       which we can’t completely eliminate from any phase of work.” Tr. pp. 45-46.

       He also said that the vendor, GE, provided “inaccurate or confusing,

       conflicting, information on drawings.” Id. at 47, 178-79.


[20]   Another compander also had to be sent back to the manufacturer for rebuilding

       due to rust problems. The manufacturer was able to rebuild one compander

       and send it back to Duke within several weeks. The other compander was out

       for fifteen weeks, but that did not impact the construction schedule because

       Duke needed only one functioning compander to perform startup testing.


[21]   On another occasion, commissioning of the “power block” was slowed because

       GE, who built and installed several crucial systems in the new plant, performed

       extra tests on two turbines before releasing them to Duke for startup testing. Id.

       at 65-66. The extra tests would not have been necessary on a more

       conventional construction project, but the turbines had “a new blade design,


       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 16 of 25
       new—not built anywhere else.” Id. at 66. Thus, GE, not Duke, caused a delay

       by performing additional testing on this new technology.


[22]   The parties also discussed a six-week delay caused by a “water hammer” event

       that damaged piping and valves and required a “realignment of the steam

       turbine.” Id. at 68. The event occurred on June 26, 2012, outside the time

       period for which Duke sought to recover costs in this proceeding (IGCC-9). In

       any case, the event was caused by “malfunctioning equipment and control

       system logic errors,” Id. at 303, rather than negligence or other unreasonable

       behavior by Duke. The Intervenors also cite two other delays, caused by

       lengthy detergent cleaning of gas removal systems and an unexpected need to

       replace critical control valves in the gasification tower, both of which occurred

       outside the time period at issue here.


[23]   Furthermore, when technical problems or damaged parts caused delays in

       testing and commissioning systems, the evidence, including internal emails,

       reflects that Duke acted with necessary speed in identifying and fixing the

       problems.


[24]   Based on our review, there is sufficient evidence to support the Commission’s

       finding that the construction delays during the time period at issue in IGCC-9

       were not caused by unreasonable behavior by Duke or its contractors. See

       Citizens Action Coalition of Ind., Inc. v. Duke Energy Ind., Inc., 15 N.E.3d 1030,

       1038 (Ind. Ct. App. 2014) (determining that sufficient evidence supported the




       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 17 of 25
       Commission’s decision to allow Duke to recover construction costs in IGCC-

       10), trans. denied.


[25]   The Intervenors cite to evidence, consisting mostly of reports from GE, to argue

       that Duke cut corners during construction and testing, which the Intervenors

       claim was unreasonable and resulted in equipment failures. The Commission,

       as the finder of fact, was free to weigh the reports and determine how credible

       they were. As the Commission noted in the order at issue here, no one from

       GE appeared at the Commission’s evidentiary hearing to explain and

       authenticate GE’s position as stated in the reports and other communications.

       In addition, Duke submitted evidence refuting GE’s allegations. The

       Intervenors are essentially asking the Court to reweigh the evidence, in

       violation of our standard of review.


[26]   Finally, the Intervenors assert that the Commission failed to adequately

       calculate the cost to ratepayers caused by the three-month delay. The Court’s

       opinion in Citizens Action I directed the Commission to calculate the costs only if

       it determined that the three-month delay was chargeable to Duke. 16 N.E.3d at

       460. The Commission, by finding that Duke did not act unreasonably, did not

       charge the delay to Duke, so we need not address this point further.


                   2. Resolution of the Plant’s In-Service Date for Tax Purposes

[27]   The Intervenors challenge the Commission’s finding that Duke did not violate

       the settlement agreement in IGCC-4S1 by declaring the Edwardsport plant to

       be partially in-service for federal tax purposes prior to the in-service date it had


       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 18 of 25
       agreed to in the settlement agreement. The Intervenors further assert that

       Duke’s declaration violated the plain language of the settlement agreement.


[28]   A settlement agreement is a type of contract. Language in a contract should be

       given its plain and ordinary meaning unless a particular term is used in a

       manner intended to convey a specific technical concept. Washington Nat’l Corp.

       v. Sears, 474 N.E.2d 116, 121 (Ind. Ct. App. 1985), trans. denied. In construing a

       written instrument, we give technical words and terms of art their technical

       meaning. George S. May Intern. Co. v. King, 629 N.E.2d 257, 262 (Ind. Ct. App.

       1994), trans. denied. We presume that the parties know the technical meaning of

       the language they use in a formal instrument and have adopted that meaning.

       Id.


[29]   The settlement agreement in IGCC-4S1 was intended to resolve “all disputes,

       claims, and issues . . . relating to the construction costs and allowance for funds

       used during construction (‘AFUDC’) costs associated with the Edwardsport

       IGCC Project.” Tr. p. 412. With respect to an in-service date, the agreement

       provides, in relevant part:

               ‘In-Service Operational Date’ means the first date by which the
               Project has both (1) been declared in-service in accordance with
               FERC guidelines as the earlier of the date the asset is placed in
               operation or is ready for service; and (2) has operated on both
               natural gas and syngas; provided however that the In-Service
               Operational Date shall not be prior to September 24, 2012.
       Tr. p. 413.




       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 19 of 25
[30]   Two observations may be drawn from the terms of the agreement. First, the

       agreement was intended to address construction costs in the context of utility

       regulation and utility rates. Second, the parties defined “in-service” in highly

       technical terms, with reference to Federal Energy Regulatory Commission

       guidelines and specific technological benchmarks. It thus appears that the

       parties limited the definition of “In-Service Operational Date” to utility

       regulatory matters and did not state a broad, plain-language meaning of the

       term that might bar Duke from declaring the plant to be in-service for other

       purposes, such as federal tax accounting.


[31]   In addition, Duke’s Director of Rates, Diana L. Douglas, testified that in her

       experience as an accountant, there is a difference between declaring a plant in-

       service for federal tax purposes and declaring a plant in-service for ratemaking

       purposes. Tr. pp. 363-64, 378-79. There is sufficient evidence in the record to

       support the Commission’s determination that Duke did not violate the

       settlement agreement by declaring the plant to be partially in-service for federal

       tax purposes before the “In-Service Operational Date” set forth in the

       settlement agreement.


        3. Reasonableness of Costs Related to Declaring the Plant In-Service for Tax
                                         Purposes

[32]   The Intervenors next argue that the Commission erred because Duke and the

       Commission both concede that Duke’s declaration of the plant as being

       partially in-service for federal tax purposes raised utility rates, but the

       Commission failed to consider the impact of those costs in this proceeding. The

       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 20 of 25
       Intervenors also presented this argument in Citizens Action I, but we were unable

       to address the argument then due to the lack of findings related to Duke

       declaring the plant to be partially in-service for tax purposes.


[33]   On remand, the Commission impliedly determined that the impact upon rates

       was reasonable because it found that it “had allowed the impact of [Duke’s] in-

       service date for tax purposes to be recognized for ratemaking purposes in prior

       proceedings, and [it was] not presented with any evidence suggesting a reversal

       of those decisions.” Appellants’ App. p. 5. The Commission cited to orders

       from prior proceedings, ECR 19 and ECR 20, in support of its finding.


[34]   The Intervenors claim that the Commission erred by considering the orders

       from ECR 19 and ECR 20, asserting that those orders were not introduced into

       the record in IGCC-9 and the Commission did not take proper notice of them.

       The Intervenors are correct. Duke cited to the order from ECR 19 in its Reply

       Brief to the IURC in this case, but neither Duke nor the Intervenors asked to

       have that order or the order from ECR 20 admitted as evidence in this case. In

       addition, the Commission has a procedure for taking administrative notice of its

       orders from prior cases. See 170 IAC 1-1.1-21 (2012). Nothing in the record

       indicates that the Commission followed that procedure with the orders from

       ECR 19 and ECR 20. The Commission erred in considering those orders in

       this proceeding, and its finding related to those orders is not supported by

       properly admitted evidence.




       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 21 of 25
[35]   Next, the Commission found that Duke’s Director of Rates, Diana Douglas,

       notified the Commission in this case of the date that Duke had declared the

       plant to be partially in-service for tax purposes. That finding appears to be

       supported by the record, but does not address the issues of whether declaring

       the plant partially in-service affected Duke’s costs in this proceeding and, if so,

       whether those costs and the impact upon ratepayers are reasonable.


[36]   The Commission also found that the Intervenors “did not question the accuracy

       of Ms. Douglas’ rate calculations.” Appellants’ App. p. 5. It appears from the

       record that the Intervenors did not challenge her math. However, Duke did not

       clarify until December 20, 2012, that its petition for cost recovery in this case

       was affected by declaring the plant partially in-service for tax purposes. On that

       date, Douglas filed her written rebuttal testimony with the Commission,

       explaining that Duke’s proposed utility rates were affected by its tax liabilities.

       The Commission held its evidentiary hearing on January 15, 2013, less than a

       month after Duke filed Douglas’s rebuttal testimony. At the hearing, Douglas

       further clarified that the partial in-service declaration effectively raised the rates

       on Duke’s utility customers. In Citizens Action I, we noted that these late

       clarifications deprived the Intervenors of the opportunity to object to the rate

       implications of the partial in-service declaration and conduct discovery on

       Duke’s calculations. 16 N.E.3d at 461.


[37]   Nevertheless, although the Intervenors had limited opportunities to examine

       Douglas’s calculations for the impact of the in-service declaration, during the

       evidentiary hearing the Intervenors cross-examined Douglas extensively about

       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 22 of 25
       the rate consequences arising from Duke’s partial in-service declaration. The

       Intervenors subsequently stated in their objection to Duke’s proposed final

       order that the Commission should reject Duke’s proposed rates because the tax

       consequences resulted in an inappropriate increase to customers’ rates. Thus,

       the Intervenors presented argument to the Commission on the reasonability of

       the rate impact resulting from Duke’s declaration that the plant was partially in-

       service for tax purposes.


[38]   We conclude from this evidence that although the settlement in IGCC-4S1 did

       not bar Duke from declaring the power plant to be partially in-service for

       federal tax purposes, the Commission was obligated to determine the impact of

       that in-service declaration upon the rates Duke sought in this action, and

       whether the rates were reasonable per Indiana Code section 8-1-8.8-12(d). The

       findings in the Commission’s original order and the order on remand do not

       adequately address these points. We must reverse and remand. See L.S. Ayres &

       Co. v. Indianapolis Power & Light Co., 169 Ind. App. 652, 351 N.E.2d 814, 830

       (Ind. Ct. App. 1976) (reversing and remanding for further proceedings where

       the commission’s order did not address a key issue raised by a party or

       articulate the reasons for its decision).


                          C. Choosing Not to Reopen the Record
[39]   The Intervenors argue that the Commission erred by failing to reopen the

       record on remand to hear additional evidence. The Court in Citizens Action I did

       not order the Commission to receive additional evidence. The Court also did


       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 23 of 25
       not bar the Commission from receiving additional evidence if deemed

       necessary.


[40]   Based on our review of the record, there was ample evidence regarding the

       three-month delay and its impact upon Duke’s petition for cost recovery, and

       there was no need for additional evidence on remand to address that issue. By

       contrast, there are insufficient findings as to the value of the rate increases

       caused by Duke’s declaration that the plant was partially in-service for tax

       purposes, and whether the increases were reasonable. Furthermore, the

       Intervenors did not have an opportunity to seek discovery on the rate increases,

       due to Duke’s late clarification of the issue. In addition, the Commission on

       remand considered additional evidence in the form of orders from ECR 19 and

       ECR 20, although those orders were not part of the record in IGCC-9 and the

       Commission did not follow the procedure for taking administrative notice of

       prior orders. The Commission’s consideration of these orders sharply

       contradicts its determination that it did not need to reopen the record on

       remand to receive additional evidence.


[41]   Under these circumstances, on remand the Commission should reopen the

       record, receive additional evidence (including any orders and other documents

       from prior or subsequent cases deemed necessary by the parties and the

       Commission), and issue findings of fact on these issues: (1) quantifying the

       impact upon Duke’s proposed rate increases in this case resulting from Duke’s

       declaration that the plant was partially in-service for tax purposes; and (2)

       determining whether the proposed increases were reasonable per Indiana Code

       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 24 of 25
       section 8-1-8.8-12(d). See Civil Commitment of W.S., 23 N.E.3d 29, 36 (Ind. Ct.

       App. 2014) (reversing and remanding for additional evidentiary hearing where

       findings of fact were silent on key issue raised by appellant), trans. denied.


                                                 Conclusion
[42]   For the reasons stated above, we affirm in part the Commission’s order, reverse

       in part, and remand for further proceedings.


[43]   Affirmed in part, reversed in part, and remanded.

       May, J., and Crone, J., concur.




       Court of Appeals of Indiana | Opinion 93A02-1503-EX-184 | September 23, 2015   Page 25 of 25
