                                                                                   FILED
                                                                               Feb 14 2017, 9:50 am

                                                                                   CLERK
                                                                               Indiana Supreme Court
                                                                                  Court of Appeals
                                                                                    and Tax Court




ATTORNEYS FOR APPELLANTS                                   ATTORNEYS FOR APPELLEES
Thomas Cmar                                                Curtis T. Hill, Jr.
Oak Park, Illinois                                         Attorney General of Indiana

Matthew Gerhart                                            David Lee Steiner
Denver, Colorado                                           Deputy Attorney General
                                                           Indianapolis, Indiana
Jennifer A. Washburn
Indianapolis, Indiana                                      Beth Krogel Roads
                                                           Jeremy R. Comeau
                                                           Indiana Utility Regulatory
                                                           Commission
                                                           Indianapolis, Indiana

                                                           Robert E. Heidorn
                                                           P. Jason Stephenson
                                                           Evansville, Indiana

                                                           Wayne C. Turner
                                                           Patrick A. Ziepolt
                                                           Indianapolis, Indiana


                                            IN THE
    COURT OF APPEALS OF INDIANA




Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017              Page 1 of 22
      Citizens Action Coalition of                               February 14, 2017
      Indiana, Inc., Sierra Club, Inc.,                          Court of Appeals Case No.
      Valley Watch, Inc.,                                        93A02-1607-EX-1637
      Appellants-Intervenors,                                    Appeal from the Indiana Utility
                                                                 Regulatory Commission
              v.                                                 The Honorable Jeffery A. Earl,
                                                                 Administrative Law Judge
      Southern Indiana Gas and                                   The Honorable Carol A. Stephan,
      Electricity Company d/b/a                                  Commissioner Chair
      Vectren Energy Delivery of                                 The Honorable Angela Weber,
      Indiana, Inc., Indiana Office of                           Commissioner
      Utility Consumer Counselor,
                                                                 The Honorable David Ziegner,
      Appellees-Petitioners                                      Commissioner
                                                                 The Honorable James Huston,
                                                                 Commissioner
                                                                 Trial Court Cause No.
                                                                 44446



      Altice, Judge.


                                                 Case Summary


[1]   Over three years ago, Southern Indiana Gas and Electric Company d/b/a

      Vectren Energy Delivery of Indiana, Inc. (Vectren) petitioned the Indiana

      Utility Regulatory Commission (IURC) for approval of projects to modify four

      of Vectren’s coal-powered generating stations to bring them into compliance

      with EPA emissions standards. Citizens Action Coalition of Indiana, Inc.,

      Sierra Club, Inc., and Valley Watch, Inc. (collectively, Intervenors) intervened

      in the action and opposed the petition.




      Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017           Page 2 of 22
[2]   The IURC ultimately approved the petition, determining that Vectren’s

      proposed projects were reasonable and necessary under Ind. Code § 8-1-8.8-11.

      Upon Intervenors’ appeal in Citizens Action Coal. of Ind., Inc. v. S. Ind. Gas & Elec.

      Co. (Vectren I), 45 N.E.3d 483 (Ind. Ct. App. 2015), another panel of this court

      remanded with respect to two of the proposed projects, finding that I.C. § 8-1-

      8.7-3 rather than I.C. § 8-1-8.8-11 applied. This court instructed the IURC to

      make findings regarding the statutory factors listed in I.C. § 8-1-8.7-3 and then

      issue or deny a certificate of public convenience and necessity (CPCN) for the

      two projects.


[3]   On remand, the IURC refused a request by Intervenors to reopen the record to

      consider new evidence. It also issued an order analyzing the nine statutory

      factors, concluding that public convenience and necessity will be served by the

      proposed clean coal technology projects, and issuing a CPCN to Vectren for the

      remaining projects. Intervenors appeal once again. They argue that the

      IURC’s findings are not adequately explained, are arbitrary and capricious, and

      are not supported by substantial evidence. Additionally, Intervenors argue that

      the IURC unlawfully denied the petition to reopen the record.


[4]   We affirm.1




      1
        By separate order issued today, we grant Intervenors’ motion to dismiss the IURC as a party to this appeal.
      We agree that because the IURC acted as a fact-finding administrative tribunal and no statute or
      administrative provision expressly makes the IURC a party on appeal, it is not a proper party on appeal from
      its own decision. See City of Terre Haute v. Terre Haute Water Works Corp., 180 N.E.2d 110, 111 (Ind. Ct. App.
      1962) (“When there are two opposing parties before [the Public Service Commission of Indiana], as here, its
      action in making findings and issuing an order deemed detrimental by one of the parties is similar to that of a

      Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017                       Page 3 of 22
                                            Facts2 & Procedural History


[5]   Vectren is a public utility company that provides electricity to southern Indiana

      residents. Eighty-five percent of Vectren’s baseload electricity is generated at

      Brown unit 1, Brown unit 2, Culley unit 2, Culley unit 3, and Warrick, all of

      which are coal-powered generators. In 2012, the EPA issued a Notice of

      Violation (NOV) alleging that Vectren’s emissions control technology at its

      Brown units was noncompliant with EPA rules governing sulfuric acid

      emissions. The EPA also served Vectren with a Clean Air Act Information

      Request that highlighted concerns with the sulfur emissions at Culley unit 3.

      Vectren and the EPA eventually reached a settlement in principle to resolve the

      outstanding allegations raised in the NOV and the information request.

      Vectren also became subject to new federal mandates regarding mercury

      emissions standards.


[6]   On January 17, 2014, as a result of the compliance issues, Vectren filed a

      petition with the IURC for approval of modifications to four of its coal-powered

      electricity generating facilities – Brown units 1 and 2, Culley unit 3, and

      Warrick. The petition sought approval of several clean energy projects and




      court which makes a decision determining a controversy between adverse parties. A court is never a party to
      an appeal from its decision.”); Cf. Ind. Code § 22-4-17-12(b) (expressly making the Review Board of the
      Indiana Department of Workforce Development a party appellee in every appeal of the review board’s
      decision).
      2
          We rely on many of the facts set out in Vectren I.


      Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017                    Page 4 of 22
      issuance of a CPCN to construct, install, and use clean coal technology (CCT). 3

      Among other projects,4 Vectren requested approval for a soda ash injection

      system for sulfur trioxide (SO3) mitigation at Brown units 1 and 2 and a

      hydrated lime injection system for SO3 mitigation at Culley unit 3.


[7]   In April 2014, Intervenors intervened in the IURC proceedings and opposed

      Vectren’s petition.5 Intervenors contended that Vectren should replace all or

      some of the units with new electricity-generating sources (such as, natural gas,

      wind, or solar) instead of retrofitting the existing coal units. According to

      Intervenors, this would be more cost-effective for Vectren’s customers over the

      long run.


[8]   The dispute between Vectren and Intervenors became a battle of experts.

      Vectren hired the engineering firm Black & Veatch (B & V) to compare the total

      ratepayer cost and relative risk of the proposed modifications versus the cost

      and risks associated with retiring and replacing the noncompliant units.

               B & V’s report found that the only feasible plans to meet
               environmental regulations were (1) replacing one or more of



      3
        Vectren also requested approval of certain financial incentives and approval to defer project costs, including
      depreciation and operations and maintenance expenses, for a period up to December 31, 2020. Approval of
      these financial requests is not at issue in this appeal.
      4
        The other projects addressed mercury emissions. Although the IURC’s approval of these projects was at
      issue in Vectren I, it is not here.
      5
        The Indiana Office of Utility Consumer Counselor (OUCC) initially opposed Vectren’s petition also. After
      reviewing additional information provided by Vectren, the OUCC eventually withdrew its opposition. The
      OUCC indicated to the IURC that it believed the proposed projects were appropriate and that it would
      support approval of all projects if the IURC determined that the modeling assumptions and analyses showed
      that the plan was reasonable.

      Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017                        Page 5 of 22
               Vectren’s current units with new natural gas-powered facilities
               and retiring the remaining facilities, or (2) upgrading the current
               coal-powered facilities. B & V evaluated twenty-one potential
               scenarios involving various gas-powered replacement options and
               a range of potential market and environmental scenarios. B & V
               concluded that of the twenty-one scenarios, only one offered a
               small savings over the Mandated Projects proposal. B & V found
               that the cost savings under this one scenario were “marginal” and
               conditional on a future market scenario with low natural gas
               prices and high carbon prices. Accordingly, B & V concluded
               that Vectren’s plan to modify the existing facilities was the best
               option in terms of cost to ratepayers.


       Id. at 487 (record cite omitted).


[9]    Intervenors submitted testimony of their expert, Dr. Jeremy I. Fisher, who felt

       that the 10-year period used in B & V’s analysis was too short to capture

       accurate long-term costs and risks associated with the proposal and that using a

       20-year model would be more appropriate. Dr. Fisher maintained that, under a

       20-year analysis, natural gas-powered generators would be more cost efficient.

       He also noted other errors he believed B & V committed in its economic

       modeling, including the exclusion of wholesale capacity and energy sales.


[10]   Vectren’s President and CEO, Carl L. Chapman, disagreed that Vectren should

       retire 85% of its generation facilities and opined that this was a riskier approach.

       He testified that capacity constraints, market conditions, and economic growth

       would create tremendous risk. He also noted that there would be significant

       costs left undepreciated from prior investments in the units (stranded costs). On

       the other hand, according to Chapman, Vectren’s proposed projects afforded


       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017   Page 6 of 22
       flexibility to respond to changing market conditions, reliable capacity, and full

       depreciation of stranded costs.


[11]   Wayne D. Games, Vice President of Power Supply at Vectren, testified that a

       20-year analysis skews the economic modeling. He also indicated that it would

       take 4 years to construct replacement generation and, in the meantime,

       customers would be exposed to market and reliability risks.


[12]   Despite the criticisms of Dr. Fisher, J. Neil Copeland of B & V continued to

       maintain that a 10-year model was prudent. He also disputed Dr. Fisher’s

       contentions of analytical errors in B & V’s model and noted problems with Dr.

       Fisher’s 20-year analysis. Further, Copeland indicated that the cost differences

       between the alternatives were fairly small and opined that decisions about

       future generations should not be made solely on these small differences. He

       noted the importance of management judgment and consideration of risks of

       capacity shortages.


[13]   On January 28, 2015, the IURC issued an order (the First Order) approving

       Vectren’s petition in total. The order is lengthy but only a portion of it is

       relevant to this appeal. After setting out in detail the evidence presented by the

       parties, the IURC issued the following relevant discussion and findings:


               C. Deferred Recovery under Ind. Code ch. 8-1-8.8. Under Ind.
               Code § 8-1-8.8-11(a)(5), the Commission can authorize other
               financial incentives that it considers appropriate for clean energy
               projects only if the projects are found to be reasonable and
               necessary.


       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017   Page 7 of 22
        Vectren submitted evidence showing that failure to comply with
        the federally mandated requirements would require Vectren to
        retire Brown, Culley, and Warrick, which make up
        approximately 85% of its baseload generation, in 2015. The
        Mandated Projects will enable the continued operation of the
        facilities for at least the next ten years and continued service to
        Vectren’s customers.


        Vectren evaluated several alternative compliance technologies
        that would allow the Brown, Culley, and Warrick units to
        comply with pollution limits....


        Vectren hired Black & Veatch to further evaluate the most
        promising technologies and consider alternatives for bringing its
        generation fleet in compliance with federal regulations....


                                                  ***


        Vectren also considered whether the continued operation of
        Brown units 1 and 2, Culley unit 3, and Warrick unit 4 was the
        best option. Vectren submitted production cost modeling
        supporting its plan to continue investing in, rather than retire,
        Brown, Culley, and Warrick. Specifically, Vectren presented a
        ten-year production cost model using PROMOD IV prepared by
        Black & Veatch. Vectren also engaged Burns & McDonnell to
        conduct an analysis over a 20-year period to respond to concerns
        by the Joint Intervenors and OUCC.


        The evidence presented by Vectren shows that failure to complete
        the Mandated Projects could require the premature retirement of
        the related generation facilities, which would result in significant
        reliability, market, and regulatory risk. MISO is projecting
        capacity shortfalls as early as 2016 and constructing a new gas
        generation facility would take at least four years. Without the
        ability to obtain voltage support from distant generators to serve

Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017   Page 8 of 22
               its territory, Vectren would be forced to purchase capacity in an
               already constrained market. All of these factors point to
               concerns that retirement of Brown and Culley would expose
               Vectren’s customers to significant reliability risks. Based on the
               evidence presented, we find that the Mandated Projects are
               reasonable and necessary.


       Appellants’ Appendix at 20-21.


[14]   Intervenors appealed the First Order arguing that the IURC “failed to make

       necessary findings on (1) facts material to its determination of the issues and (2)

       statutory factors required to be addressed prior to authorizing the use of clean

       coal technology.” Vectren I, 45 N.E.3d at 485. Intervenors appealed the

       approval of all of Vectren’s proposed projects.


[15]   We issued our opinion in Vectren I on October 29, 2015. After a thorough

       review of relevant Indiana utility and CCT statutes, we determined that two of

       the proposed projects – those using injection systems designed to mitigate sulfur

       emissions – required issuance of a CPCN under I.C. chapter 8-1-8.7.6 In its

       First Order, however, the IURC based its decision to approve all of the projects

       on I.C. chapters 8-1-8.4 and 8.8.7 In light of this error, we remanded on a

       limited basis and instructed:




       6
        The projects concerning mercury emissions are not considered CCT projects for purposes of Chapter 8.7
       because they do not reduce airborne emissions of sulfur or nitrogen based pollutants. Id. at 496.
       7
         We noted, “a finding that the projects were reasonable and necessary under Chapter 8.8 does not change
       the fact that Vectren was required to obtain a CPCN before using new CCT and that the Commission was
       required to make findings under Chapter 8.7 before granting a CPCN thereunder.” Vectren I, 45 N.E.3d at

       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017                   Page 9 of 22
               Vectren may not use CCT (as defined in Chapter 8.7) until the
               Commission issues them a CPCN under Indiana Code section 8-
               1-8.7-3. On remand, the Commission shall make findings on the
               factors listed in Section 8-1-8.7-3(b) regarding the soda ash and
               hydrated lime injection systems which qualify as CCT under
               Chapter 8.7 and, based on those findings, determine whether
               those systems serve public convenience and necessity.


       Vectren I, 45 N.E.3d at 498.


[16]   On February 12, 2016, Intervenors filed a petition to reopen the evidentiary

       record, asserting material changes of fact since the close of the evidentiary

       hearing. Vectren objected to this petition.


[17]   The IURC issued its order on remand (the Second Order) on June 22, 2016.

       After denying Intervenors’ request to reopen the record, the IURC made

       findings with respect to I.C. § 8-1-8.7-3(b):

               Under Ind. Code § 8-1-8.7-3(b), the Commission shall issue a
               CPCN if it finds that a clean coal technology project offers
               substantial potential to reduce sulfur or nitrogen based pollutants
               in a more efficient manner than conventional technologies in
               general use as of January 1, 1989. When determining whether to
               grant a CPCN, the Commission must consider specific factors,
               which are addressed below.


               A. The costs for constructing, implementing, and using CCT
                  compared to the costs for conventional emission reduction
                  facilities. Vectren estimated the costs for all projects



       495. Additionally, we concluded that “a CPCN granted under Chapter 8.4 would not be sufficient to satisfy
       the CPCN requirement of Chapter 8.7.” Id. at 497.

       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017                 Page 10 of 22
              approved in [this cause] to be in the range of $75-$95 million.
              Vectren supplied a breakdown of the estimated costs by
              project as a confidential filing, which includes the estimated
              costs for the Brown and Culley Projects. No party disputed
              the estimated costs.


              Ms. Fischer[8] testified that Black and Veatch considered
              several alternative technologies, including fuel switching, coal
              washing, boiler flue gas temperature control, furnace sorbent
              injection, and others. Ms. Fischer further testified that the
              Brown and Culley Projects were selected because the
              preliminary screening showed them to be the most cost
              effective. The evidence presented sufficiently describes the
              Mandated Projects Costs and demonstrates that the
              components of the Mandated Projects offer substantial
              potential to cost-effectively reduce pollutants.


          B. Whether a CCT project will extend the useful life of an
             existing electric generating facility and the value of that
             extension. Mr. Games testified that the Brown and Culley
             Units have not reached the end of their useful lives. He said
             that the Brown and Culley Projects are necessary to resolve
             the [NOV] issued by the [EPA] and to allow the continued
             operation of the Brown and Culley Units. Mr. Chapman
             testified that the Brown and Culley Projects would extend the
             useful lives of Vectren’s plant for another ten years, allowing
             Vectren to fully depreciate its prior capital investments in
             emission controls and to avoid stranded costs.


          C. The potential reduction of sulfur and nitrogen based
             pollutants achieved by the proposed CCT system. Mr.
             Games testified that under the NOV, Vectren has agreed to



8
    Diane Fischer testified as the Air Quality Control Services Leader in the Energy Division at B & V.


Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017                     Page 11 of 22
             install sodium-based sulfur trioxide (“SO3”) mitigation
             systems on both Brown Units. The systems will reduce
             sulfuric acid (“H2SO4”) emissions to 0.008 lb/mmbtu (pounds
             per million British thermal units) on Brown Unit 1 and 0.010
             lb/mmbtu on Brown Unit 2. Vectren has also agreed to
             install a SO3 mitigation system on Culley Unit 3, which will
             reduce H2SO4 emissions to 0.009 lb/mmbtu.


        D. The reduction of sulfur and nitrogen based pollutants that
          can be achieved by conventional pollution control
          equipment. Mr. Games testified that soda ash injection
          (Brown Units) and hydrated lime injection (Culley Unit) are
          required for SO3 mitigation. There is no evidence that any
          conventional pollution control equipment could achieve the
          necessary SO3 reductions. Vectren analyzed several
          alternative technologies and fuel sources to achieve the
          necessary SO3 reductions, but that analysis focused primarily
          on the economic impact of the scenarios.


        E. Federal sulfur and nitrogen based pollutant emission
           standards. Mrs. Retherford[9] testified that Vectren received
           an NOV from the EPA alleging that Vectren failed to acquire
           Prevention of Significant Deterioration (“PSD”) construction
           permits prior to construction of the SCRs to address small
           incremental increases in incidental SO3 emissions caused by
           operation of the SCRs, and a CAA §114 Information Request
           related to the 2003 Culley Consent Decree. Vectren and the
           EPA have reached a settlement in principle to resolve the
           outstanding compliance allegations brought by the EPA in the




9
  Angela Retherford testified as Vice President of Environmental Affairs and Corporate Sustainability at
Vectren.

Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017                   Page 12 of 22
             NOV and the CAA §114 Information Request that requires
             the Culley and Brown Air Projects.


        F. The likelihood of success of the proposed project. Ms.
           Fischer described the Phase 1 Technology Demonstration of
           the Brown and Culley Projects. At Brown, Black & Veatch
           used a temporary soda ash injection system, which treated
           100% of the flue gas on Unit 1. The soda ash injection
           reagent flow rate, process data, and stack gas outlet
           measurements were all collected, and the data obtained
           allowed Black & Veatch to determine the optimum amount of
           soda ash that should be injected to balance sorbent
           consumption, mercury reduction, and NsSO4 mist reduction.


             Ms. Fischer testified that at Culley, highly reactive hydrated
             lime was injected at the inlet and outlet of the particulate
             matter removal device. Black & Veatch performed the test at
             different injection rates to evaluate the effect of the amount of
             hydrated lime injection on H2SO4 mist removal. As with
             Brown, the data obtained allowed Black & Veatch to
             determine the necessary sizing of the lime injection system.


        G. The cost and feasibility of retirement of an existing electric
          generating facility. Mr. Games testified that Vectren hired
          Burns & McDonald and Black & Veatch to analyze
          alternative generation options to retrofitting Brown Units 1
          and 2 and Culley Unit 3. The analysis included both the
          variable operating costs of the proposed alternatives and the
          annual fixed charge required to recover capital costs and fixed
          operating costs under various capacity scenarios. In addition,
          the analysis considered that the Brown and Culley Units are
          base load units; so any replacement technology must be able
          to supply the necessary capacity to meet the MISO-required
          Planning Reserve Margin.



Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017   Page 13 of 22
             The analysis considered 20 commercial generating
             technologies, including seven natural gas options, battery
             storage, compressed air, wind, solar, hydro, nuclear, wood,
             landfill gas, and coal. Of those options, Black & Veatch
             identified two, a 200 MW, Class F natural gas fired
             generation facility and a 300 MW natural gas fired combined
             cycle generation facility, as the most practical options. The
             other options were determined to be infeasible due to cost,
             size, or environmental reasons.


             Black & Veatch compared the two replacement options to the
             retrofitting option on the basis of total customer cost and
             relative risk. The analysis was run under three separate
             market scenarios and adjusted to those scenarios for variables
             including natural gas costs and carbon costs. The analysis
             compared 21 different replacement scenarios to the retrofitting
             option, and in every scenario except one, the analysis
             demonstrated that retrofitting was the lowest cost alternative.
             The only scenario that favored replacement, was a low
             natural gas and high carbon cost scenario that showed a 2.2%
             benefit by replacing Brown Units 1 and 2 with a combined
             cycle natural gas facility.


        H. The dispatching priority for the facility utilizing CCT,
          considering direct fuel costs, revenues, and expenses of the
          utility, and environmental factors associated with
          byproducts resulting from the utilization of the CCT. Mr.
          Games testified that any changes in dispatching priority will
          depend on future regulations, fuel costs, and future load
          growth. He said that the additional variable production costs
          of using additives to reduce SO3 emissions will increase the
          cost to generate a MW of electricity, but that Black &
          Veatch’s analysis shows that replacing the Brown and Culley
          Units would be a more expensive option.



Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017   Page 14 of 22
             Mr. Games also testified that the Brown and Culley Projects
             will allow for the continued reuse of the fly ash from the
             Brown and Culley Units for the production of cement and
             gypsum wall board. Mr. Games said that while Vectren is not
             paid for the fly ash, the reuse is beneficial to customers
             because Vectren avoids disposal costs.


        I. Any other factors the Commission considers relevant,
           including whether the construction, implementation, and
           use of CCT is in the public’s interest. Mr. Games testified
           that Vectren cannot continue to operate the Brown and Culley
           Units without investing in additional pollution control
           equipment to comply with the NOV. Vectren has evaluated
           alternative technologies and the possibility of retiring the units
           and identified the Brown and Culley Projects as the lowest
           cost alternative. Retiring the Brown and Culley Units would
           retire 76% of Vectren’s coal-fired base load, which would
           require Vectren to construct new generation facilities to
           replace the capacity or to purchase capacity on the open
           market. Market Purchases would also place a large
           percentage of Vectren’s base load energy need outside of its
           direct control. Because the Brown and Culley Units have not
           reached the end of their useful lives, retiring them early would
           result in significant stranded costs. In addition, Vectren
           would experience stranded costs related to infrastructure in
           place to capture, store, and transport fly ash for reuse. For
           these reasons, we find that it is in the public interest for
           Vectren to install the Brown and Culley Projects.


        J. Conclusion. Based on our analysis of the factors required by
           Ind. Code § 8-1-8.7-3(b), we find that public convenience and
           necessity will be served by the use of CCT, specifically the
           Brown and Culley Projects, on Brown Units 1 and 2 and
           Culley Unit 3. In our January 28, 2015 Order in this Cause,
           we approved the estimated costs, and found that Brown Units
           1 and 2 and Culley Unit 3 will continue to utilize Indiana coal

Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017   Page 15 of 22
                       as their primary fuel, specifically coal [] sourced from the
                       Illinois Basin. Therefore, we issue a CPCN to Vectren for the
                       Brown and Culley Projects.


       Id. at 8-11.10 Intervenors appeal from this order.


                                                 Discussion & Decision


                                                    Standard of Review


[18]   The General Assembly created the IURC primarily as a 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 IURC’s goal is to ensure that public utilities provide constant,

       reliable, and efficient service to the citizens of Indiana. Id. An order from the

       IURC is presumed valid unless the contrary is clearly apparent. Citizens Action

       Coal. of Ind., Inc. v. N. Ind. Pub. Serv. Co., 485 N.E.2d 610, 612 (Ind. 1985).


[19]   The standard for our review of decisions of the IURC is governed by I.C. § 8-1-

       3-1, which our courts have interpreted as providing a tiered standard of review.


                  A multiple-tier standard of review is applicable to the IURC’s
                  orders. A court on review must inquire whether specific findings
                  exist as to all factual determinations material to the ultimate
                  conclusions; whether substantial evidence within the record as a




       10
            Headings A through I directly correspond with the factors listed in I.C. § 8-1-8.7-3(b).


       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017                    Page 16 of 22
               whole supports the findings of fact; and whether the decision,
               ruling, or order is contrary to law.


       Vectren I, 45 N.E.3d at 491. In applying this standard, “[w]e review the

       conclusions of ultimate facts, or mixed questions of fact and law, for their

       reasonableness, with greater deference to matters within the IURC’s expertise

       and jurisdiction.” Citizens Action Coal. of Ind., Inc. v. Duke Energy Ind., Inc., 16

       N.E.3d 449, 457 (Ind. Ct. App. 2014). Additionally, “[w]e neither reweigh the

       evidence nor assess the credibility of witnesses and consider only the evidence

       most favorable to the IURC’s findings.” Ind. Gas Co., Inc. v. Ind. Fin. Auth., 999

       N.E.2d 63, 66 (Ind. 2013). On matters within its jurisdiction, the IURC enjoys

       wide discretion and its findings and decision will not be lightly overridden

       simply because we might reach a different decision on the same evidence.

       Vectren I, 45 N.E.3d at 491.


                                     Adequacy of Findings on Remand


[20]   Intervenors challenge the adequacy of the IURC’s findings on remand, arguing

       that they are not adequately explained, are arbitrary and capricious, and are not

       supported by substantial evidence. Their grievance stems from the notion that

       the IURC failed to consider any evidence other than Vectren’s pre-filed direct

       testimony. Had the IURC considered the other evidence, according to

       Intervenors, it would have concluded that the long-term cost of installing

       pollution controls on the existing units would be more than the cost of building

       new natural gas plants and retiring existing coal-fired units.


       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017   Page 17 of 22
[21]   Initially, we observe that the First Order remained intact after Vectren I. This

       order contained a detailed summary of the evidence presented by the parties,

       which included over 2000 pages of written testimony and exhibits and two days

       of live testimony. Although the IURC considered the voluminous evidence on

       both sides, it based its ultimate decision and findings in the First Order

       primarily on Vectren’s evidence. For example, in finding the proposed projects

       to be reasonable and necessary, the IURC expressly relied upon the evidence

       presented by Vectren, including Games’s testimony and the B & V 10-year

       model. The IURC’s reliance on the B & V model indicates that Vectren won

       the battle of the experts in the First Order.


[22]   In Vectren I, we did not reverse the First Order. Rather, we did nothing more

       than remand for additional findings with regard to two of the proposed projects.

       We directed the IURC to make findings on the nine statutory factors listed in

       I.C. § 8-1-8.7-3(b) and balance these factors to determine whether to grant a

       CPCN. The IURC did just that.


[23]   We cannot agree with Intervenors that, on remand, the IURC was required to

       consider the expert testimony regarding the cost models anew. Further,

       Intervenors’ assertion that Copeland abandoned his original B & V 10-year

       analysis for a “corrected analysis” at the hearing is a mischaracterization of the

       evidence. Appellants’ Brief at 21. At the hearing, Copeland steadfastly stood by

       his opinion that a 10-year analysis was more appropriate than a 20-year




       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017   Page 18 of 22
       analysis.11 Further, to the extent he adjusted the assumptions used in his 10-

       year model to reflect Dr. Fisher’s assumptions, Copeland testified that he was

       “not totally in agreement” with the assumptions.12 Id. at 374. Additionally,

       Copeland testified that the revised results should “absolutely not” change

       Vectren’s conclusions on the proposed compliance plan. Id. at 373. He noted

       that “changes in the variable costs can change the outcome very easily” and

       given the “uncertainty in the future, [he] would not think it would be prudent to

       make an $800 million fixed cost investment”. Id. at 374.


[24]   Intervenors’ arguments amount, essentially, to a claim that the IURC credited

       the wrong expert testimony. This is an improper contention on appeal, as it

       requires a reweighing of the evidence. There is substantial evidence in the

       record to support the IURC’s findings regarding the cost effectiveness of the

       proposed projects as compared to retirement of the existing units. Moreover,

       the cost analysis was not the sole basis of the IURC’s decision to issue the

       CPCN to Vectren. The IURC issued specific findings on all nine statutory

       factors as set out above, many of which had nothing to do with the cost




       11
            Copeland testified in this regard:

                [T]he original analysis was done on ten years, and I feel very confident with that given the
                uncertainty we could see in the future, and because we don’t know exactly what the future looks
                like, we felt like it was prudent to look at a ten-year analysis, and we still stand by that.
       Transcript at 377.
       12
         Regarding the addition of capacity sales to his model, Copeland testified that he did not believe it is
       appropriate to include revenue from excess capacity sales. He was then asked why he included this
       assumption in his revised model. Copeland responded, “I was responding to Dr. Fisher’s comments about
       capacity sales not being included and wanted to analyze the impact if those were added in there.” Id. at 214.

       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017                     Page 19 of 22
       analysis. Based on its consideration of all of these factors, the IURC

       determined that public convenience and necessity will be served by the use of

       CCT at Brown Units 1 and 2 and Culley Unit 3. Intervenors have failed to

       establish that the IURC abused the broad discretion granted it.


                                               Petition to Reopen Record


[25]   Intervenors argue that the IURC erred by declining to reopen the record on

       remand to hear additional evidence. With their petition, Intervenors attached

       evidence purporting to show that the existing units would face higher costs than

       originally assumed and the cost to run new plants would be lower. Other

       evidence submitted indicated that the projections of a capacity deficit in the

       region were no longer accurate.


[26]   The IURC denied the petition as follows:

                  170 IAC 1-1.1-22 allows a party to move to reopen the record[13]
                  “At any time after the record is closed, but before a final order is
                  issued.” The Commission has already issued a final order based


       13
            In petitioning to reopen the record, the petitioner

                must set forth clearly the facts claimed to constitute grounds requiring reopening of the
                proceedings, including the following:
                (1) Material changes of fact or law alleged to have occurred since the conclusion of the hearing.
                (2) The reason or reasons such changes of fact or law could not have been reasonably foreseen
                    by the moving party prior to the closing of the record.
                (3) A statement of how such changes of fact or law purportedly would affect the outcome of
                    the proceeding if received into evidence.
                (4) A showing that such evidence will not be merely cumulative.
       170 Ind. Admin. Code 1-1.1-22(b). While it sets out the requirements of such a petition, 170 I.A.C. 1-
       1.1-22 does not establish a standard of review. Accordingly, we conclude that the determination of
       whether to grant or deny a petition to reopen the record is within the IURC’s sound discretion.

       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017                         Page 20 of 22
               on the evidentiary hearing in this Cause. Although the Court of
               Appeals remanded the final order for the Commission to
               consider the limited issue of whether a CPCN should be issued
               for the proposed soda ash and hydrated lime injection systems,
               the court did not instruct the Commission to receive additional
               evidence; nor did it bar the Commission from receiving
               additional evidence if necessary. Therefore, it is within the
               Commission’s discretion to determine whether the record should
               be reopened to receive additional evidence.


               In this case, we find that there is sufficient evidence in the
               evidentiary record to make the required findings under Ind. Code
               § 8-1-8.7-3. [Intervenors], in asserting that new evidence might
               change the original analysis, amounts to a request that the
               Commission engage in hindsight review, which we decline to do.
               Therefore, the Motion is denied.


       Appellants’ Appendix at 8.


[27]   In its First Order, the IURC granted Vectren’s petition for approval of all the

       proposed projects. In Vectren I, this court did not reverse the First Order but

       simply remanded the case for additional findings with respect to two of the

       projects. Given the volatile utility market, the cost analyses and facts on which

       the First Order was based were sure to change over time (i.e., while the First

       Order was being appealed) but this is no reason to require the IURC to reopen

       the evidence and re-litigate the case with respect to the two remaining projects.


[28]   Under the circumstances presented here, we conclude that the IURC did not

       abuse its discretion by denying the petition to reopen the record. There was

       ample evidence in the record from which the IURC could evaluate the statutory


       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017   Page 21 of 22
       factors on remand, and thus there was no need for additional evidence. See

       Citizens Action Coal. of Ind., Inc. v. Duke Energy Ind., Inc., 44 N.E.3d 98, 110 (Ind.

       Ct. App. 2015).


[29]   Affirmed.


       Riley, J. and Crone, J., concur.




       Court of Appeals of Indiana | Opinion 93A02-1607-EX-1637 | February 14, 2017   Page 22 of 22
