Citizens Indus. v. Heartland Gas Pipeline

• Decision Date: 09 November 2006
• Docket Number: No. 93A02-0601-EX-42.,93A02-0601-EX-42.
• Parties: CITIZENS INDUSTRIAL GROUP, Appellant-Intervenor, v. HEARTLAND GAS PIPELINE, LLC, et al, Appellees-Petitioners and statutory party.
• Court: Indiana Appellate Court

856 N.E.2d 734

CITIZENS INDUSTRIAL GROUP, Appellant-Intervenor, v. HEARTLAND GAS PIPELINE, LLC, et al, Appellees-Petitioners and statutory party.

No. 93A02-0601-EX-42.

Court of Appeals of Indiana.

November 9, 2006.

John F. Wickes, Jr., Todd A. Richardson, Jennifer Wheeler Terry, Lewis & Kappes, Indianapolis, IN, Attorneys for Appellant.

Daniel W. McGill, Barnes & Thornburg LLP, Indianapolis, IN, Attorney for Heartland Gas Pipeline, LLC.

Michael B. Cracraft, Hackman Hulett & Cracraft, LLP, Indianapolis, IN, Attorney for Citizens Gas & Coke Utility.

OPINION

MATHIAS, Judge.

Heartland Gas Pipeline, LLC ("Heartland") and Board of Directors for Utilities of the Department of Public Utilities of Indianapolis, d/b/a/ Citizens Gas & Coke Utility ("Citizens Gas"), filed a petition with the Indiana Utility Regulatory Commission ("IURC") seeking, among other things, approval of a proposed transfer of storage capacity to Heartland. The IURC approved the proposal. Citizens Industrial Group ("CIG"), an ad hoc group of industrial customers, now appeals, arguing that the approved proposal violates a previous settlement agreement. Concluding that CIG did not file a timely appeal under the appellate rules, we dismiss.

Facts and Procedural History

This appeal concerns the participants in the partially deregulated natural gas market. In the early 1990s, the federal government began deregulating the natural gas industry in order to prevent monopolies over interstate pipelines, to increase competition and to lower costs. As a result, transportation of gas was "unbundled" from the sale of gas, which allowed consumers to buy gas and pipeline access to transport the gas separately. Gen. Motors Corp. v. Tracy, 519 U.S. 278, 284, 117 S.Ct. 811, 136 L.Ed.2d 761 (1997). Many publicly owned utilities, like Citizens Gas, then created subsidiaries to focus on creating and managing sales transactions portfolios that would allow the public utilities to obtain the best rates for each now unbundled part of the natural gas supply chain.

Citizens Gas is a municipally owned utility that provides natural gas service to approximately 265,620 residential, commercial, and industrial customers in and around Marion County, Indiana. In 1996, following the deregulation of the natural gas industry, Citizens Gas and what is today known as Vectren Corporation jointly formed ProLiance Energy LLC ("ProLiance") to manage the public utilities' natural gas supply contracts. U.S. Gypsum, Inc. v. Ind. Gas Co., 735 N.E.2d 790, 794 (Ind.2000). In U.S. Gypsum, the Indiana Supreme Court upheld the IURC's approval of the creation of ProLiance. Since that time, ProLiance has provided Citizens Gas with wholesale gas supply and interstate pipeline transportation service based upon Citizens Gas's demand forecast.

After the supreme court's decision in U.S. Gypsum, the Indiana Office of the Utility Consumer Counselor ("OUCC"), the Board of Directors for Utilities of the Department of Public Utilities of the City of Indianapolis, and Citizens Gas negotiated a set of guidelines to govern the relationships between Citizens Gas and its affiliates. Generally, these guidelines were set forth to prevent Citizens Gas from favoring its affiliates that are not regulated by the IURC, such as ProLiance. The signatories to the Affiliate Guidelines agreed that the guidelines would be approved and enforced by the IURC.

On September 30, 2004, Citizens Gas filed a petition with the IURC for approval of an agreement that would provide certain storage services to Heartland from the underground storage field ("UGS") that it owns and operates in Greene County, Indiana. Citizens By-Products Coal Company (a wholly-owned subsidiary of Citizens Gas) and ProLiance Transportation & Storage-Heartland LLC (a wholly-owned subsidiary of ProLiance) had created Heartland as a joint venture specifically for what it has termed the "Heartland Project."

On the same day that Citizens Gas filed its petition, Heartland filed a petition with the IURC for a certificate of public convenience and necessity and indeterminate permit for the construction of a natural gas pipeline, approval for transportation and storage agreements, and approval of a Gas Tariff applicable to its transportation and storage services. Part of this request sought the IURC's approval for transfer of the storage capacity it would receive from Citizens Gas in the Greene County UGS to ProLiance, Citizens Gas's affiliate.

Heartland filed a motion on October 8, 2004, to consolidate these two causes, which the IURC granted on November 3, 2004. On March 17, 2005, an ad hoc group of industrial customers known as the Citizens Industrial Group ("CIG") filed a petition to intervene. The IURC held a hearing on the matter on April 21 and 22, 2005. On October 5, 2005, the IURC issued its Order, granting all of the regulatory approvals sought by Heartland and Citizens Gas. In its decision, the IURC found that the Heartland Project was in the public interest as the new pipeline would allow greater diversity of natural gas supply, which would provide cost savings to Citizens Gas and its customers. The IURC further found that the storage service agreement would allow the public to realize immediate benefits from the improved utilization of Citizens Gas's UGS, as well as serving to finance the construction of the pipeline. It found that the storage agreement did not violate the Affiliate Guidelines as Heartland would be a fully-regulated Indiana public utility subject to the continuing oversight of the IURC, and therefore not an "affiliate" as defined by the guidelines.

On October 25, 2005, CIG filed a Petition for Partial Reconsideration under Indiana Administrative Code title 170, r. 1-1.1-22(e) (2000), seeking reconsideration solely on the issue of whether the underground storage transfer to Heartland and subsequently to ProLiance violated the Affiliate Guidelines. Heartland and Citizens Gas filed a response on November 4, 2005, and CIG then filed a reply on November 14, 2005. The IURC denied CIG's petition on December 21, 2005, finding that CIG's petition was repetitious of the arguments it had already presented during the hearing.

CIG filed a notice of appeal on January 20, 2006. Heartland and Citizens Gas filed a joint motion to dismiss the appeal on the following February 10th, arguing that CIG had failed to file a timely notice of appeal. On March 21, 2006, our motions panel summarily denied Heartland and Citizens Gas's motion to dismiss. Additional facts will be provided as necessary.

Discussion and Decision

Heartland and Citizens Gas contend that this appeal should have been dismissed, as CIG's notice of appeal was untimely filed. Even though our motions panel has already ruled on this jurisdictional issue, Heartland and Citizens Gas are not precluded from presenting their arguments to us. Smith v. Deem, 834 N.E.2d 1100, 1103 (Ind.Ct.App.2005), trans. denied. "It is well established that we may reconsider a ruling by the motions panel." Cincinnati Ins. Co. v. Young, 852 N.E.2d 8, 12 (Ind.Ct.App.2006). However, "we decline to do so in the absence of clear authority establishing that it erred as a matter of law." Oxford Fin. Group, Ltd. v. Evans, 795 N.E.2d 1135, 1141 (Ind.Ct. App.2003). As this issue pertains to whether we can address the merits of CIG's claim, we first address the timeliness of CIG's notice of appeal as a threshold matter.

Heartland and Citizens Gas argue that Indiana Appellate Rule 9(A)(3) makes no provision for extending the thirty-day time limit for filing a notice of appeal to account for an administrative agency's reconsideration process. Advancing this proposition, they conclude that because CIG waited to file its notice of appeal until January 20, 2006, nearly three months after the date of the IURC's order, CIG failed to file a timely notice of appeal.

We note that in general civil practice a motion to reconsider does not toll the time period within which an appellant must file a notice of appeal. Trial Rule 53.4 provides:

[A repetitive motion or a motion to reconsider orders or...