Indiana & Michigan Elec. Co. v. Public Service Com'n, B-K
| Decision Date | 29 July 1986 |
| Docket Number | No. 2-1284-A-390,B-K,2-1284-A-390 |
| Citation | 495 N.E.2d 779 |
| Parties | INDIANA & MICHIGAN ELECTRIC COMPANY, Indiana Statewide Association of Rural Electric Cooperatives, Inc., Indianapolis Power & Light Company, Northern Indiana Public Service Company, Public Service Company of Indiana, Inc., and Southern Indiana Gas and Electric Company, Appellants, v. PUBLIC SERVICE COMMISSION of the State of Indiana, Office of the Utility Consumer Counselor, Daniel P. Coyle, Tanglewood Ent., Graham A. Richard, A.E. Staley Mfg. Co., Naturalized Energy Systems, Indiana Gas Co., Inc., Tom Gabhart d/b/a Cogen, Inc., Osborne Drilling, Inc., Bethlehem Steel Company, Kaiser Aluminum & Chemical Corp., Karen Mitchner d/b/aAssociates, David E. Warpenburg, Indiana Municipal Power Agency, Cogeneration Systems, Inc., Eli Lilly and Company, F.D. McCrary, Marjorie I. Cullison d/b/a C. & C. Enterprises, Air Dynamics, AES Wind Turbins, Franklin Supply, Nancy C. Day, H & K Enterprises, Geupal DeMars, Inc., City of Richmond d/b/a Richmond Power & Light, Logansport Municipal Electric Dept., City of Fort Wayne, City of South Bend, Amoco Oil Co. and Hydro Consultant, Appellees. |
| Court | Indiana Appellate Court |
Jerry P. Belknap, Richard E. Deer, Barnes & Thornburg, Indianapolis, for appellants Ind. & Mich. Elec. Co., Ind. Statewide Ass'n of Rural Elec. Coop., Inc., Indianapolis Power & Light Co., Northern Ind. Public Service Co., Public Service Co. of Ind., Inc., and Southern Ind. Gas and Elec. Co.
Linley E. Pearson, Robert K. Johnson, Office of Atty. Gen., Indianapolis, for appellees Public Service Com'n of State of Ind.
Jan E. Helbert, Deputy Utility Consumer Counselor, Indianapolis, for Office of Utility Consumer Counselor.
Ronald E. Prater, Fort Wayne, for Ind. & Mich. Elec. Co.
David S. Richey, Parr, Richey, Obremskey & Morton, Lebanon, for Ind. Statewide Ass'n of Rural Elec. Cooperatives, Inc.
Marcus E. Woods, Indianapolis, for Indianapolis Power & Light Co.
Frederick F. Eichhorn, Jr., Eichhorn, Eichhorn & Link, Hammond, for Northern Ind. Public Service Co.
Duejean C. Garrett, Plainfield, for Public Service Co. of Ind., Inc.
George A. Porch, Bamberger, Foreman, Oswald & Hahn, Evansville, for Southern Ind. Gas and Elec. Co.
Robert L. Hartley, Martin, Wade, Hartley & Hollingsworth, Indianapolis, Glenn Berger, Skadden, Arps, Slate & Meagher, Washington, D.C., for Bethlehem Steel Co.
Michael J. Huston, Baker & Daniels, Indianapolis, for Eli Lilly and Co.
James McClarnon, Smith, Morgan & Ryan, Indianapolis, for Ind. Municipal Power Agency.
Robert Thompson, Fort Wayne, for City of Fort Wayne.
Eugenia S. Schwarts, City Atty's. Office, South Bend, for City of South Bend.
Stan B. Hirsch, Haymaker, Hirsch & Fink, Indianapolis, for City of Richmond, Ind. d/b/a Richmond Power & Light Logansport Municipal Elec. Dept.
Vern Partenheimer, Hall, Partenheimer & Kinkle, Princeton, for F.D. McCrary.
W. Paul Helmke, Jr., Fort Wayne, for Cogeneration Systems, Inc.
Appellants, Indiana & Michigan Electric Company, et al. (Electric Utilities), petitioned this court to grant rehearing with respect to our decision of May 7, 1986. Indiana & Michigan Electric Company, et al. v. Public Service Commission, et al. (1986) Ind.App., 492 N.E.2d 323. We deem it appropriate to consider the petition for the limited purpose of addressing certain of Electric Utilities' misconceptions regarding our original decision.
Electric Utilities assert that our decision dismissing the appeal is erroneous and conflicts with ruling precedent. Specifically, Electric Utilities argue that pursuant to Boone County R.E.M.C., et al. v. Public Service Commission (1958) 129 Ind.App. 175, 155 N.E.2d 149, and Cities & Towns of Anderson v. Public Service Commission (1979) 2d Dist., Ind.App., 397 N.E.2d 303, this court may assert jurisdiction to review Commission orders entered in rule-making (non-adjudicatory) proceedings.
While a cursory reading of the cited cases might lead to such conclusion, a careful examination of the decisions reveals an important distinction.
In Boone County R.E.M.C., supra, the REMCs challenged an ex parte order by the Commission, wherein it sought to extend its regulatory power to include regulation of the authority of REMCs to incur indebtedness. The Commission's authority in this area was, by its own admission, not expressly given. The order included an analysis of existing statutes which the Commission concluded implicitly authorized it to regulate REMC indebtedness. In holding that the order was void and of no effect, this court stated that
"the foregoing order ... constitutes an unequivocal assertion of power of its jurisdiction and authority over the REMC's ... and this being an initial and integral step on a regulatory scheme is sufficient to present to this court the question of the jurisdiction and the power of the Commission[.]" 155 N.E.2d at 154.
The order at issue in Boone County R.E.M.C., supra, also included determinations that all REMCs within Indiana were public utilities and an order directing all REMCs to refrain from incurring new debt obligations until approval had been sought and obtained from the Commission. Further, the Commission declared in its order that non-compliance with its directive would subject non-complying REMCs to unspecified penalties.
Similarly, in Cities & Towns of Anderson, supra, 397 N.E.2d 303, the Commission issued an order proclaiming its intention to conduct a promulgation hearing concerning proposed rules and regulations to govern service conditions for water utilities. Several intervenors sought to dismiss the proceedings as to municipal water utilities, asserting that the Commission did not have jurisdiction to issue rules and regulations with respect to the provision of service by municipal water utilities. This court held that the Public Service Commission, being a creature of statute, could assert only such jurisdiction or authority as was specifically granted by statute. In reversing the Commission's decision, the court stated that "[i]t is not our function to determine what powers it would be wise to grant the Commission, but rather to decide what powers have been granted to the Commission by the Legislature." 397 N.E.2d at 310.
An allegation that an administrative order is contrary to law or unconstitutional submits for judicial review the legality of such determinations, findings or requirements as may have been contained in the order. For example, in Boone County R.E.M.C., supra, 155 N.E.2d 149, the Commission determined that all REMCs were "public utilities" and subject to its approval authority regarding REMC debt obligations. Similarly, in Cities & Towns of Anderson, supra, 397 N.E.2d 303, the Commission attempted to impose its rules and regulations in an area expressly reserved to the local waterworks department, subject, however, to the Commission's approval. I.C. 19-3-6.5-3(j) (repealed).
As can be readily discerned, neither Boone County R.E.M.C. nor Cities & Towns of Anderson addressed the issue of direct review by the Court of Appeals in a situation where the authority of the Commission to act in a particular matter is conceded, but the manner in which such authority is exercised is challenged. Both cases reviewed instances in which the Commission was attempting to issue pronouncements and directives in areas outside its expressed grant of authority.
Quite clearly then, if an administrative entity attempts or takes action without benefit of statutory authority, its actions may be challenged and enjoined at the first expression of its intent to act, without requiring the aggrieved party to first suffer the unlawful intrusion. See, e.g., Illinois-Indiana Cable Television Ass'n v. Public Service Commission (1981) 1st Dist., Ind.App., 427 N.E.2d 1100; Cities & Towns of Anderson, supra, 397 N.E.2d 303; Citizens Gas & Coke Utility v. Sloan (1964) 136 Ind.App. 297, 196 N.E.2d 290; Boone County R.E.M.C., supra, 155 N.E.2d 149.
Conversely, when an administrative agency has been expressly granted the authority to regulate a class of persons or specific area, it is improper for a court to encroach through the mechanism of direct judicial review upon the agency's field of expertise, prior to issuance of a Commission order applicable to particular persons or to a particular claim. See generally Thompson v. Medical Licensing Board (1979) 2d Dist., 180 Ind.App. 333, 389 N.E.2d 43, reh. denied, 398 N.E.2d 679, cert. denied, 449 U.S. 937.
The Public Service Commission was established to insure reliable and efficient service to utility customers and empowered to regulate operations and conditions of service of those utilities within the Commission's sphere of authority. Office of Utility Consumer Counselor v. Public Service Co. of Indiana (1984) 3d Dist., Ind.App., 463 N.E.2d 499, 503. The Commission also has authority to establish and review utility rates. When the Commission issues an order pursuant to its regulatory or rate-making authority, it does so in its primary capacity as a fact-finding administrative body. Kentucky-Indiana Municipal Power Ass'n v. Public Service Co. of Indiana (1979) 3d Dist., 181 Ind.App. 639, 393 N.E.2d 776, 781. These orders are subject to direct judicial review by the Court of Appeals which determines whether the orders are based upon adequate findings of fact and whether such findings are supported by sufficient evidence. See Board of Directors for Utilities of Department of City of Indianapolis v. Office of Utility Consumer Counselor (1985) 2d Dist., Ind.App., 473 N.E.2d 1043 (); Capitol Improvement Board v. Public Service Commission (1978) 2d Dist., 176 Ind.App. 240, 375 N.E.2d 616.
However, the requirement that an order be based upon specifically drawn findings of fact presupposes that the Commission is...
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