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STATE OF INDIANA INDIANA UTILITY REGULATORY COMMISSION
APPLICATION OF INDIANAPOLIS POWER & LIGHT COMPANY FOR
APPROVAL OF A FUEL COST FACTOR FOR ELECTRIC SERVICE DURING THE
BILLING MONTHS OF JUNE THROUGH AUGUST 2020, IN ACCORDANCE WITH THE
PROVISIONS OF I.C. 8-1-2-42, CONTINUED USE OF RATEMAKING TREATMENT
FOR COSTS OF WIND POWER PURCHASES PURSUANT TO CAUSE NOS. 43485 AND
43740
) ) ) ) ) ) ) CAUSE NO. 38703 – FAC127 ) ) ) )
SIERRA CLUB’S MOTION FOR SUBDOCKET TO INVESTIGATE INDIANAPOLIS
POWER & LIGHT COMPANY’S ENERGY MARKET COMMITMENT PRACTICES
Sierra Club respectfully requests that the Indiana Utility
Regulatory Commission
(“Commission”) initiate a subdocket in this proceeding to
provide the Commission with the time
and information necessary to fully evaluate the prudence of
Indianapolis Power & Light
Company’s (“IPL’s” or the “Company’s”) commitment decisions and
fuel expenditures for the
Petersburg coal plant during the time period at issue in this
proceeding. Sierra Club respectfully
asks that the Commission make any approval of the Company’s
requested fuel cost adjustment
factor (“FAC”) subject to refund pending the outcome of the
subdocket. We also respectfully ask
that Judge Manion shorten the time for the Company’s response to
this motion so that a decision
can be reached within the statutory time frame.1 In support of
this motion, Sierra Club states:
1. In this docket, IPL is requesting recovery of fuel-related
costs for the period of
June through August 2020 and seeking true-up recovery of
fuel-related costs for the period
November 2019 through January 2020.2 This results in a FAC of
$0.008665 per kWh
1 See 170 IAC 1-1.1-12(e). 2 IPL Verified Application ¶¶
10-11.
ShCoeNew Stamp
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commencing with the first billing cycle upon the later of the
date of approval by the Commission
or the first June 2020 billing cycle.3
2. A subdocket is justified here to provide the Commission
sufficient time to decide
whether this FAC is appropriate and to provide Sierra Club the
opportunity to answer unresolved
questions in IPL’s decision-making that are raised by the
rebuttal testimony of Company witness
Jackson. This Commission has regularly ordered subdockets where
“the summary nature of
proceedings with statutory time constraints such as the FAC do
not lend themselves” to sufficient
record development.4 In this proceeding a subdocket is warranted
because serious concerns exist
with respect to the prudence of IPL’s energy market commitment
decisions and there is
insufficient time to conduct a full, adequate investigation
given the statutory time constraints.
3. First, IPL’s proposed fuel adjustment factor will likely
result in excess costs to
customers due to its likely imprudent “must run” commitment
decisions for its Petersburg
facility during the November 1, 2019 through January 31, 2020
period. These excess costs are
particularly concerning when IPL, along with other Indiana
utilities, is seeking a customer-
funded bailout related to lower than expected revenues due to
the Covid-19 pandemic.5 Rather
than take advantage of lower natural gas and energy prices
during the true-up period, IPL
3 IPL Verified Application, Attachment NHC-1-A. 4 Application of
Duke Energy Indiana, LLC, Cause No. 38707-FAC 111, 2017 WL 1632308,
at *8 (Apr. 26, 2017). 5 Verified Joint Petition of Duke Energy
Indiana, LLC, Indiana Gas Company D/B/A Vectren Energy Delivery of
Indiana, Inc., Indiana Michigan Power Company, Indiana Natural Gas
Corporation, Indianapolis Power & Light Company, Midwest
Natural Gas Corporation, Northern Indiana Public Service Company,
LLC, Ohio Valley Gas Corp. and Ohio Valley Gas, Inc., Southern
Indiana Gas & Electric Company D/B/A Vectren Energy Delivery of
Indiana, Inc., and Sycamore Gas Company, For (1) Authority For All
Joint Petitioners to Defer As A Regulatory Asset Certain
Incremental Expense Increases Revenue Reductions of the Utility
Attributable to Covid-19; and (2) The Establishment of Subdockets
for Each Joint Petitioner in Which Each Joint Petitioner May
Address Repayment Programs for Past Due Customer accounts, Approval
of new Bad Debt Trackers, and/or Details Concerning The Future
Recovery of the Covid-19 Regulatory Asset, Cause No. 45377,
(petition dated May 8, 2020).
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repeatedly chose to operate the Petersburg coal plant as “must
run” in November through
December 2019, resulting in net losses and unnecessarily
incurred fuel costs—losses the
Company now seeks to recover from customers. In fact, during the
historic period November
2019 to January 2020, market energy prices were well below the
vintage forecasts (from FAC
124 and 125), and yet the Company continued to operate
Petersburg at a similar level of
operation based on the vintage forecast, effectively ignoring a
collapse in energy market prices.
The Company therefore very likely knew that it could have saved
customers money by not
operating Petersburg during extended low-market energy price
periods from November and
through December 2019. Instead, IPL consistently committed
Petersburg out of merit for
substantial periods during the historic period, incurring $1.55
million in excess fuel and variable
O&M costs.
4. IPL’s failure to take advantage of lower energy prices during
the true-up period
points to fundamental inadequacies in its general practice of
assessing MISO energy market
commitment decisions which warrant Commission scrutiny. In
discovery in this docket, IPL
stated that it uses a process to forecast net energy margins
over a one week period to assess the
“economic performance” of the Petersburg units before committing
them into the MISO market.6
But the Company appears to have not used the commitment decision
process at all in November
and December 2019 under the erroneous impression that market
prices were at, and would
continue to be above, the cost of operating Petersburg. Further,
while company witness Jackson
criticizes Sierra Club expert Dr. Jeremy Fisher, PhD, for not
relying on contemporaneous
6 See IPL Response to Sierra Club DR 1-4(a), attached to the
Fisher Testimony as Exhibit JIF-6. (“IPL looks at the predicted
economic performance of the unit over a period of a week when
deciding whether to commit the unit. The startup cost that would be
necessary to re-start the unit is also considered. Additionally,
IPL considers reliability, price certainty from running generation,
and opportunities from participating in both Day Ahead and Real
Time energy markets.”)
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documents from November and December 2019, the Company concedes
that there are no
contemporaneous documents that reflect its energy market
commitment decisions. On the record
that exists, it is impossible to know for sure what, if any,
review the Company undertook of
current and near-future prices at the time it made commitment
decisions in the true-up period
because IPL did not maintain any documentation of its commitment
decision work papers such
that the Commission, the OUCC, and stakeholders can review the
prudence of its commitment
decisions based on review of contemporaneous documents.
5. Second, a subdocket—allowing for the possibility of a
refund—is warranted here
because further discovery would improve the record of decision
by allowing further investigation
of unanswered questions and more-precise calculation of the fuel
disallowance should the
Commission agree that IPL’s actions were imprudent. Further
discovery would also aid the
Commission’s oversight of IPL’s energy market commitment
decision making. Just one week
before the hearing, the Company filed robust rebuttal testimony
of witness Jackson raising many
issues that were not addressed in its case-in-chief. Core
questions remain unresolved. While IPL
does not dispute that it suffered energy market losses during
the historic period at issue here,
Company witness Jackson disputes the amount calculated by Sierra
Club witness Fisher.7 And
while the Company asserts that it assesses the economic
performance of its units before making
energy commitment decisions, it is unknown why the Company did
not rely on this practice
during the historic period at issue here. Other areas that
warrant further discovery, include the
derivation of the figures Mr. Jackson proffers for off-system
costs and sales in the workpapers
submitted as part of his rebuttal testimony, how IPL values
reliability and operational concerns
in determining whether to operate Petersburg, how IPL uses and
values “must run” operation as a
7 See Jackson Rebuttal, page 17.
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“hedge” against winter fuel prices, and whether IPL acted
prudently with respect to the FGD
wastewater issues that forced an outage at two units at
Petersburg in January 2020.
6. IPL bears the burden of demonstrating that it “has made every
reasonable effort to
acquire fuel and generate or purchase power or both so as to
provide electricity to its retail
customers at the lowest fuel cost reasonably possible” during
the relevant period—here,
November 2019 through January 2020.8 Where a utility can
purchase power at less expense than
producing it, the Company must do so.9 And where the utility
fails to demonstrate that its energy
generation decisions were prudent, the utility, and not
customers, bear the costs.
7. For the reasons described herein and in the testimony of the
economic analysis of
Sierra Club witness Fisher, IPL has failed to meet its burden.
IPL’s commitment decisions
appear to be based on months-old forecasts, with no documented
near-contemporaneous
reassessment as to whether energy prices and operational costs
make operating Petersburg as
“must run” a prudent choice for IPL’s customers. The result, as
evident from the true-up period,
are significant periods of imprudent energy market commitment,
where Petersburg operates at a
net loss and where IPL could have served its customers’ energy
needs at lower cost through
power purchases. Under this Commission’s precedent, IPL’s
operational decisions—and the
Company’s failure to update these decisions based on reasonably
contemporaneous
information—were imprudent. Given the inherently rapid nature of
fuel adjustment clause
proceedings, the Commission should open a subdocket, subject to
refund, to ensure that it has the
time and information necessary to conduct a comprehensive
assessment to determine the amount
of unreasonably incurred fuel costs. For similar reasons, the
Presiding Officers granted a
8 See Indiana Code §8-1-2-42(d)(1). 9 N. Ind. Pub. Serv. Co.,
Cause No. 37343 (Dec. 27, 1983).
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subdocket in a Duke Energy Indiana fuel adjustment proceeding
earlier this year that allowed for
the possibility of refund to customers,10 and we urge that the
Commission do so here as well.
A. IPL likely made imprudent commitment decisions and incurred
unreasonable fuel costs at Petersburg during the historic period.
8. During the historic period, IPL chose to burn fuel to generate
power at Petersburg
rather than purchase lower-cost energy. As a result, during the
period from November through
December 2019, the Company incurred $1.55 million more in fuel
and variable O&M costs than
if it had simply purchased energy on the market. The most-recent
documented analysis by IPL in
support of these decisions are apparently its submissions, as
part of FAC 124 and 125, in June
and September 2019; at that time, IPL’s forecasts showed small
losses (i.e., fuel costs at
Petersburg slightly exceeded forecasted MISO prices) in November
and December and small
gains for January. However, by early November energy market
prices were significantly lower
than the mid-2019 forecasts; IPL knew (or should have known),
based on its earlier forecasts,
that operating Petersburg during this period would cost more
than purchasing an equivalent
amount of energy on the MISO market—especially during the second
half of November through
December 2019. However, IPL committed Petersburg during this
period as “must run,” and did
so without any documented contemporaneous analysis which it
could produce in response to
Sierra Club’s discovery requests. If the Company’s requested
fuel adjustment clause is approved
without creation of a subdocket subject to refund, customers
will be required to bear the costs of
these unit-commitment decisions through higher rates.
9. As explained in the testimony of Dr. Fisher, IPL’s unit
commitment decisions
should be based on a near-term, forward-looking net energy
margin projection, using an
10 Docket Entry Granting Motion for Subdocket, Application of
Duke Energy Indiana, Inc., Cause No. 38707 FAC 123 (March 12,
2020).
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assessment of the cost of coal generation, including using the
full cost of variable O&M and
appropriate startup and shutdown costs.11 Between November
through December 2019, IPL
operated each of its Petersburg units as “must run” for weeks
even though energy prices had
dropped below the Company’s own vintage forecasts from the FAC
124 and 125 proceedings,
indicating that purchasing energy from MISO would have cost less
than generating it.
10. Specifically, and as explained in Dr. Fisher’s testimony,
using the Company’s
own unit-commitment logic, Petersburg Units 1, 2, and 3 should
have been de-committed in mid-
November 2019, and not turned back on again over the entire
historic period, i.e., through
January 31, 2020. Petersburg Unit 4, which has a slightly lower
production cost than the other
units, should have been de-committed on a slightly later date
and returned to service weeks
later.12 Instead, the Company elected to return those units to
service after relatively brief de-
commitments, resulting in substantial net losses. Indeed, the
Company experienced significant
net losses through the second half of November and nearly all of
December 2019, remaining in
idle during that time period would have avoided those losses, to
the tune of $1.55 million over
those three months alone.
11. In IPL’s rebuttal testimony, Mr. Jackson asserts that this
analysis is
inappropriately based on hindsight. Mr. Jackson further contends
that “forward market power
price values were high enough that we reasonably believed the
Petersburg units to be in the
money versus their costs.”13 But apart from this assertion, IPL
has failed to produce any
documentation showing contemporaneous analysis of forward market
power price values after
its submissions in FAC 124 and 125 that would support this
claim. IPL, in other words, has
11 Fisher Testimony, pages 18-19. 12 The precise dates that
Petersburg unit 4 should have been de-committed and then returned
to service are provided in the confidential version of the Fisher
Testimony, page 27. 13 Jackson Rebuttal, page 9.
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offered no evidence that it engaged in any effort in November
and December 2019 to determine
whether committing Petersburg as “must run” during a given
period was a prudent decision in
light of then-current prices and costs. Dr. Fisher cannot assess
the reasonableness of IPL’s
decision-making process if the process was never documented, and
IPL cannot claim that its
forward-looking analysis was reasonable (notwithstanding a clear
retroactive showing of
significant losses) if it cannot produce or show that it
conducted that analysis in the first place.
12. The evidence already produced shows IPL’s unit commitment
decisions resulted
in significant unnecessary net operational losses, and that the
Company could have reduced
customer energy costs by not operating Petersburg from
mid-November through December 2019,
and instead purchasing lower-cost energy from the MISO market.
IPL has failed to produce
evidence of its decision-making process showing that these
losses were unanticipated. Instead,
the analysis IPL did provide (from FAC 124 and 125) shows
Petersburg was anticipated to
operate “at the money” when energy market prices were predicted
to be considerably higher than
prices actually were by early November 2019. Moreover, the
Company generated far more
energy than required by its customers, requiring the Company to
make off-system energy sales to
MISO at a steep discount relative to the Company’s cost of
producing energy. As a result, IPL
lost the opportunity to procure lower cost energy, and now asks
that ratepayers compensate the
utility at costs well above market energy prices.
13. IPL’s Application and supporting testimony fail to justify
the Company’s unit
commitment decisions, and do not support the Company’s assertion
that it “has made every
reasonable effort to acquire fuel and to generate and/or
purchase power or both so as to provide
electricity to its retail customers at the lowest fuel cost
reasonably possible.”14 Indeed, IPL has
14 IPL Verified Petition, page 2.
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neglected to document its decision-making process at all, making
effective Commission
oversight difficult, at least on the record that exists today,
and potentially indicating a failure to
conduct contemporaneous economic analysis of commitment
decisions at all.
14. On May 11, 2020, just seven days before the scheduled
hearing in this matter, IPL
submitted 56 pages of technical testimony and supporting
exhibits, purporting to rebut Dr.
Fisher’s analysis, and to demonstrate that the Company’s unit
commitment process is reasonable.
This rebuttal testimony challenges Dr. Fisher’s conclusions on
several grounds, all raising more
questions than it answers.
15. First, IPL witness Jackson identifies several factors beyond
price—such as
reliability, price certainty/stability, and operational
issues—that the Company considers in
making commitment decisions.15 Even if the cost to operate
Petersburg exceeded market energy
prices, Mr. Jackson suggests, the decision to operate the
facility during November and December
of 2019 was reasonable in light of these factors. But tellingly,
Mr. Jackson does not explain how
reliability, price certainty, or operational issues actually
factored into the Company’s November
and December 2019 commitment decisions, whether these factors
justify the losses that IPL
suffered in the energy market, or how the Company weighs these
apparently qualitative factors
against the anticipated net market losses.
16. Second, Mr. Jackson claims that IPL should not be disallowed
costs at Petersburg
because ratepayers benefited from the combined off-system sales
margin for the historic period
of $3.7 million. But the calculations Mr. Jackson relies on in
making this assertion do not appear
to accurately represent the costs and benefits of operating
Petersburg. In support of his rebuttal
testimony, Mr. Jackson submitted a “Corrected” Table 2, which
purports to show total margins
15 Jackson Rebuttal, page 26.
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returned to customers as a result of off-system sales of
approximately $3.7 million over the
three-month historic period.16 However, numerous figures in this
“Corrected” Table are either
inconsistent with, or lack any foundation in, IPL’s other
filings in this case. For example, this
table shows the “Intersystem Sales Through MISO ($)” as equal to
$11,157,565 for November
2019.17 But IPL reported that Intersystem Sales Through MISO
were equal to $7,494,076 in its
initial Application.18 Mr. Jackson does not explain—or
acknowledge—this discrepancy. Mr.
Jackson does offer a summary worksheet showing the basis for the
figure he uses for total sales
in megawatt-hours—but this figure (439,388 MWh) includes sales
made from the Lakefield
wind farm. But it is illogical on its face to suggest that IPL
can count sales made from an entirely
different facility toward its calculation of the benefit of
operating Petersburg. Perhaps more
significantly, Mr. Jackson offers no explanation or derivation
of the total cost of inter-system
sales. This amount—ranging from $20.13/MWh for December 2019 to
$21.81/MWh for January
2020—is significantly less than the total of fuel costs at
Petersburg reported by IPL ($19.25 to
$20.70/MWh during the historic period) and operations expenses
reported to FERC in 2018
($4.75/MWh).19 These issues warrant further investigation.
17. Fundamentally, IPL cannot defend its decision to operate
Petersburg during the
historic period notwithstanding the fact that energy market
prices at the time were well below the
cost of generation at Petersburg because IPL does not appear to
have conducted a rigorous
contemporary analysis in November or December as to whether the
decision to self-commit
Petersburg was prudent. Indeed, IPL tacitly admits the
shortcomings in the Company’s
commitment process to date, noting that the Company has finally
begun to maintain “more
16 IPL Workpaper DJ-2R (May 11, 2020). 17 Id. at 10:H. 18 See
Schedule 5, Applicant’s Attachment NHC-1. 19 Attachment NHC-1,
Schedule 5, pages 1-3, lines 1 and 15; see Fisher Testimony at
24:5-11.
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robust daily documentation” of its commitment decisions,
including a “more refined modeling
process” that will “improve” and “better position to evaluate []
unit commitments from an
economic aspect as we look forward while taking into account
reliability, price protection and
operational matters.”20 While Sierra Club agrees that IPL should
provide this information to the
Commission on a forward going basis, the Company’s bald
assertion that its past unit
commitment processes were prudent does not make it so—especially
when, as here, the
Company admits that Petersburg’s costs exceed revenues and that
a “more robust” and “refined”
commitment process is warranted. And without a specific
Commission requirement, IPL could
go back to its November-December 2019 process of not doing a
contemporaneous analysis at all.
18. In sum, nothing in IPL’s proffered testimony actually
supports or explains its
decisions to continue operating Petersburg at a net loss for
extended periods of time during the
historic period, thereby unnecessarily increasing fuel and
operational costs for customers.
Instead, the Company’s response boils down to, “trust us, we’re
working on it.”
19. This Commission has long mandated, however, that the utility
bears the burden of
demonstrating the prudence of its operational and fuel
procurement decisions. Utilities must
“supplement[] internal coal generation of electricity with the
purchase of less expensive supplies
of electricity from neighboring utilities whenever operating
conditions will permit this without
adversely affecting the reliability of electrical services.”21
And where, as here, purchasing power
would have been less expensive than producing it, utilities—not
customers—bear the cost of any
over-supply of coal that might result.22 To allocate fuel costs
to ratepayers, a utility must show
that its choice to burn that fuel rather than procure market
power or to burn an alternative fuel
20 Jackson Rebuttal, pages 25-26. 21 N. Ind. Pub. Serv. Co.,
Cause No. 37343, 1983 WL 882710 (Dec. 27, 1983), pages 4-5. 22
Id.
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was prudent; if IPL cannot make this showing, the Company—and
not its customers—must bear
the costs associated with any excess fuel costs.
B. A subdocket is appropriate to further investigate IPL’s
apparently imprudent commitment decisions, particularly in the
absence of contemporaneous documentation of those decisions.
20. This Commission has regularly ordered subdockets where “the
summary nature of
proceedings with statutory time constraints such as the FAC do
not lend themselves” to sufficient
record development.23 For example, this Commission has opened
subdockets to investigate
“reasonable questions regarding the root cause of [an extended]
outage” within the FAC period24
and “in order to allow the interested parties to explore the
underlying reasons” for an
unexpectedly high variance.25 In both cases, the Commission
ordered a FAC subject to refund so
that it could assess whether the utility had acted prudently and
should be allowed to recover the
challenged cost. The Commission has also opened subdockets to
investigate operational
decisions, fuel costs, and allegedly imprudent commitment
decisions at other Indiana utility
generating resources.26
21. Most relevant of all, in March 2020, the Commission opened a
subdocket to
address “serious issues” with Duke Energy Indiana’s energy
market commitment decisions for
that utility’s coal plants.27 Like in the Duke Energy Indiana
matter, here, a subdocket is
warranted to allow the Commission sufficient time to adjudicate
the amount of a fuel
23 Application of Duke Energy Indiana, LLC, Cause No. 38707-FAC
111, 2017 WL 1632308, at *8 (Apr. 26, 2017). 24 Id. See also In the
Matter of the Application of Indiana Michigan Power Co, No. 38702
FAC 62, 2009 WL 874019, at *1 (Mar. 25, 2009) (establishing a
subdocket to examine the estimating technique of increased fuel
costs resulting from an outage). 25 In re PSI Energy, Inc., Cause
No. 38707-FAC50, 2001 WL 1708782 (Sept. 26, 2001) 26 Application of
Duke Energy Indiana, Inc., Cause No. 38707 FAC 99, 2014 WL 1389843,
at *5-6 (Apr. 2, 2014). 27 Docket Entry Granting Motion for
Subdocket, Application of Duke Energy Indiana, Inc., Cause No.
38707 FAC 123, at p. 1 (March 12, 2020).
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disallowance based on IPL’s imprudent commitment practices and
also to allow further
investigation into IPL’s energy market commitment decisions at
issue in this case. As was done
in the Duke matter, this IPL subdocket should be opened with the
possibility of a refund pending
the outcome of the proceeding.
22. In addition, because of the speed of this docket, the
absence of records from IPL
documenting key decision-making processes, and the inability of
the parties and the Commission
to obtain information and workpapers associated with IPL’s
eleventh-hour extensive rebuttal
testimony, there is simply insufficient time for the parties to
conduct a complete, precise
investigation as to the prudence of IPL’s generating unit
commitment decisions and practices.
Issues that warrant further investigation include:
i. Lack of contemporaneous documentation: On the one hand, the
Company states that it performs an economic performance analysis to
determine its commitment decisions, but there are no records of
this process. The Commission’s oversight would benefit from
exploration of the precise nature of this process and why there is
no record of it.
ii. Inconsistent discovery responses: Mr. Jackson asserts that
during “winter” IPL’s commitment decisions undefined operational
constraints, in contrast to IPL’s discovery responses in this case
that Sierra Club witness Fisher relied on.28
iii. Operational issues that impact commitment: IPL has asserted
that “operational issues” impact its commitment decisions, but it
is unclear what those issues are other than the inability to comply
with its water discharge permit in January 2020.
iv. Hedge value: IPL witness Jackson asserts that the Company
considers Petersburg commitment as “must run” as a hedge against
higher market prices,29 but this begs the questions of how valuable
that hedge is to customers and what quantification IPL
conducts.
v. Reliability: IPL witness Jackson asserts that the Company
considers reliability concerns in making commitment decisions for
the Petersburg units,30 but there is no evidence in the record of
how such concerns are weighed against expected market losses.
28 See IPL Response to Sierra Club DR 1-4(a), attached to the
Fisher Testimony as Exhibit JIF-6. 29 Jackson Rebuttal, pages 8-10.
30 Jackson Rebuttal, page 6.
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vi. Off-System Sales: Without more discovery, there is no
reasonable way to verify Mr. Jackson’s claims about off-system
sales.
vii. Water compliance issues: Mr. Jackson states that issues
with the FGD wastewater treatment plant caused the Company to
shutdown certain Petersburg units,31 but this explanation warrants
scrutiny to determine whether the Company’s actions were
prudent.
23. All of these issues are relevant to the prudence of IPL’s
energy market
commitment decisions for the historic period at issue in this
proceeding. The quality of the
Commission’s oversight of these significant costs would be
greatly improved by allowing
adequate time to address each of these issues.
C. Conclusion and Request for Expedited Briefing
24. In this proceeding, Sierra Club has shown likely imprudence
around commitment
decisions in November and December 2019 for the Petersburg plant
that justify a finding that the
Company has not “made every reasonable effort to acquire fuel
and generate or purchase power
or both so as to provide electricity to its retail customers at
the lowest fuel cost reasonably
possible.” IPL has failed to present adequate testimony and
evidence to address these questions
and explain its “must-run” commitment decisions in the face of
forecasted losses based on
contemporaneous evidence.32 This failure is seemingly linked to
a more systematic one, namely,
an absence of documented, contemporaneous economic analyses of
IPL’s commitment decisions.
Although the Company states it is trying to improve its business
practices around commitment
decision-making, the Commission should hold IPL to these
assurances, and provide for OUCC
and other stakeholder participation in improving these
practices, by opening a subdocket for
31 Jackson Rebuttal, page 12. 32 This Commission has disallowed
other components of a requested FAC where the utility failed to
present historical market analysis or other studies “to justify the
cost-benefit relationship of the proposed…program.” In the Matter
of the Application of Indiana Michigan Power Co., Cause No. 38702
FAC 64, 2010 WL 1245488, at *5 (Mar. 24, 2010).
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greater oversight or otherwise ordering the Company to maintain
adequate records as to its
decision-making processes.
25. Although it is clear from the evidence and testimony that is
before the
Commission that IPL’s unit-commitment decisions at Petersburg
have resulted in net operational
losses and unnecessary fuel costs during the relevant fuel
adjustment clause period, there is
insufficient statutory time allotted to these proceedings to
precisely quantify the total losses, and
thus the portion of the requested fuel adjustment that should be
disallowed.33 There are also core
unresolved relevant questions regarding IPL’s decisions during
the historic period that warrant
further investigation through discovery. For these reasons, the
Commission should open a
subdocket to ensure that it has the time and information
necessary to fully evaluate, quantify, and
categorize the value of the fuel disallowance specific to IPL’s
fuel adjustment clause.
26. Sierra Club respectfully requests that if the Commission
make any approval of
IPL’s proposed fuel adjustment clause subject to refund, open a
subdocket to allow further
discovery and investigation into the issues, and order IPL to
produce data sufficient at the outset
to allow parties and the Commission the opportunity to fully
understand the issues surrounding
the Company’s commitment practices at Petersburg.
27. Last, Sierra Club respectfully asks that Judge Manion order
IPL to provide its
response to this motion earlier than the time allocated under
Commission rules in order to allow
sufficient time for consideration of this motion.
33 See I.C. §8-1-2-42(b) (requiring the Commission to issue a
decision within 20 days of the filing of OUCC’s report).
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Respectfully submitted, ___/s/ Allison W. Gritton _________
Allison W. Gritton 211 North Pennsylvania Street One Indiana
Square, Suite 1800 Indianapolis, IN 46204 P 317.639.6151 F
317.639.6444 [email protected]
Tony Mendoza (appearance pro hac vice) Senior Attorney Sierra
Club 2101 Webster St., 13th Floor Oakland, CA 94612
[email protected] (415) 977-5589 Attorneys for Sierra
Club
Dated: May 14, 2020
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CERTIFICATE OF SERVICE
The undersigned hereby certifies that the foregoing was served
by electronic mail this
14th day of May, 2020, to the following:
Indianapolis Power & Light Teresa Morton Nyhart Jeffrey M.
Peabody Barnes & Thornburg LLP 11 South Meridian Street
Indianapolis, Indiana 46204 [email protected]
[email protected]
Indiana Office of Utility Consumer Counselor Office of Utility
Consumer Counselor 115 West Washington Street Suite 1500 South
Indianapolis, Indiana 46204 [email protected]
[email protected]
s/ Tony Mendoza Tony Mendoza
