President and Chief Operating Officer Vince Parisi and other utility leaders were frequently asked during the daylong hearing why they had not provided the public with more details about their proposal at an Indiana Utility Regulatory Commission hearing Tuesday. NiSource and NIPSCO leaders often declined to answer questions from stakeholders, were directed by the judge to answer more directly or said they would not make new commitments outside a proposed settlement with industrial users in exchanges that got tense and testy at times.
NIPSCO sought approval from state regulators to approve a settlement with NIPSCO Industrial Group, which consists of large industrial users like Cleveland-Cliffs and U.S. Steel. It is trying to get permission to create a first-in-the-nation arrangement to be able to negotiate electric rates directly with megaload data center developers with billions of dollars of new data centers projected to flood into Northwest Indiana in coming years.
Stakeholders, including LaPorte County and the Citizens Action Coalition, had a number of questions about the proposal, such as how exactly the subsidiary would work, what NIPSCO resources it would use and whether GenCo could exercise eminent domain for power generation projects without first getting approval from state regulators.
Friedman & Associates Principal Attorney Shaw Friedman, who represented the LaPorte County Commissioners, peppered Parisi with several questions, such as what inspired the GenCo idea, if the investment firm BlackRock directed it to and how much of a windfall it would mean for shareholders.
"The average tenure of a NIPSCO president is about two years," Friedman said. "Do you know or have you endeavored to look at some of the history of NIPSCO in term of some of the commitments that have been made, projects that have been promoted or proposed over the last 20 years of NIPSCO?"
"I have not studied the last 20 years of NIPSCO," Parisi said.
"If I told you you're the ninth president of NIPSCO since 2003, would that square with your knowledge?"
"That's not a stat that I know," Parisi said.
Friedman pressed him on a number of issues such as if the GenCo concept was inspired by what any other utilities had done and if he read trade publications to keep up with best practices. Parisi deflected a number of questions by saying he wasn't familiar with documents being introduced, didn't prepare them and wasn't prepared to speak with them.
He for instance said he wasn't familiar with a list of past NIPSCO presidents and declined to comment on whether institutional knowledge of the company he was running was important, saying he wasn't prepared to speak to the question.
"You're proposing that this commission move on something that's the first of its kind in the nation, isn't it?" Friedman asked.
"I'm not familiar with this being anywhere else in the country," Parisi said.
"In your preparation for making this proposal to the commission, did you endeavor to find out if anyone, any other investor-owned utility in the country, had proposed a new affiliate, a new largely unregulated affiliate, rather than reappropriating an existing one for megaload customers?" Friedman asked.
"We were attempting to find a creative way to meet a need in front of us and to do it in a way to protect our base customers from them," Parisi said.
NIPSCO said a spinoff would shield existing power customers from the cost and risk of bringing new electric capacity online to serve megaload projects consuming more than 100 MWs.
"As part of this due diligence, did you attempt to survey what other utilities around the countries have done to leverage existing unregulated affiliates for purposes like this," Friedman asked.
"We focused on the need in Indiana," Parisi said.
"So there was no need to go outside to look at best practices or study in any way?" Friedman asked.
"Again, we focused on the need in Indiana," Parisi said.
"What kind of study was done before you brought this proposal forward," Friedman said.
"Again, we focused on the opportunities in front of us, the desire to protect our base customers from the potential exposure and to do it on a way that met the new customers' needs," Parisi said.
"So you didn't go to school on what anybody else had done, is that correct?" Friedman asked.
"Again, we focused on the need in Indiana," Parisi said.
"You felt you knew the best way without checking with any affiliate, without checking with any other investor-owned utilities or without checking with best practices in other states. Is that correct," Friedman asked.
"We looked at what was best for our customers in Indiana, for our company and for our new customers, Parisi said.
Citizens Action Coalition of Indiana Regulatory Director Jennifer Washburn pushed for clarification on a number of issues, such as to what extent NIPSCO would be responsible for GenCo's legal bills in presenting the case.
"That's the crux of this case: the structure, this procedure, this process that GenCo has put forward. To say we're going to kick the can down the road to decide all of the details, right?" she said.
"The GenCo structure is certainly in front of the commission at this time for review and approval," Parisi said.
"But we don't have any details," Washburn said.
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