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Court of Appeals Reverses IURC Decision Regarding BP Whiting Refinery
Posted in Government

On Monday, the Indiana Court of Appeals reversed a controversial decision by the Indiana Utility Regulatory Commission regarding the BP Whiting refinery.  The Court of Appeals reversed the IURC and held that BP was not a public utility when it sold electricity to Marsulex, and that BP did not violate the Service Area Assignments Act.  The Court of Appeals ruled, however, that BP is a public utility when it sells water to the City of Whiting. The case began when BP Products North America, Inc. (BP) filed a petition with the IURC and requested that the Commission find that selling utility services to entities adjacent to  BP’s property does not make BP a public utility.  The IURC ruled that BP was acting as a “public utility” as that term is defined in Indiana law for its provision of steam, electricity, water and wastewater services.  Additionally, the IURC held that BP violated Indiana’s Service Area Assignments Act. 

Selling electricity to Marsulex

BP supplies excess electricity to Marsulex.  The Commission relied on a prior Court of Appeals’ decision in ruling that this was action that only a public utility may take.  The Court of Appeals disagreed with the Commission’s interpretation of that case. The Court of Appeals stated that because BP served only selected companies, that BP did not serve the indefinite public, and that BP “was engaged in a private activity, not the provision of services directly or indirectly to the public.” The Court of Appeals went on to state that a “’public utility’ is one that is ‘dedicated to public use;’ ‘under a common law duty to serve all who apply so long as facilities are available without discrimination;’ ‘impressed with the public interest;’ and a provider of service ‘of a public character and of public consequences and concern.’”

Selling water to Whiting

The court ruled against BP in its provision of water to the City of Whiting.  The Commission held that “[t]he contract provides for the provision of water to an entity that is a mere conduit serving the undifferentiated public, at least indirectly.”

Service Area Assignments Act

Finally, the court held that BP’s provision of electricity to Marsulex does not violate the assigned service area statutes.  Those statutes provide for assigned services areas for electricity suppliers wherein the electricity supplier has the sole right to provide electricity.  Because BP is not a public utility for its provision of electricity to Marsulex, it cannot violate the assigned services statutes. Bingham Greenebaum Doll LLP will continue to follow this case and provide timely updates when they are available.

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