‘Hit on ratepayers’: $625K settlement will be paid out of IURC budget

By KARA KENNEY
WISH-TV | wishtv.com

A $625,000 settlement with a former utility regulator will be paid out of the Indiana Utility Regulatory Commission’s budget, Indiana’s I-Team has learned.

“Effectively, it means ratepayers are paying this settlement,” said Kerwin Olson, executive director at the Citizens Action Coalition, a consumer advocacy group. “It’s extremely disappointing and a double hit on ratepayers.”

Former Indiana Utility Regulatory Commission Chair Andy Zay filed a lawsuit in Marion County court on Aug. 10, claiming his firing in early August was “unlawful.”

The state will pay $625,000 total for settlement to Zay and his attorneys, records show.

Zay alleged in his lawsuit that the governor’s office pressured Zay concerning the AES rate case.

Neither the governor’s office nor former Commissioner Andy Zay admitted any wrongdoing.

The governor’s office said Friday that the state will pay the $625,000 settlement out of the IURC budget.

The IURC is a state administrative agency that oversees and regulates public utility companies in Indiana.They are funded from fees paid by utilities, said Olson.

“They’re charged based on their annual revenues, and they pay a portion of that to the IURC,” said Olson. “Generally speaking, the utilities recover that money for ratepayers. So effectively, the IURC is funded by utility ratepayers.”

The settlement includes the remaining salary and benefits if Zay had served through March 31, 2030.

March 31, 2030, is when Zay’s term as one of the five IURC commissioners was to expire.

“Utility ratepayers are paying for six commissioners when they only should be paying for five,” said Olson.“We’ve been told the IURC is short-staffed, under a lot of constraints, and so who are they not going to be able to hire as a result of paying the settlement, they’re already short staffed. Ratepayers need a robust IURC staff to review, analyze, critique the dozens and dozens and dozens of filings that the utilities place before them all the time.”

In his lawsuit, Zay asked to be reinstated at the IURC. However, that will not happen as part of the settlement.

Statements

Gov. Mike Braun, R-Indiana

“I am pleased that we have been able to reach a resolution. This agreement allows all involved to move forward constructively in the best interest of Hoosiers. I want to recognize Andy for his service to the state. Public service is demanding work, and I appreciate his contributions over the course of a decade on behalf of Hoosiers.”

Andy Zay

“The Indiana Utility Regulatory Commission performs important work on behalf of all Hoosiers, balancing the affordability of services needed by all citizens, as demonstrated recently by the historic flooding, against the costs for maintaining and supplying those services.

“I’m proud to have been involved in addressing these issues during my time on the Utilities Committee in the Indiana Senate and later as Chair and Commissioner of the IURC. I am disappointed that I will no longer be directly involved in this important work, but I believe resolution with the State is in everyone’s best interest at this time. I appreciate Governor Braun’s willingness to reach satisfactory terms so that we can all move forward in a positive direction.”

Indiana Utility Regulatory Commission

“To answer your questions, the operating budgets of the IURC (and OUCC for that matter) are funded through a charge on public utilities. For many years, utilities paid into a dedicated fund, which covered the operations of both agencies. However, since the most recent budget session, those dollars have been directed through the state’s General Fund.

“For this fiscal year, specifically, the Commission’s budget is $11,065,069. Here’s a link to our appropriation as allocated by the Indiana General Assembly. Generally speaking, the IURC budget mainly covers the operational expenses needed to run/manage the agency (e.g., personnel costs, including salaries and benefits, administrative costs, technology/equipment, etc.).”

This story was originally published by WISH-TV at wishtv.com/news/local-news/hit-on-ratepayers-625k-settlement-will-be-paid-out-of-iurc-budget.