Scandal rocks IURC, Duke

December 24, 2010

An ethics scandal at the Indiana Utility Regulatory Commission brought down its chairman along with two top Duke Energy executives and an IURC law judge-turned Duke employee who was at the center of the mess.

Scott Storms, the administrative law judge and chief counsel at the commission, last summer applied for a job as an attorney for Duke. Storms had helped administer a number of Duke cases pending before the commission, including the utility’s $2.9 billion coal gasification plant under construction in Edwardsport.

One of the Edwardsport plant’s strongest opponents, Citizens Action Coalition, questioned the integrity of Storms’ recent rulings regarding Duke. Gov. Mitch Daniels fired the chairman of the commission, David Lott Hardy, in October, after an internal review concluded Hardy allowed Storms to continue to work on Duke cases even as he jockeyed for a job with Duke.

The state ethics commission originally cleared Storms to take the job at Duke, but the commission later filed charges after additional information came to light, including e-mails indicating Hardy and Storms appeared to make light of ethics commission procedures. Hardy appeared to be helping Storms get hired at Duke.

“As to this ethics [sh--], we will get through it—hang in there,” Hardy told Storms in one e-mail.

North Carolina-based Duke placed Storms and its top Indiana executive, Mike Reed, on administrative leave and later fired both of them. More recently, Duke’s president of U.S. franchise gas and electric operations, Jim Turner, resigned, after e-mails surfaced suggesting that he and Hardy were chummy.

In recent weeks, groups concerned about Edwardsport’s spiraling cost overruns asked the commission to reopen a settlement agreement struck this year that would have capped costs of the plant. They say the agreement was tainted as it was negotiated under the leadership of Reed and Turner, citing the potential of undue influence.•


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