Indiana Utility Regulatory Commission and Regulation and Duke Energy and Utilities

Storms drafted ethics memo on own case at IURC

April 14, 2011

Former Indiana Utility Regulatory Commission counsel Scott Storms spoke out for the first time publicly on ethics charges brought against him, denying allegations that there was a conflict of interest in how he handled cases involving Duke Energy as he sought a job with the company.

The Indianapolis utilities attorney told the Indiana Ethics Commission Thursday that he drafted a memo regarding his possible conflict of interest in handling cases that involved Duke but only plugged in what utility cases he would have to resign to other attorneys. He said he used the template of a similar memo that former IURC ethics officer Loraine Seyfried submitted for former IURC executive director Michael Reed when he was applying to become president of Duke's Indiana operations.

Seyfried signed off on Storms' draft and was removed from all cases connected to Duke's $2.9 billion coal-gasification plant in southwestern Indiana late last year.

The commission did not vote on the case after closing arguments Thursday, and said they will vote during their meeting next month.

Indiana's inspector general David Thomas has accused Storms of negotiating an entry-level attorney position with Duke while presiding over numerous cases involving the company, including cost overruns at the Edwardsport coal-gasification plant.

Storms told the commission he did not apply for the position until late July or early August, but had begun showing interest in the job as early as mid-April, after Duke's deputy general counsel Kelly Karn informed him of the job opening in late March.

Storms said he consulted David Hardy, chairman of the IURC at the time, who told him not to apply and not screen off his cases with Duke.

Thomas presented the commission with subpoenaed evidence showing Storms had dated his online application cover letter for late April, but Karn later said she did not receive the application until early August, well past the April 20 deadline that Duke executives extended for him.

Storms said he doesn't equate filling out forms on online application platforms with actually applying for the position because he did not hit the "submit" button until August — a defense he's using against Thomas' claim that he was seeking the position without handing off his Duke cases.

Karn said she and Storms maintained correspondence regarding the position over several months and discussed the matter about 10 times, including one lunch outing where they talked about job requirements. Karn said Storms called her to discuss the job, but she's the one who initiated the lunch meeting.

Storms said no negotiations were made during those conversations and that he was just trying to learn more about the company.

"Talking with Kelly Karn is not a noteworthy event in my mind," Storms told the commission.

Duke eventually hired Storms at a salary of $135,000 per year, or $42,000 more than he had earned with the state.

Duke fired Storms in November.

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