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FOR PUBLICATION

ATTORNEYS FOR APPELLANT: PETER L. HATTON JON B. LARAMORE ELIZABETH A. HERRIMAN Baker & Daniels LLP Indianapolis, Indiana GREGORY S. COLTON Nisource Corporate Services Co. Merrillville, Indiana

ATTORNEYS FOR APPELLEE: JOHN F. WICKES, JR. TODD A. RICHARDSON BETTE J. DODD STEVEN W. GRIESEMER Lewis & Kappes Indianapolis, Indiana

FILED
Mar 07 2008, 10:27 am
of the supreme court, court of appeals and tax court

IN THE COURT OF APPEALS OF INDIANA
NORTHERN INDIANA PUBLIC SERVICE COMPANY, Appellant, vs. UNITED STATES STEEL CORPORATION, Appellee. ) ) ) ) ) ) ) ) ) )

CLERK

No. 93A02-0706-EX-467

APPEAL FROM THE INDIANA UTILITY REGULATORY COMMISSION Cause No. 43204

March 7, 2008

OPINION - FOR PUBLICATION

BAILEY, Judge

Case Summary Northern Indiana Public Service Company ("NIPSCO") appeals the Indiana Utility Regulatory Commission's ("IURC" or "Commission") grant of United States Steel Corporation's ("U.S. Steel") Motion for Summary Judgment.1 We reverse and remand. Issues The parties each raise two issues on appeal, which we consolidate and re-state as: I. Whether this Court should review de novo an agency's grant of summary judgment based entirely upon principles of contract interpretation; and Whether the IURC erred in interpreting the documents executed by the parties. Facts and Procedural History This appeal concerns a contract for NIPSCO's sale of electricity to U.S. Steel, relating in particular to U.S. Steel's facilities in Gary ("Gary Works"), its electric generating facilities in Chicago ("South Works"), and a transmission line connecting them. The facts are not disputed. In 1998, U.S. Steel filed a complaint with the IURC regarding a dispute with NIPSCO.2 In May and June of 1999, the parties executed seven documents to resolve the litigation and continue their relationship. On May 12, the parties executed a Term Sheet which specified the duration of the agreement, the "price for power to Gary Works on an

II.

We heard oral argument in this case on January 29, 2008 in Indianapolis. The Commission's Order on Summary Judgment indicated that "[t]he dispute . . . was part of a long running dispute between U.S. Steel and NIPSCO regarding electric generation and transmission facilities at U.S. Steel's South Works facility." Appendix at 11. See U.S. Steel Corp. v. N. Ind. Pub. Serv. Co., 482 N.E.2d 501 (Ind. Ct. App. 1985), reh'g denied, trans. denied.
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annual average per kwh basis," and a series of other provisions. Appendix at 121. The Term Sheet established five different time periods and the price in mills-per-kilowatt-hour for each time period.3 The price for the last of those time periods, October 1, 2005 through the end of the contract, was subject to a market based price adjustment factor. Under the heading "Contract Determinants," the parties noted that "[t]he prices . . . are based upon [Q] KW of demand and energy usage of [P] Kwh."4 Id. at 121. Finally, in the Term Sheet, the parties agreed to "use their best efforts to develop mutually satisfactory contractual documents to implement the provisions of this term sheet and to obtain necessary corporate and IURC approvals thereof." Id. at 123. Over the course of June 16 and 17, the parties executed six other documents: the Contract for Electric Industrial Power Service ("Contract for Power"), the Settlement Agreement, the Letter Agreement, the Operation and Control Agreement ("Operation Agreement"), the Facility/Property Lease ("Lease"), and the Access/Use License Agreement ("License"). The latter two were, in fact, agreements between U.S. Steel and South Works Power Company ("SWPC"), whereby SWPC would operate South Works and the transmission line. The Letter Agreement incorporated by reference the Term Sheet executed a month earlier. Article 5.2 of the Contract for Power established a Demand Charge and an Energy Charge. The Demand Charge provision contained precisely the same five time periods as

A mill is one tenth of a cent. http://www.eia.doe.gov/glossary/glossary_m.htm (last viewed Feb. 7, 2008). 4 We use P, Q, R, S, T, and U where the documents contained numbers.

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those designated in the Term Sheet. As in the Term Sheet, the Demand Charge was reduced marginally for each successive time period. Unlike the Term Sheet, with prices measured in mills-per-kilowatt-hour, the Demand Charge was measured in dollars-per-kilowatt. Though identified in different measures, the prices in the Term Sheet and those in the Contract for Power's Demand Charge were identical for each of the five time periods, as described infra. The Energy Charge applied to energy used in excess of a particular amount per month. For the entire contract term, the Energy Charge was U mills-per-kilowatt-hour. The Term Sheet had not contained a similar provision. Article 5.1 of the Contract for Power addressed the market based price adjustment factor. [NIPSCO] will bear the fuel price risk during the term of this contract; however, effective October 1, 2005 through the end of the Contract term; a market based price adjustment factor will be used to adjust the kilowatt-hour prices set forth in Article 5.2. Appendix at 32 (emphasis added). The parties submitted for the IURC's approval the Contract for Power and the Settlement Agreement, but none of the other five documents. The IURC conducted an evidentiary hearing during which the parties presented testimony. In addition, the Office of Utility Consumer Counselor ("OUCC") participated and cross-examined one of the witnesses. The IURC found as follows: [T]he Settlement [Agreement] and accompanying [Contract for Power] resolve all of the outstanding issues . . . in a manner that is reasonable, in the public interest, and adequately supported by substantial evidence of record, practicable and advantageous to the parties, not inconsistent with the Act, and in compliance with the provisions of [I.C.

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