IURC RESCINDS ITS ORDER TERMINATING
LIMITATION OF LIABILITY PROVISIONS

On April 24, 2002, the Indiana Utility Regulatory Commission issued an Order on Reconsideration rescinding its previous Order in Cause No. 42002, the proceeding the Commission initiated to investigate the propriety of provisions in the tariffs of public utilities which limit liability for service interruptions.

Initially, the Commission issued a docket entry asking public utilities and any other interested parties to respond to data requests regarding the necessity for limitation of liability provisions in utility tariffs. IMEA responded to the Commission's data requests on behalf of its members. The two major themes of IMEA's responses were: (i) limitation of liability provisions serve a variety of important purposes; and (ii) while the Commission has jurisdiction over the rates and charges of certain IMEA members, it does not have jurisdiction over the terms and conditions upon which those municipal electric utilities provide service - including limitation of liability provisions. Cities and Towns of Anderson v. Public Serv. Comm'n, 397 N.E.2d 303, 309 (Ind. Ct. App. 1979).

On March 6, 2002, the Commission approved an Order in Cause No. 42002 terminating any and all language filed in tariffs which limit a public utility's liability for service interruptions. Thereafter, numerous parties to the proceeding filed Notices of Appeal and Motions asking the Commission to either stay the March 6th Order pending appeal, or vacate the Order. The Commission reconsidered and rescinded the March 6th Order based on these Motions.

The Commission, however, directed its General Counsel's office to begin a rulemaking on the issue of limitation of liability provisions during the next two months. IMEA's counsel will monitor the rulemaking process to ensure that any rule or regulation the Commission ultimately adopts does not adversely impact IMEA members under the Commission's jurisdiction.

If you have any questions regarding Cause No. 42002 or the upcoming rulemaking, you can call:

Mike Cracraft or
Steve Krohne of
Hackman Hulett & Cracraft, LLP
at (317) 636-5401

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