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Conflict resolution

At least Indiana utility regulators were embarrassed enough to reverse course after their plan to solicit money from utility trade groups to finance a conference attracted media scrutiny. That regulators made the suggestion should have ratepayers worried. But the fact that ethics officials unanimously approved the scheme is greater cause for alarm.

The Indiana Utility Regulatory Commission crafted a fundraising plan that called for requesting money from utility trade groups to pay for a five-day Mid-America Regulatory Conference, scheduled for June in Indianapolis. The conference attracts regulatory officials, utility executives and energy attorneys from 14 states.

To no surprise, environmental and open government advocates protested the plan. They raised concerns that the donations from the utility trade associations would become an opportunity to curry favor with state regulators – the people who decide whether utility companies can raise rates or build new power plants. Most of the trade groups have members who do business before the regulatory agency, creating the strong potential for conflicts of interest.

To provide cover for the fundraising plan, the IURC sought an opinion from the Indiana Ethics Commission.

On Sept. 11, state ethics officials voted 3-0 to approve the plan and ruled that it would not violate state ethics laws.

Early the next day – after a story about the ethics panel’s ruling appeared in the Indianapolis Star – state regulators swiftly reversed their plans.

Jim Atterholt, chairman of the IURC, released a statement saying the agency would either have the event without the financial support of any trade association that has a member regulated by the IURC or would cancel the event.

“We commend their decision,” said Julia Vaughn, director of Common Cause Indiana. “That’s absolutely the right thing to do. They are not like any other state agency. Because of the (David Lott Hardy) indictments they have had this cloud of suspicion hanging over them for years. They have to keep that in mind and act accordingly. This just didn’t look right ethically, and they made the right decision.”

Hardy, a Fort Wayne attorney, is the former head of the IURC. He was charged in 2011 with several felony counts of official misconduct for allowing the commission’s top attorney to oversee cases involving Duke Energy while he was trying to get a job with the utility. In August, a Marion County judge scolded Hardy but dismissed the charges. Attorney General Greg Zoeller is seeking to reinstate those charges.

The temporary injudiciousness from the IURC members is troubling, but at least they made the right decision after gaining a better understanding of how utility customers would perceive the solicitation. State ethics officials have no excuse for their flawed ruling.