INDIANAPOLIS — The former chairman of the Indiana Utility Regulatory Commission was indicted today on charges alleging that he allowed the panel's top lawyer to keep overseeing cases involving Duke Energy even though he knew the attorney was trying to land a job at Duke.
Marion County Prosecutor Terry Curry said a grand jury had indicted David Lott Hardy on three counts of official misconduct.
One of the counts alleges that Hardy communicated with Duke employees regarding efforts by former IURC attorney Scott Storms to secure a job with Duke, and that he allowed Storms to continue handling Duke-related matters before the commission.
The two other counts allege that Hardy failed to disclose conversations he allegedly had with Duke employees over the rising costs of the $3.3 billion coal-gasification Duke Energy is building near the southwestern Indiana town of Edwardsport.
"We look forward to vigorously prosecuting this case to its conclusion," Curry said in a prepared statement.
Hardy did not immediately respond to a telephone message today at his Fort Wayne home seeking comment.
Gov. Mitch Daniels fired Hardy in October 2010 after an internal review showed that Storms, who was the IURC's top attorney and an administrative law judge, discussed a position with Duke while presiding over hearings concerning the utility.
Kerwin Olson, the executive director of the Citizens Action Coalition, said Hardy's alleged communications with Duke employees over the Edwardsport plant's costs had violated the public's trust.
He urged the IURC's current chairman, James Atterholt, to begin investigating the impact that Hardy's communications with Duke may have had on the coal-gasification plant, which has seen its costs soar since it was first proposed.
"It was without question improper behavior in this case by the chairman of the commission. And the commission should begin an immediate investigation into the effect that that communication, that behavior, has had on this power plant," Olson said. "We felt from the get-go that Edwardsport is an illegitimate power plant that should never have been approved."
The cost estimate of the plant about 60 miles north of Evansville has climbed from its original estimate of $1.9 billion in 2007 to the current estimate of $3.3 billion
Charlotte, N.C.-based Duke, which is Indiana's largest electric utility, with about 780,000 customers across much of the state, has attributed those cost increases in part to design changes for the plant, which will be one of the largest coal-gasification plants in the world.
The 630-megawatt plant, which is more than 90 percent built and is set to open next year, will convert coal into a synthetic gas that will be burned in a traditional turbine power plant to produce electricity.
The state inspector general's office has accused Storms of breaking state ethics laws by having a financial interest in the outcome of cases involving Duke Energy while he pursued the job and by not taking proper ethical precautions. Storms was later fired by Duke.
The case touched off an ethics firestorm that has embroiled Duke for the past year.
Former Duke Energy vice president James Turner resigned in December 2010 after The Indianapolis Star reported he had sent hundreds of emails to Hardy. Duke last year also fired the president of its Indiana operations, Mike Reed, for his actions in Duke's hiring of Storms.