The state is paying $625,000 to settle a lawsuit in which a former member of the Indiana Utility Regulatory Commission claimed he was illegally fired by Gov. Mike Braun.
The governor’s office announced the deal Saturday with former utility commission member Andy Zay, calling it a “mutually agreeable settlement.”
Zay argued in his suit filed Aug. 10 that Braun lacked sufficient reason to replace him on the commission and described a pattern of the governor’s office infringing on the commission’s statutory duty as an “impartial fact-finding body.”
Braun’s attorneys had responded to Zay’s lawsuit with claims that Zay, a former state senator, had improperly spent thousands of dollars in campaign funds on gifts to commission staffers and improperly awarded bonuses to IURC employees.
Deal covers Zay’s salary and legal costs
Neither side admitted any wrongdoing under the settlement terms that were released by the governor’s office.
“This Agreement does not constitute an admission by any Party that any of them have violated any law, and each specifically denies having done so,” the terms said.
The settlement includes $485,000 in payments to Zay that were described as “the reasonable net present value of the remaining salary and benefits if Zay had served through March 31, 2030.”
That date is when Zay’s term as one of the five IURC commissioners was to expire.
The remaining $140,000 will be paid to Zay and the Indianapolis law firm Betz + Blevins to cover his legal expenses. The law firm Kroger, Gardis & Regas was representing the governor’s office in the case.
Braun announced in December he was appointing Zay as the new chair of the commission that determines what residents and businesses in most of the state pay for electricity, natural gas, water and other utility services.
Zay, a Republican from Huntington, resigned from the state Senate seat he had held since 2016 on Jan. 8 and began work at the IURC on Jan. 12.
But Braun demoted Zay from the chair position in June, days after he was part of a 3-1 commission majority that approved a contentious $71 million rate hike for AES Indiana electricity customers.
Braun denounced that rate hike and said “affordability is my top priority” in announcing he was removing Zay as commission chair.
The governor went further on Aug. 3 in firing Zay from the commission entirely. Braun soon replaced him with former Indianapolis City-County Councilor Joshua Bain.
The Indiana Office of Utility Consumer Counselor and Citizens Action Coalition have asked the commission to reconsider the AES rate increase decision.
Braun, Zay amicable in statements
Zay said in a statement released by the governor’s office that he was proud of his work with the IURC “balancing the affordability of services needed by all citizens … against the costs for maintaining and supplying those services.”
“I am disappointed that I will no longer be directly involved in this important work, but I believe resolution with the State is in everyone’s best interest at this time,” Zay’s statement said. “I appreciate Governor Braun’s willingness to reach satisfactory terms so that we can all move forward in a positive direction.”
Zay’s lawsuit described meetings and phone calls involving Braun and top administration officials seeking to discuss the AES rate case. Zay claimed those crossed into banned “ex parte” communications — seeking to sway a decision-maker in a case without the other parties to the case present.
A Marion County judge had scheduled a court hearing for Thursday on Zay’s request for an order reinstating him to the commission.
Braun said in the governor’s office statement that he was pleased with the resolution.
“This agreement allows all involved to move forward constructively in the best interest of Hoosiers,” Braun said. “I want to recognize Andy for his service to the state. Public service is demanding work, and I appreciate his contributions over the course of a decade on behalf of Hoosiers.”
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