First Regular Session of the 123rd General Assembly (2023)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
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between statutes enacted by the 2022 Regular Session of the General Assembly.
HOUSE ENROLLED ACT No. 1417
AN ACT to amend the Indiana Code concerning utilities.
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 8-1-2-10 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 10. (a) Every public utility shall
keep and render to the commission, in the manner and form prescribed
by the commission, uniform accounts of all business transacted. In
formulating a system of accounting for any class of public utilities, the
commission shall consider any system of accounting established by any
federal law, commission, or department and any system authorized by
a national association of such utilities.
(b) A public utility, municipally owned utility, or not-for-profit
utility, including any utility owned, operated, or held in trust by a
consolidated city, may defer for consideration by the commission
and for future recovery costs incurred or to be incurred in a
regulatory asset consistent with the accounting rules that concern
the recognition of regulatory assets and that are in effect at the
time the deferral decision is made by the utility, including any of
the following costs, to the extent those specific costs are
incremental and are not otherwise already included for recovery
in the utility's rates:
(1) Financing costs.
(2) Depreciation expenses.
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(3) Asset retirement obligations.
(4) Operation and maintenance costs.
(5) Capital costs.
(6) Tax costs.
(7) Tax credits.
(8) Incurred costs that are directly related to the preparation
and conduct of a regulatory proceeding.
(c) Commission preapproval for the creation of a regulatory
asset is not required.
(d) Notwithstanding section 68 of this chapter, a utility
described in subsection (b) may recover through the utility's rates
over a reasonable period, as determined by the commission, costs
that are:
(1) deferred under this section; and
(2) found to be reasonable and prudent by the commission.
SECTION 2. IC 8-1-2-19 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 19. (a) Every public utility shall
carry a separate, proper and adequate depreciation account whenever
the commission, after investigation, shall determine that such
depreciation account reasonably can be required.
(b) The commission, from time to time, shall ascertain and
determine the proper and adequate rates of depreciation of the several
classes of property of each public utility. The Depreciation rates
under this subsection shall be calculated to recover a reasonable
estimate of the future cost of removing retired assets of the public
utility.
(c) A public utility's rates, tolls and charges shall be such as will
provide the amounts required over and above the reasonable and
necessary operating expenses, to maintain such property in an
operating state of efficiency corresponding to the progress of the
industry. In a proceeding in which the costs of a capital asset are
being recognized for ratemaking purposes, a public utility may
account for any asset retirement obligations and recover, through
rates charged to customers, reasonably and prudently incurred
costs associated with asset retirement obligations, to the extent the
specific asset retirement obligation costs are incremental and have
not otherwise been included in depreciation rates. Each public
utility shall conform its depreciation accounts to such the rates so
ascertained and determined by the commission.
(d) The commission shall make changes in such a public utility's
rates of depreciation, from time to time, as it may find the commission
finds necessary, including as necessary to reflect changes in:
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(1) the public utility's estimated asset retirement costs,
including all reasonable and prudent costs of removing
retired assets; and
(2) the estimated retirement dates of assets of the public
utility.
SECTION 3. IC 8-1-8.4-7, AS ADDED BY P.L.150-2011,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 7. (a) As a condition for receiving the
certificate required under section 6 of this chapter, an energy utility
must file with the commission an application that sets forth the
information described in section 6(b) of this chapter, supported with
technical information in as much detail as the commission requires.
(b) The commission shall hold a properly noticed public hearing on
each application and grant a certificate only if the commission has:
(1) made a finding that the public convenience and necessity will
be served by the proposed compliance project;
(2) approved the projected federally mandated costs associated
with the proposed compliance project; and
(3) made a finding on each of the factors set forth in section 6(b)
of this chapter.
(c) If the commission approves under subsection (b) a proposed
compliance project and the projected federally mandated costs
associated with the proposed compliance project, the following apply:
(1) Eighty percent (80%) of the approved federally mandated
costs shall be recovered by the energy utility through a periodic
retail rate adjustment mechanism that allows the timely recovery
of the approved federally mandated costs, with recovery
commencing no earlier than:
(A) the date of a final agency action regarding the federally
mandated requirement; or
(B) in the absence of a final agency action, the date on
which the federally mandated requirement becomes
effective.
The commission shall adjust the energy utility's authorized net
operating income to reflect any approved earnings for purposes of
IC 8-1-2-42(d)(3) and IC 8-1-2-42(g)(3).
(2) Twenty percent (20%) of the approved federally mandated
costs, including depreciation, allowance for funds used during
construction, and post in service carrying costs, based on the
overall cost of capital most recently approved by the commission,
shall be deferred and recovered by the energy utility as part of the
next general rate case filed by the energy utility with the
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commission.
(3) Actual costs that exceed the projected federally mandated
costs of the approved compliance project by more than
twenty-five percent (25%) shall require specific justification by
the energy utility and specific approval by the commission before
being authorized in the next general rate case filed by the energy
utility with the commission.
SECTION 4. An emergency is declared for this act.
HEA 1417 Speaker of the House of Representatives
President of the Senate
President Pro Tempore
Governor of the State of Indiana
Date: Time:
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