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.
SENATE ENROLLED ACT No. 9
AN ACT to amend the Indiana Code concerning utilities.
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 8-1-2-19 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 19. 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. 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 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. Each public
utility shall conform its depreciation accounts to such rates, so
ascertained and determined by the commission. Subject to
IC 8-1-8.5-2.1(d), the commission shall make changes in such rates of
depreciation, from time to time, as it may find necessary.
SECTION 2. IC 8-1-8.4-2, AS ADDED BY P.L.150-2011,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 2. (a) As used in this chapter, "compliance
project" means a project: that is:
(1) undertaken by an energy utility; and
(2) related to the direct or indirect compliance by the energy
utility with one (1) or more federally mandated requirements.
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(b) The term includes:
(1) an addition; or
(2) an integrity, enhancement, or a replacement project;
undertaken by an energy utility to comply with a federally mandated
requirement described in section 5(5) of this chapter.
SECTION 3. IC 8-1-8.4-4, AS ADDED BY P.L.150-2011,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 4. (a) As used in this chapter, "federally
mandated costs" means costs that an energy utility incurs has incurred,
or estimates that it will incur, in connection with a compliance
project, including capital, operating, maintenance, depreciation, tax, or
financing costs, or costs that are directly related to the preparation
and conduct of a regulatory proceeding.
(b) The term includes costs related to a compliance project and
incurred by an energy utility before the date of:
(1) the energy utility's application to the commission under
section 7 of this chapter; or
(2) an order of the commission under section 7 of this chapter
with respect to the application;
if the commission finds the costs are just and reasonable.
(b) (c) The term does not include fines or penalties assessed against
or imposed on an energy utility for violating laws, regulations, or
consent decrees related to a federally mandated requirement.
SECTION 4. IC 8-1-8.4-6, AS ADDED BY P.L.150-2011,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 6. (a) Except as provided in subsection (c), or
unless an energy utility has elected to file for:
(1) a certificate of public convenience and necessity; or
(2) the recovery of costs;
under another statute, an energy utility that seeks to recover federally
mandated costs under section 7(c) of this chapter must obtain from the
commission a certificate that states that public convenience and
necessity will be is served by a the energy utility's compliance project.
proposed by the energy utility.
(b) The commission shall issue a certificate of public convenience
and necessity under section 7(b) of this chapter if the commission finds
that the proposed compliance project will allow allows the energy
utility to comply directly or indirectly with one (1) or more federally
mandated requirements. In determining whether to grant a certificate
under this section, the commission shall examine the following factors:
(1) The following, which must be set forth in the energy utility's
application for the certificate sought, in accordance with section
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7(a) of this chapter:
(A) A description of the federally mandated requirements,
including any consent decrees related to the federally
mandated requirements, that the energy utility seeks to will
comply with through the proposed compliance project.
(B) A description of the projected federally mandated costs
associated with the proposed compliance project, including
costs that are allocated to the energy utility:
(i) in connection with regional transmission expansion
planning and construction; or
(ii) under a Federal Energy Regulatory Commission
approved tariff, rate schedule, or agreement.
(C) A description of how the proposed compliance project
allows the energy utility to comply with the federally
mandated requirements described by the energy utility under
clause (A).
(D) Alternative plans that demonstrate that the proposed
compliance project is reasonable and necessary.
(E) Information as to whether the proposed compliance project
will extend the useful life of an existing energy utility facility
and, if so, the value of that extension.
(2) Any other factors the commission considers relevant.
(c) An energy utility is not required to obtain a certificate under this
section for a project that constitutes a research and development
project.
SECTION 5. 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. An
application under this section must be filed either:
(1) before; or
(2) within a reasonable time with respect to;
any federally mandated compliance date.
(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 incurred and projected federally mandated
costs associated with the proposed compliance project; and
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(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. 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), 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.
(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
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 6. IC 8-1-8.5-2.1 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 2.1. (a) This section does not apply to the
retirement, sale, or transfer of:
(1) a public utility's electric generation facility if the
retirement, sale, or transfer is necessary in order for the
public utility to comply with a federal consent decree; or
(2) an electric generation facility that generates electricity for
sale exclusively to the wholesale market.
(b) A public utility shall notify the commission if:
(1) the public utility intends or decides to retire, sell, or
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transfer an electric generation facility with a capacity of at
least eighty (80) megawatts; and
(2) the retirement, sale, or transfer:
(A) was not set forth in; or
(B) is to take place on a date earlier than the date specified
in;
the public utility's short term action plan in the public utility's
most recently filed integrated resource plan.
(c) Upon receiving notice from a public utility under subsection
(b), the commission shall consider and may investigate, under
IC 8-1-2-58 through IC 8-1-2-60, the public utility's intention or
decision to retire, sell, or transfer the electric generation facility.
In considering the public utility's intention or decision under this
subsection, the commission shall examine the impact the
retirement, sale, or transfer would have on the public utility's
ability to meet:
(1) the public utility's planning reserve margin requirements
or other federal reliability requirements that the public utility
is obligated to meet, as described in section 13(i)(4) of this
chapter; and
(2) the reliability adequacy metrics set forth in section 13(e)
of this chapter.
(d) Before July 1, 2026, if:
(1) a public utility intends or decides to retire, sell, or transfer
an electric generation facility with a capacity of at least eighty
(80) megawatts; and
(2) the retirement, sale, or transfer:
(A) was not set forth in; or
(B) is to take place on a date earlier than the date specified
in;
the public utility's short term action plan in the public utility's
most recently filed integrated resource plan;
the commission shall not permit the public utility's depreciation
rates, as established under IC 8-1-2-19, to be amended to reflect the
accelerated date for the retirement, sale, or transfer of the electric
generation asset unless the commission finds that such an
adjustment is necessary to ensure the ability of the public utility to
provide reliable service to its customers, and that the unamended
depreciation rates would cause an unjust and unreasonable impact
on the public utility and its ratepayers.
(e) The commission may issue a general administrative order to
implement this section.
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(f) This section expires July 1, 2026.
SECTION 7. An emergency is declared for this act.
SEA 9 — Concur President of the Senate
President Pro Tempore
Speaker of the House of Representatives
Governor of the State of Indiana
Date: Time:
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