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Indiana Senate Bill SB0298

Indiana 2023 Regular Session

Indiana Senate Bill SB0298 Compare Versions

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1+*ES0298.1*
2+March 14, 2023
3+ENGROSSED
4+SENATE BILL No. 298
5+_____
6+DIGEST OF SB 298 (Updated March 14, 2023 1:15 pm - DI 101)
7+Citations Affected: IC 8-1.
8+Synopsis: Utility infrastructure improvement charges. Amends the
9+statute governing infrastructure improvement charges for water or
10+wastewater utilities as follows: (1) Provides that in the case of a
11+municipally owned utility or a not-for-profit utility, the adjustment
12+amount to an eligible utility's basic rates and charges for the recovery
13+of infrastructure improvement costs shall be recovered over a 12 month
14+period, regardless of the amount of time over which the infrastructure
15+improvement costs were incurred. (2) Provides that a utility may not
16+recover through an infrastructure improvement charge any
17+infrastructure improvement costs that are recovered by the utility
18+through contributions in aid of construction. (3) Provides that when an
19+eligible utility files a petition for an adjustment amount with the
20+Indiana utility regulatory commission (IURC), the office of utility
21+consumer counselor (OUCC) may examine information of the eligible
22+utility, limited to confirming: (A) that the infrastructure improvements
23+for which recovery is sought are eligible for cost recovery under the
24+statute; and (B) the proper calculation of the proposed adjustment
25+(Continued next page)
26+Effective: Upon passage.
27+Koch, Charbonneau
28+(HOUSE SPONSOR — SOLIDAY)
29+January 12, 2023, read first time and referred to Committee on Utilities.
30+February 9, 2023, amended, reported favorably — Do Pass.
31+February 13, 2023, read second time, ordered engrossed. Engrossed.
32+February 14, 2023, read third time, passed. Yeas 49, nays 0.
33+HOUSE ACTION
34+February 28, 2023, read first time and referred to Committee on Utilities, Energy and
35+Telecommunications.
36+March 14, 2023, reported — Do Pass.
37+ES 298—LS 6904/DI 101 Digest Continued
38+amount. (Existing law provides that the OUCC may examine the
39+information of an eligible utility to confirm these matters, but does not
40+specify that the OUCC's examination is limited to the confirmation of
41+these matters.) (4) Provides that if the IURC finds that an eligible
42+utility's proposed adjustment amount has not been calculated correctly,
43+the IURC shall: (A) provide the correct calculation of the adjustment
44+amount; and (B) allow the eligible utility to implement the corrected
45+adjustment amount. (5) Amends the factors that the IURC may
46+consider in determining the amount of allowable recovery of
47+infrastructure improvement costs for a municipally owned utility or a
48+not-for-profit utility to provide that the IURC may consider other
49+expenses that the IURC considers appropriate, including money for the
50+payment of any taxes that may be assessed against: (A) a municipally
51+owned utility; or (B) a not-for-profit utility or its property; as
52+applicable. (6) Specifies that in the case of a municipally owned utility
53+or not-for-profit utility, the statute's cap limiting total adjustment
54+revenues to 10% of an eligible utility's approved base revenue level
55+applies over the course of each 12 month recovery period. (7) Amends
56+the statute's provisions requiring an eligible utility to reconcile the
57+difference between adjustment revenues and infrastructure
58+improvement costs as follows: (A) Specifies that the reconciliation
59+must occur at the end of each 12 month recovery period. (B) Provides
60+that in the case of a municipally owned utility or a not-for-profit utility,
61+the adjustment amount shall be reset to zero after all previously
62+approved infrastructure improvement costs have been collected.
63+ES 298—LS 6904/DI 101ES 298—LS 6904/DI 101 March 14, 2023
164 First Regular Session of the 123rd General Assembly (2023)
265 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
366 Constitution) is being amended, the text of the existing provision will appear in this style type,
467 additions will appear in this style type, and deletions will appear in this style type.
568 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
669 provision adopted), the text of the new provision will appear in this style type. Also, the
770 word NEW will appear in that style type in the introductory clause of each SECTION that adds
871 a new provision to the Indiana Code or the Indiana Constitution.
972 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
1073 between statutes enacted by the 2022 Regular Session of the General Assembly.
11-SENATE ENROLLED ACT No. 298
12-AN ACT to amend the Indiana Code concerning utilities.
74+ENGROSSED
75+SENATE BILL No. 298
76+A BILL FOR AN ACT to amend the Indiana Code concerning
77+utilities.
1378 Be it enacted by the General Assembly of the State of Indiana:
14-SECTION 1. IC 8-1-31-8, AS AMENDED BY P.L.91-2017,
79+1 SECTION 1. IC 8-1-31-8, AS AMENDED BY P.L.91-2017,
80+2 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
81+3 UPON PASSAGE]: Sec. 8. (a) Except as provided in subsection (d), an
82+4 eligible utility may file with the commission a petition setting forth rate
83+5 schedules establishing an amount that will allow the adjustment of the
84+6 eligible utility's basic rates and charges to provide for recovery of
85+7 infrastructure improvement costs. The adjustment:
86+8 (1) shall be calculated as a monthly fixed charge based upon
87+9 meter size;
88+10 (2) shall not include recovery of any infrastructure
89+11 improvement costs recovered by the eligible utility through
90+12 contributions in aid of construction (as defined in
91+13 IC 8-1-2-101.6); and
92+14 (3) in the case of a municipally owned utility or a
93+15 not-for-profit utility, shall be recovered over a twelve (12)
94+ES 298—LS 6904/DI 101 2
95+1 month period, regardless of the amount of time over which
96+2 the infrastructure improvement costs were incurred.
97+3 (b) The eligible utility shall serve the office of the utility consumer
98+4 counselor a copy of its filing at the time of its filing with the
99+5 commission.
100+6 (c) Publication of notice of the filing is not required.
101+7 (d) An eligible utility may not file a petition under this section in the
102+8 same calendar year in which the eligible utility has filed a request for
103+9 a general increase in the basic rates and charges of the eligible utility.
104+10 SECTION 2. IC 8-1-31-9, AS AMENDED BY P.L.104-2016,
105+11 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
106+12 UPON PASSAGE]: Sec. 9. (a) When a petition is filed under section
107+13 8 of this chapter, the commission shall conduct a hearing.
108+14 (b) The office of the utility consumer counselor may do the
109+15 following:
110+16 (1) Examine information of the eligible utility, to confirm: limited
111+17 to confirmation of the following:
112+18 (A) That the infrastructure improvements are in accordance
113+19 with section 5 of this chapter. and
114+20 (B) Proper calculation of the adjustment amount proposed
115+21 under section 8(a) of this chapter. and
116+22 (2) Submit a report, limited to confirmation of the information
117+23 described in subdivision (1), to the commission not later than
118+24 thirty (30) days after the petition is filed.
119+25 (c) The commission shall hold the hearing and issue its order not
120+26 later than sixty (60) days after the petition is filed.
121+27 (d) If the commission finds that a petition filed under section 8 of
122+28 this chapter complies with the requirements of this chapter, the
123+29 commission shall enter an order approving the petition. If the
124+30 commission finds that the adjustment amount has not been
125+31 calculated correctly, the commission shall:
126+32 (1) provide the correct calculation of the adjustment amount;
127+33 and
128+34 (2) allow the eligible utility to implement the corrected
129+35 adjustment amount.
130+36 SECTION 3. IC 8-1-31-11.5, AS AMENDED BY P.L.61-2022,
131+37 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
132+38 UPON PASSAGE]: Sec. 11.5. In determining the amount of allowable
133+39 recovery of infrastructure improvement costs for a municipally owned
134+40 utility, the commission may consider the following factors:
135+41 (1) Adequate money for making extensions and replacements of
136+42 eligible infrastructure improvements, to the extent not provided
137+ES 298—LS 6904/DI 101 3
138+1 for through depreciation, as provided in IC 8-1.5-3-8(c).
139+2 (2) Debt service on funds borrowed to pay for eligible
140+3 infrastructure improvements.
141+4 (3) Depreciation expenses on eligible infrastructure
142+5 improvements based on the same rate or rates of depreciation
143+6 approved by the commission for the calculation of depreciation in
144+7 the utility's most recent rate case.
145+8 (4) Other components expenses that the commission considers
146+9 appropriate, including money for the payment of any taxes that
147+10 may be assessed against the municipally owned utility.
148+11 SECTION 4. IC 8-1-31-11.6, AS AMENDED BY P.L.61-2022,
149+12 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
150+13 UPON PASSAGE]: Sec. 11.6. In determining the amount of allowable
151+14 recovery of infrastructure improvement costs for a not-for-profit utility,
152+15 the commission may consider the following factors:
153+16 (1) Adequate money for making extensions and replacements of
154+17 eligible infrastructure improvements.
155+18 (2) Debt service on funds borrowed to pay for eligible
156+19 infrastructure improvements.
157+20 (3) Other components expenses that the commission considers
158+21 appropriate, including money for the payment of any taxes that
159+22 may be assessed against the not-for-profit utility or its
160+23 property.
161+24 SECTION 5. IC 8-1-31-13, AS AMENDED BY P.L.61-2022,
162+25 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
163+26 UPON PASSAGE]: Sec. 13. (a) The commission may not approve a
164+27 petition filed under section 8 or 10 of this chapter to the extent it
165+28 would:
166+29 (1) for a public utility, produce total adjustment revenues
167+30 exceeding ten percent (10%) of the eligible utility's base
168+31 revenue level approved by the commission in the eligible
169+32 utility's most recent general rate proceeding; or
170+33 (2) for a municipally owned or not-for-profit utility, produce
171+34 total adjustment revenues exceeding over the course of each
172+35 twelve (12) month recovery period that exceed ten percent
173+36 (10%) of the eligible utility's base revenue level approved by the
174+37 commission in the eligible utility's most recent general rate
175+38 proceeding.
176+39 (b) Subsection (a) does not apply to:
177+40 (1) infrastructure improvement costs associated with eligible
178+41 infrastructure improvements that are placed in service due to the
179+42 construction, reconstruction, or improvement of a highway, street,
180+ES 298—LS 6904/DI 101 4
181+1 or road (as defined in IC 8-23-1-23), including projects under
182+2 IC 8-25; or
183+3 (2) property taxes associated with eligible infrastructure
184+4 improvements.
185+5 SECTION 6. IC 8-1-31-14, AS AMENDED BY P.L.61-2022,
186+6 SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
187+7 UPON PASSAGE]: Sec. 14. An adjustment amount proposed under
188+8 section 8 of this chapter may be calculated based on a reasonable
189+9 estimate of meter size in the period in which the charge will be in
190+10 effect. At the end of each twelve (12) month recovery period following
191+11 the date on which the commission initially approves an adjustment
192+12 amount for an eligible utility following the eligible utility's most recent
193+13 general rate case, and using procedures approved by the commission,
194+14 the eligible utility shall reconcile the difference between adjustment
195+15 revenues and infrastructure improvement costs during that the
196+16 recovery period and recover or refund the difference, as appropriate,
197+17 through additional adjustments. In the case of an eligible utility that
198+18 is a municipally owned utility or a not-for-profit utility, the
199+19 adjustment amount shall be reset to zero (0) after all previously
200+20 approved infrastructure improvement costs have been collected,
201+21 with the exception of any amount necessary to reconcile the
202+22 difference between adjustment revenues and infrastructure
203+23 improvement costs.
204+24 SECTION 7. IC 8-1-31-15.5, AS ADDED BY P.L.61-2022,
205+25 SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
206+26 UPON PASSAGE]: Sec. 15.5. (a) This section applies only to an
207+27 eligible utility that is:
208+28 (1) a municipally owned utility; or
209+29 (2) a not-for-profit utility.
210+30 (b) An eligible utility's adjustment amount approved under section
211+31 8 or 10 of this chapter shall be reset to zero (0) upon the approval of
212+32 new basic rates and charges for the eligible utility by the commission
213+33 in a general rate case that results in the inclusion of eligible
214+34 infrastructure improvements in the eligible utility's basic rates and
215+35 charges. However, an adjustment amount approved under this
216+36 chapter shall not be reset to zero (0) to the extent infrastructure
217+37 improvement costs approved previously by the commission have
218+38 not been fully collected.
219+39 SECTION 8. An emergency is declared for this act.
220+ES 298—LS 6904/DI 101 5
221+COMMITTEE REPORT
222+Madam President: The Senate Committee on Utilities, to which was
223+referred Senate Bill No. 298, has had the same under consideration and
224+begs leave to report the same back to the Senate with the
225+recommendation that said bill be AMENDED as follows:
226+Page 1, delete lines 1 through 15, begin a new paragraph and insert:
227+"SECTION 1. IC 8-1-31-8, AS AMENDED BY P.L.91-2017,
15228 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
16229 UPON PASSAGE]: Sec. 8. (a) Except as provided in subsection (d), an
17230 eligible utility may file with the commission a petition setting forth rate
18231 schedules establishing an amount that will allow the adjustment of the
19232 eligible utility's basic rates and charges to provide for recovery of
20233 infrastructure improvement costs. The adjustment:
21234 (1) shall be calculated as a monthly fixed charge based upon
22235 meter size;
23236 (2) shall not include recovery of any infrastructure
24237 improvement costs recovered by the eligible utility through
25238 contributions in aid of construction (as defined in
26239 IC 8-1-2-101.6); and
27240 (3) in the case of a municipally owned utility or a
28241 not-for-profit utility, shall be recovered over a twelve (12)
29242 month period, regardless of the amount of time over which
30243 the infrastructure improvement costs were incurred.
31244 (b) The eligible utility shall serve the office of the utility consumer
32245 counselor a copy of its filing at the time of its filing with the
33246 commission.
34247 (c) Publication of notice of the filing is not required.
35-SEA 298 2
36248 (d) An eligible utility may not file a petition under this section in the
37249 same calendar year in which the eligible utility has filed a request for
38-a general increase in the basic rates and charges of the eligible utility.
39-SECTION 2. IC 8-1-31-9, AS AMENDED BY P.L.104-2016,
40-SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
41-UPON PASSAGE]: Sec. 9. (a) When a petition is filed under section
42-8 of this chapter, the commission shall conduct a hearing.
43-(b) The office of the utility consumer counselor may do the
44-following:
45-(1) Examine information of the eligible utility, to confirm: limited
46-to confirmation of the following:
47-(A) That the infrastructure improvements are in accordance
48-with section 5 of this chapter. and
49-(B) Proper calculation of the adjustment amount proposed
50-under section 8(a) of this chapter. and
51-(2) Submit a report, limited to confirmation of the information
52-described in subdivision (1), to the commission not later than
53-thirty (30) days after the petition is filed.
54-(c) The commission shall hold the hearing and issue its order not
55-later than sixty (60) days after the petition is filed.
56-(d) If the commission finds that a petition filed under section 8 of
57-this chapter complies with the requirements of this chapter, the
58-commission shall enter an order approving the petition. If the
59-commission finds that the adjustment amount has not been
60-calculated correctly, the commission shall:
61-(1) provide the correct calculation of the adjustment amount;
62-and
63-(2) allow the eligible utility to implement the corrected
64-adjustment amount.
65-SECTION 3. IC 8-1-31-11.5, AS AMENDED BY P.L.61-2022,
66-SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
67-UPON PASSAGE]: Sec. 11.5. In determining the amount of allowable
68-recovery of infrastructure improvement costs for a municipally owned
69-utility, the commission may consider the following factors:
70-(1) Adequate money for making extensions and replacements of
71-eligible infrastructure improvements, to the extent not provided
72-for through depreciation, as provided in IC 8-1.5-3-8(c).
73-(2) Debt service on funds borrowed to pay for eligible
74-infrastructure improvements.
75-(3) Depreciation expenses on eligible infrastructure
76-improvements based on the same rate or rates of depreciation
77-approved by the commission for the calculation of depreciation in
78-SEA 298 3
79-the utility's most recent rate case.
80-(4) Other components expenses that the commission considers
81-appropriate, including money for the payment of any taxes that
82-may be assessed against the municipally owned utility.
83-SECTION 4. IC 8-1-31-11.6, AS AMENDED BY P.L.61-2022,
84-SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
85-UPON PASSAGE]: Sec. 11.6. In determining the amount of allowable
86-recovery of infrastructure improvement costs for a not-for-profit utility,
87-the commission may consider the following factors:
88-(1) Adequate money for making extensions and replacements of
89-eligible infrastructure improvements.
90-(2) Debt service on funds borrowed to pay for eligible
91-infrastructure improvements.
92-(3) Other components expenses that the commission considers
93-appropriate, including money for the payment of any taxes that
94-may be assessed against the not-for-profit utility or its
95-property.
96-SECTION 5. IC 8-1-31-13, AS AMENDED BY P.L.61-2022,
250+a general increase in the basic rates and charges of the eligible utility.".
251+Page 2, delete lines 1 through 5.
252+Page 3, delete lines 20 through 35, begin a new paragraph and
253+insert:
254+"SECTION 5. IC 8-1-31-13, AS AMENDED BY P.L.61-2022,
97255 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
98256 UPON PASSAGE]: Sec. 13. (a) The commission may not approve a
99257 petition filed under section 8 or 10 of this chapter to the extent it
100258 would:
101259 (1) for a public utility, produce total adjustment revenues
102260 exceeding ten percent (10%) of the eligible utility's base
103261 revenue level approved by the commission in the eligible
104262 utility's most recent general rate proceeding; or
263+ES 298—LS 6904/DI 101 6
105264 (2) for a municipally owned or not-for-profit utility, produce
106265 total adjustment revenues exceeding over the course of each
107266 twelve (12) month recovery period that exceed ten percent
108267 (10%) of the eligible utility's base revenue level approved by the
109268 commission in the eligible utility's most recent general rate
110269 proceeding.
111270 (b) Subsection (a) does not apply to:
112271 (1) infrastructure improvement costs associated with eligible
113272 infrastructure improvements that are placed in service due to the
114273 construction, reconstruction, or improvement of a highway, street,
115274 or road (as defined in IC 8-23-1-23), including projects under
116275 IC 8-25; or
117276 (2) property taxes associated with eligible infrastructure
118-improvements.
119-SECTION 6. IC 8-1-31-14, AS AMENDED BY P.L.61-2022,
120-SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
121-SEA 298 4
122-UPON PASSAGE]: Sec. 14. An adjustment amount proposed under
123-section 8 of this chapter may be calculated based on a reasonable
124-estimate of meter size in the period in which the charge will be in
125-effect. At the end of each twelve (12) month recovery period following
126-the date on which the commission initially approves an adjustment
127-amount for an eligible utility following the eligible utility's most recent
128-general rate case, and using procedures approved by the commission,
129-the eligible utility shall reconcile the difference between adjustment
130-revenues and infrastructure improvement costs during that the
131-recovery period and recover or refund the difference, as appropriate,
132-through additional adjustments. In the case of an eligible utility that
133-is a municipally owned utility or a not-for-profit utility, the
134-adjustment amount shall be reset to zero (0) after all previously
135-approved infrastructure improvement costs have been collected,
136-with the exception of any amount necessary to reconcile the
137-difference between adjustment revenues and infrastructure
138-improvement costs.
139-SECTION 7. IC 8-1-31-15.5, AS ADDED BY P.L.61-2022,
140-SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
141-UPON PASSAGE]: Sec. 15.5. (a) This section applies only to an
142-eligible utility that is:
143-(1) a municipally owned utility; or
144-(2) a not-for-profit utility.
145-(b) An eligible utility's adjustment amount approved under section
146-8 or 10 of this chapter shall be reset to zero (0) upon the approval of
147-new basic rates and charges for the eligible utility by the commission
148-in a general rate case that results in the inclusion of eligible
149-infrastructure improvements in the eligible utility's basic rates and
150-charges. However, an adjustment amount approved under this
151-chapter shall not be reset to zero (0) to the extent infrastructure
152-improvement costs approved previously by the commission have
153-not been fully collected.
154-SECTION 8. An emergency is declared for this act.
155-SEA 298 President of the Senate
156-President Pro Tempore
157-Speaker of the House of Representatives
158-Governor of the State of Indiana
159-Date: Time:
160-SEA 298
277+improvements.".
278+and when so amended that said bill do pass.
279+(Reference is to SB 298 as introduced.)
280+KOCH, Chairperson
281+Committee Vote: Yeas 10, Nays 0.
282+_____
283+COMMITTEE REPORT
284+Mr. Speaker: Your Committee on Utilities, Energy and
285+Telecommunications, to which was referred Senate Bill 298, has had
286+the same under consideration and begs leave to report the same back
287+to the House with the recommendation that said bill do pass.
288+(Reference is to SB 298 as printed February 10, 2023.)
289+SOLIDAY
290+Committee Vote: Yeas 11, Nays 0
291+ES 298—LS 6904/DI 101