LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 7049 NOTE PREPARED: Jan 8, 2024
BILL NUMBER: HB 1382 BILL AMENDED:
SUBJECT: Retirement of Electric Generating Units.
FIRST AUTHOR: Rep. Ledbetter BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill amends the descriptions of "reliability" and "resiliency" as attributes of
electric utility service in the Indiana Code section that sets forth state policy concerning Indiana's electric
generation resource mix, energy infrastructure, and electric service ratemaking constructs. The bill also
defines an "electric generating unit".
The bill repeals the Indiana Code section concerning the retirement, sale, or transfer of electric generation
facilities. It provides that the Indiana Utility Regulatory Commission (IURC) has the authority to approve
or deny the retirement of an electric generating unit. It also provides that before retiring a unit, a public utility
must apply to the IURC for an order approving the retirement. The bill provides that in an application to
retire a unit, a public utility must provide evidence regarding the costs of retiring the unit and demonstrate
that the retirement will result in a cost savings to customers. It also requires the IURC to issue an order
approving, approving with conditions, or denying; an application to retire a unit not later than 180 days after
receiving the application. The bill provides that there is a rebuttable presumption against the retirement of
a unit.
The bill prohibits the IURC from approving the retirement of unit, authorizing a surcharge in connection with
the retirement of a unit, or authorizing or allowing for the recovery of costs in connection with the retirement
of a unit unless the IURC makes certain findings.
This bill requires the IURC to include in its annual report certain information about the retirement of electric
generating units with respect to the state fiscal year covered by the report. It also authorizes the IURC to
issue a general administrative order or adopt administrative rules to implement the bill's provisions.
HB 1382 1 The bill also makes corresponding changes to the Indiana Code section concerning public utilities'
depreciation rates.
Effective Date: July 1, 2024.
Explanation of State Expenditures: This bill would increase the workload of the IURC to (1) report certain
information in the Commission’s annual report, (2) issue general administrative orders, and (3) adopt rules,
concerning the retirement of fossil-fuel fired electric generating facilities in the state. The bill is also
expected to decrease IURC workload to consider transfer and sale requests for electric generating facilities.
Additional Information - The IURC currently receives reports concerning the retirement, sale, or transfer of
electric generating facilities. Under the bill, an electric generating facility can only be retired. As a result,
the bill could decrease the number of requests filed with the IURC concerning the sale or transfer of electric
generating facilities.
Since CY 2021, a total of six coal-fired electric generating facilities have been retired, with five of these
retirements occurring during CY 2021. During that time period, no natural gas or other fuel-type facilities
were retired. No information was available in the IURC’s annual report concerning the sale or transfer of
electric generating facilities.
Explanation of State Revenues: Because an electric-generating facility can be retired under current law,
the bill is not expected to have any impact on utility rate adjustments from stranded costs through June 30,
2026. However, because the bill removes the current sunset on retirement of electric generating facilities,
for any retirements that occur after this date, utility rates could be adjusted to allow for the recovery of
stranded costs from rate payers. This could result in an increase in revenue the state receives from sales tax
collections.
Additional Information - Sales Tax revenue is deposited in the state General Fund (99.838%), Commuter Rail
Service Fund (0.131%), and Industrial Rail Service Fund (0.031%).
Explanation of Local Expenditures: To the extent a municipally-owned electric utility had intended to sell
or transfer a facility, the bill will remove this ability.
Explanation of Local Revenues: The bill would allow municipally-owned electric utilities to recover
stranded costs for facility retirements that occur after June 30, 2026. Increases in utility revenue for local
units are indeterminable.
State Agencies Affected: IURC.
Local Agencies Affected: Municipally-owned electric utilities.
Information Sources: https://www.in.gov/iurc/files/IURC-2023-Annual-Report.pdf
Fiscal Analyst: Bill Brumbach, 317-232-9559.
HB 1382 2