Introduced Version
SENATE BILL No. 247
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 8-1-30.3.
Synopsis: Water and wastewater utility infrastructure. Amends the
statute concerning the acquisition of water or wastewater utilities to
provide that if: (1) the appraised value of the utility property to be
acquired does not exceed $3,000,000; and (2) the purchase price for the
utility property is less than the appraised value; the utility company
seeking to acquire the utility property of an offered utility: (A) is not
required to file a petition under the statute; and (B) may instead submit
to the IURC a 30 day administrative filing under the IURC's existing
rules; to obtain the rate treatment authorized under the statute with
respect to any cost differential associated with the acquisition. Sets
forth certain information that must be included in an acquiring utility
company's 30 day administrative filing.
Effective: July 1, 2024.
Koch
January 10, 2024, read first time and referred to Committee on Utilities.
2024 IN 247—LS 6951/DI 101 Introduced
Second Regular Session of the 123rd General Assembly (2024)
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.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2023 Regular Session of the General Assembly.
SENATE BILL No. 247
A BILL FOR AN ACT to amend the Indiana Code concerning
utilities.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 8-1-30.3-5, AS AMENDED BY P.L.61-2022,
2 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2024]: Sec. 5. (a) Except as provided in section 6.6 of this
4 chapter, this section applies if:
5 (1) a utility company acquires property from an offered utility in
6 a transaction involving a willing buyer and a willing seller; and
7 (2) at least one (1) utility company described in subdivision (1) is
8 subject to the jurisdiction of the commission under this article.
9 (b) Subject to subsection (c), there is a rebuttable presumption that
10 a cost differential is reasonable.
11 (c) If the acquisition:
12 (1) is made under IC 8-1.5-2-6.1, and to the extent the purchase
13 price does not exceed the appraised value as determined under
14 IC 8-1.5-2-5; or
15 (2) is not made under IC 8-1.5-2-6.1, and to the extent the
16 purchase price does not exceed the appraised value as determined
17 under section 5.5 of this chapter;
2024 IN 247—LS 6951/DI 101 2
1 the purchase price is considered reasonable for purposes of subsection
2 (d) and any resulting cost differential is considered reasonable.
3 (d) Before closing on the acquisition, the utility company that
4 acquires the utility property may petition the commission to include
5 any cost differential as part of its rate base in future rate cases. The
6 commission shall approve the petition if the commission finds the
7 following:
8 (1) The utility property is used and useful to the offered utility in
9 providing water service, wastewater service, or both water and
10 wastewater service.
11 (2) The offered utility is too small to capture economies of scale
12 or has failed to furnish or maintain adequate, efficient, safe, and
13 reasonable service and facilities.
14 (3) The utility company will improve economies of scale or, if
15 otherwise needed, make reasonable and prudent improvements to
16 the offered utility's plant, the offered utility's operations, or both,
17 so that customers of the offered utility will receive adequate,
18 efficient, safe, and reasonable service.
19 (4) The acquisition of the utility property is the result of a mutual
20 agreement made at arms length.
21 (5) The actual purchase price of the utility property is reasonable.
22 (6) The utility company and the offered utility are not affiliated
23 and share no ownership interests.
24 (7) The rates charged by the utility company will not increase
25 unreasonably in future general rate cases solely as a result of
26 acquiring the utility property from the offered utility. For purposes
27 of this subdivision, the rates and charges will not increase
28 unreasonably in future general rate cases so long as the net
29 original cost proposed to be recorded under subsection (f) is not
30 greater than two percent (2%) of the acquiring utility's net original
31 cost rate base as determined in the acquiring utility's most recent
32 general rate case, plus any adjustments to the rate base under
33 IC 8-1-31 and IC 8-1-31.7 that have occurred after the rate case.
34 If the amount proposed to be recorded under subsection (f) is
35 greater than two percent (2%) of the acquiring utility's net original
36 cost rate base as determined in the acquiring utility's most recent
37 general rate case, plus any adjustments to the rate base under
38 IC 8-1-31 and IC 8-1-31.7 that have occurred after the rate case,
39 the commission shall proceed to determine whether the rates
40 charged by the utility company will increase unreasonably in
41 future general rate cases solely as a result of acquiring the utility
42 property from the offered utility and, in making the determination,
2024 IN 247—LS 6951/DI 101 3
1 may consider evidence of:
2 (A) the anticipated dollar value increase; and
3 (B) the increase as a percentage of the average bill.
4 (8) The cost differential will be added to the utility company's rate
5 base to be amortized as an addition to expense over a reasonable
6 time with corresponding reductions in the rate base.
7 (e) In connection with its petition under subsection (d), the
8 acquiring utility company shall provide the following:
9 (1) Notice to customers of the acquiring utility company that a
10 petition has been filed with the commission under this chapter.
11 The notice provided under this subdivision must include the cause
12 number assigned to the petition. Notice under this subdivision
13 may be provided to customers in a billing insert.
14 (2) Notice to the office of the utility consumer counselor.
15 (3) A statement of known infrastructure, environmental, or other
16 issues affecting the offered utility, and the process for
17 determining reasonable and prudent improvements upon
18 completing the acquisition.
19 (f) In a proceeding under subsection (d), the commission shall issue
20 its final order not later than two hundred ten (210) days after the filing
21 of the petitioner's case in chief. If the commission grants the petition,
22 the commission's order shall authorize the acquiring utility company to
23 make accounting entries recording the acquisition and that reflect:
24 (1) the full purchase price;
25 (2) incidental expenses; and
26 (3) other costs of acquisition;
27 as the net original cost of the utility plant in service assets being
28 acquired, allocated in a reasonable manner among appropriate utility
29 plant in service accounts.
30 SECTION 2. IC 8-1-30.3-6.6 IS ADDED TO THE INDIANA
31 CODE AS A NEW SECTION TO READ AS FOLLOWS
32 [EFFECTIVE JULY 1, 2024]: Sec. 6.6. (a) This section does not
33 apply to a petition that is filed with the commission under section
34 5 of this chapter before July 1, 2024.
35 (b) Notwithstanding any other law or any rule of the
36 commission, if:
37 (1) the appraised value of the utility property to be acquired,
38 as determined under:
39 (A) section 5.5 of this chapter; or
40 (B) IC 8-1.5-2-5;
41 as applicable, does not exceed three million dollars
42 ($3,000,000); and
2024 IN 247—LS 6951/DI 101 4
1 (2) the purchase price for the utility property is less than the
2 appraised value;
3 a utility company seeking to acquire the utility property of an
4 offered utility is not required to file a petition under section 5 of
5 this chapter, and may instead submit to the commission a thirty
6 (30) day administrative filing under 170 IAC 1-6, to obtain the
7 relief set forth in section 5 of this chapter.
8 (c) A thirty (30) day administrative filing authorized under
9 subsection (b) must include the following:
10 (1) A copy of the purchase agreement entered into between
11 the acquiring utility company and the offered utility.
12 (2) A copy of the journal entry reflecting the accounting
13 entries recording the acquisition in accordance with section
14 5(f) of this chapter.
15 (3) A copy of the appraisal of the utility property under:
16 (A) section 5.5 of this chapter; or
17 (B) IC 8-1.5-2-5;
18 as applicable.
19 (4) Any other information required to be submitted in
20 connection with a thirty (30) day administrative filing under
21 170 IAC 1-6.
2024 IN 247—LS 6951/DI 101