LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7319 NOTE PREPARED: Jan 8, 2025
BILL NUMBER: HB 1581 BILL AMENDED:
SUBJECT: Community Solar Facilities.
FIRST AUTHOR: Rep. Hamilton BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill requires the Indiana Utility Regulatory Commission (IURC) to adopt
rules governing community solar facilities not later than July 1, 2026.
It provides that, not later than 180 days after adoption of the rules, an electricity provider shall begin: (1)
allowing interconnection of the electricity provider's facilities with community solar facilities in which at
least three of the electricity provider's customers have entered into a subscription; and (2) crediting the
electricity provider's subscribing customers for the amount of electricity from the community solar facility
for which the customer subscribes.
It also requires the IURC to: (1) establish an interconnection working group composed of representatives of
electricity suppliers and other stakeholders with respect to electric utility service; and (2) implement the
working group's recommendations regarding creation, revision, or elimination of policies, processes, tariffs,
rules, or standards relating to the interconnection of community solar facilities and electricity suppliers as
necessary for transparent, accurate, and efficient implementation of community solar facilities.
Effective Date: July 1, 2025.
Explanation of State Expenditures: Interconnections Working Group: This bill's requirement of the IURC
to establish an interconnections working group by October 1, 2025, to review policies, processes, tariffs,
rules, and standards relating to the interconnection of community solar facilities and electricity suppliers.
It also requires the working group to submit recommendations to the IURC no later than March 31, 2025.
The IURC's workload will increase through providing staff oversight for the working group. Additionally,
the expenses of the working group shall be paid from funds appropriated to the IURC.
The IURC will pay for the mileage and travel expenses of working group members who are not state
employees or are state employees but not members of the General Assembly. Per diem, mileage, and travel
allowances of working group members who are also members of the General Assembly will be paid from
appropriations to the Legislative Council or the Legislative Services Agency. The total reimbursement
expenses for the working group is dependant on how many members the chairman of the IURC appoints, and
HB 1581 1 how often travel is necessary for the members that comprise the working group.
IURC Rule Adoption: The IURC shall adopt rules governing solar facilities, solar credit rate, uniform fees,
consumer protection standards, processes for interconnection, and cost recovery for reasonable administrative
expenses before FY 2027. It also requires the IURC to adopt rules necessary to implement the
recommendations of the working group not later than October 1, 2026. This represents an additional
workload on the IURC, but it should be able to be accomplished within existing resources.
Additional Information: The operating budget of the IURC is funded by regulated utilities operating in
Indiana. The rate at which to bill the utilities is based on the agencies' budgets, less reversions, divided by
the total amount of gross intrastate operating revenue received by the regulated utilities for the previous fiscal
year. Based on this formula, utilities are currently billed approximately 0.15% of their gross intrastate
operating revenues to fund the IURC.
Explanation of State Revenues: Solar Credits: Electricity providers that file a community solar facility
program plan may remit less sales tax revenue to the state as a result of an increased proportion of energy
being self-generated by the community and credited to their electricity bills. The majority of sales tax
revenue is distributed to the General Fund. The amount of reduced revenue would be dependent on the level
of community solar facility adoption and the rates the IURC establishes for solar credits.
Explanation of Local Expenditures: If municipal utilities offer a community solar facility program plan,
there could be an increase in workload and local expenditures related to program implementation.
Solar Credits: If local units are customers of electricity providers that file a community solar facility program
plan, and those units receive credits for subscribing to receive energy from that facility, there could be
decreased local expenditures as a result of the bill.
Community Solar Facility Organization: The bill requires a community solar facility organization to submit
an annual report to the IURC regarding the ownership, management, operation, statistical results, and future
plans of the community solar facility. As a result, there could be an increase in workload and local
expenditures related to the application, administration of the facility, and reporting requirements.
Any fiscal impact on local units as a result of the bill is indeterminable and will depend on local decisions.
Additional Information : The bill provides that a community solar facility organization or subscriber are not
a public utility subject to IC 8-1-2 solely as a result of the community solar facility organization's ownership
or operation of a community solar facility, and a subscriber's subscription in a community solar facility.
Explanation of Local Revenues:
State Agencies Affected: Indiana Utility Regulatory Commission, Legislative Services Agency
Local Agencies Affected: Municipal utilities
Information Sources:
Fiscal Analyst: Abdulrahman Abdulkadri, 317-232-9852.
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