Introduced Version
SENATE BILL No. 517
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-8-13-7; IC 8-1-8.5.
Synopsis: Purchase of coal fired generation facilities. Provides that:
(1) a public utility that provides electric utility service in Indiana
(public utility) may not enter into an agreement to sell a coal fired
electric generation facility (coal facility) that the public utility plans to
retire unless the Indiana utility regulatory commission (IURC)
approves the agreement; and (2) a person that purchases from a public
utility, under an agreement approved by the IURC, a coal facility that
the public utility plans to retire is not a public utility for purposes of
IURC jurisdiction solely by reason of the person's operation of the coal
facility. Provides that the rates and charges of a public utility, other
than a cooperatively owned public utility, may not include any recovery
of, or earnings on, the capital costs associated with the construction of
an electric generation facility that is built, in whole or in part, to
replace the electricity generated from a coal facility retired by the
(Continued next page)
Effective: July 1, 2025.
Buchanan, Goode, Leising
January 16, 2025, read first time and referred to Committee on Utilities.
2025 IN 517—LS 7166/DI 119 Digest Continued
public utility after December 31, 2028, unless the IURC determines
that the public utility: (1) made a good faith effort to sell the coal
facility to another person; and (2) either: (A) accepted a reasonable
offer to purchase the coal facility; or (B) was not able to sell the coal
facility for a reason beyond the public utility's reasonable control. Sets
forth factors the IURC must consider in determining whether: (1) the
public utility made a good faith effort to sell the coal facility; and (2)
an offer to purchase a coal facility was reasonable. Provides that the
IURC may preapprove a procedure for a public utility's solicitation and
review of offers for purchase of a coal facility the public utility plans
to retire that, if used by a public utility to sell the coal facility, satisfies
the requirements for: (1) a good faith effort to sell the coal facility; and
(2) acceptance of a reasonable offer for the coal facility. Provides that,
subject to certain conditions, the IURC shall require a public utility,
other than a cooperatively owned public utility, to purchase electricity
generated by a coal facility that: (1) was acquired from a public utility
through an agreement approved by the IURC; and (2) but for the sale
of the coal facility, would have been retired by the public utility.
Provides that prior to the proposed retirement date for a coal facility,
the IURC may determine the avoided cost and other terms and
conditions for the purchase of electricity from the coal facility in order
to allow potential purchasers of the coal facility to know this
information before entering into an agreement to purchase the coal
facility.
2025 IN 517—LS 7166/DI 1192025 IN 517—LS 7166/DI 119 Introduced
First Regular Session of the 124th General Assembly (2025)
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 2024 Regular Session of the General Assembly.
SENATE BILL No. 517
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 6-8-13-7, AS ADDED BY P.L.293-2013(ts),
2 SECTION 26, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]: Sec. 7. As used in this chapter, "infrastructure" means
4 the following:
5 (1) Real or personal property or equipment owned or used by:
6 (A) a public utility (as defined in IC 8-1-2-1(a) or
7 IC 8-1-8.5-1(a)); IC 8-1-8.5-1(b));
8 (B) a municipally owned utility (as defined in IC 8-1-2-1(h));
9 (C) a joint agency (as defined in IC 8-1-2.2-2(e)); or
10 (D) a communications service provider (as defined in
11 IC 8-1-32.6-3).
12 (2) Public roads and bridges and related support facilities.
13 SECTION 2. IC 8-1-8.5-1, AS AMENDED BY P.L.60-2021,
14 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
15 JULY 1, 2025]: Sec. 1. (a) As used in this chapter, "coal facility"
2025 IN 517—LS 7166/DI 119 2
1 refers to a coal fired electric generation facility that is located in
2 Indiana.
3 (a) (b) Except as provided in subsection (c), subsections (d) and
4 (e), as used in this chapter, "public utility" means a:
5 (1) public, municipally owned, or cooperatively owned utility; or
6 (2) joint agency created under IC 8-1-2.2.
7 (b) (c) As used in this chapter, "public utility service" means the
8 service rendered by a public utility.
9 (c) (d) As used in section 13 of this chapter, "public utility" means
10 only those utilities listed in 170 IAC 4-7-2(a) and their successors in
11 interest.
12 (e) As used in sections 14 through 17 of this chapter, "public
13 utility" means a public utility (as defined in IC 8-1-2-1) that
14 provides electric utility service to Indiana customers.
15 SECTION 3. IC 8-1-8.5-14 IS ADDED TO THE INDIANA CODE
16 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
17 1, 2025]: Sec. 14. (a) A public utility may not enter into an
18 agreement to sell a coal facility that the public utility plans to retire
19 unless the commission approves the agreement.
20 (b) In determining whether to approve an agreement under
21 subsection (a), the commission shall consider the following:
22 (1) Whether the proposed purchaser has, or has contracted
23 with another person that has, financial, technical, and
24 managerial abilities sufficient to reasonably:
25 (A) operate;
26 (B) maintain; and
27 (C) decommission;
28 the coal facility, including the ability to reasonably satisfy any
29 environmental obligations associated with the operation,
30 maintenance, and decommissioning of the coal facility.
31 (2) If the coal facility is comprised of one (1) or more
32 generation units at a larger power plant at which the public
33 utility will continue to own and operate one (1) or more
34 generation units, whether the proposed purchaser and the
35 public utility have made reasonable contractual arrangements
36 for the sharing of the costs associated with any joint or
37 common facilities at the power plant.
38 (3) Whether the proposed purchaser has agreed to reasonable
39 terms and conditions for environmental remediation
40 associated with the coal facility.
41 (4) Whether the agreement contains provisions allowing the
42 public utility, with commission approval, to revoke the sale in
2025 IN 517—LS 7166/DI 119 3
1 the event the purchaser is unable to:
2 (A) timely obtain all necessary local, state, and federal
3 permits; or
4 (B) timely enter into any necessary operational and labor
5 agreements.
6 (5) Whether the agreement contains a provision requiring the
7 proposed purchaser to transfer the coal facility, in whole or
8 in part, to another person only under the terms of an
9 agreement that:
10 (A) the proposed purchaser has submitted to the
11 commission for approval; and
12 (B) the commission has approved under this section.
13 (6) Any other factor considered appropriate by the
14 commission.
15 SECTION 4. IC 8-1-8.5-15 IS ADDED TO THE INDIANA CODE
16 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
17 1, 2025]: Sec. 15. A person that purchases a coal facility from a
18 public utility under an agreement approved by the commission
19 under section 14 of this chapter is not a public utility for purposes
20 of IC 8-1-2 solely by reason of the person's operation of the coal
21 facility.
22 SECTION 5. IC 8-1-8.5-16 IS ADDED TO THE INDIANA CODE
23 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
24 1, 2025]: Sec. 16. (a) Notwithstanding section 6.5 of this chapter or
25 any other law, the rates and charges of a public utility, other than
26 a cooperatively owned public utility, may not include any recovery
27 of, or earnings on, the capital costs associated with the construction
28 of an electric generation facility that is built, in whole or in part, to
29 replace the electricity generated from one (1) or more coal facilities
30 retired by the public utility after December 31, 2028, unless the
31 commission determines, subject to subsection (d), that with regard
32 to each of the coal facilities:
33 (1) the public utility made a good faith effort to sell the coal
34 facility to another person before retiring the coal facility; and
35 (2) the public utility either:
36 (A) accepted a reasonable offer to purchase the coal
37 facility; or
38 (B) was not able to sell the coal facility for a reason beyond
39 the public utility's reasonable control.
40 (b) In determining for purposes of subsection (a)(1) whether a
41 public utility made a good faith effort to sell a coal facility, the
42 commission shall consider the following:
2025 IN 517—LS 7166/DI 119 4
1 (1) Whether the public utility:
2 (A) provided sufficient time before the retirement of the
3 coal facility for potential purchasers to evaluate
4 purchasing the coal facility;
5 (B) used reasonable efforts to make potential purchasers
6 aware of the opportunity to purchase the coal facility; and
7 (C) reasonably evaluated any offers received by the public
8 utility for the purchase of the coal facility.
9 (2) Any other factor the commission determines to be relevant
10 in evaluating whether the public utility made a good faith
11 effort to sell the coal facility.
12 (c) In determining for purposes of subsection (a)(2) whether an
13 offer accepted by a public utility is reasonable, the commission
14 shall consider the following:
15 (1) Whether the public utility's acceptance of the offer
16 resulted in:
17 (A) reduced costs to the public utility's customers; and
18 (B) reduced financial risks to the public utility's customers,
19 including any reduction in environmental remediation
20 risks associated with decommissioning the coal facility;
21 as compared to the decommissioning of the coal facility.
22 (2) Whether the public utility's acceptance of the offer was in
23 the public interest.
24 (d) A public utility may apply to the commission for
25 preapproval of a procedure for solicitation and review of offers for
26 the purchase of a coal facility that the public utility plans to retire.
27 If the commission approves the procedure, the public utility's sale
28 of the coal facility using the procedure satisfies the conditions
29 under subsection (a)(1) and (a)(2).
30 SECTION 6. IC 8-1-8.5-17 IS ADDED TO THE INDIANA CODE
31 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
32 1, 2025]: Sec. 17. (a) As used in this section, "avoided cost" means
33 the incremental costs to a public utility, as determined by the
34 commission, of electric energy or capacity, or both, that, but for
35 the public utility's purchase of electricity from a transferred coal
36 facility, the public utility would have incurred in generating the
37 electricity or in purchasing the electricity from another source.
38 (b) As used in this section, "transferred coal facility" means a
39 coal facility that is acquired by a person under a purchase
40 agreement approved by the commission under section 14 of this
41 chapter.
42 (c) The commission shall require a public utility, other than a
2025 IN 517—LS 7166/DI 119 5
1 cooperatively owned public utility, to purchase electricity
2 generated by a transferred coal facility if:
3 (1) the person that has acquired the coal facility offers to sell
4 some or all of the electricity generated by the coal facility to
5 the public utility;
6 (2) the electricity is sold to the public utility at a price that is
7 no greater than the public utility's avoided cost, as
8 determined by the commission;
9 (3) the electricity is sold to the public utility under a power
10 purchase agreement for a specified term, and with any other
11 terms and conditions approved by the commission;
12 (4) the commission approves one hundred percent (100%) of
13 the cost of the power purchase agreement for recovery in the
14 public utility's rates; and
15 (5) one hundred percent (100%) of the electricity purchased
16 by the public utility under the power purchase agreement is
17 allocated to the public utility's Indiana customers, unless
18 otherwise agreed to by the public utility.
19 (d) In determining a public utility's avoided cost for purposes of
20 subsection (c), the commission may consider:
21 (1) the value of the electricity generated from the transferred
22 coal facility;
23 (2) the value of any reliability benefits associated with the
24 operation of the transferred coal facility; and
25 (3) any other factor considered appropriate by the
26 commission.
27 As approved by the commission, a power purchase agreement
28 under subsection (c) may provide for an avoided cost amount that
29 changes over the course of the power purchase agreement at
30 specified intervals.
31 (e) Prior to the proposed retirement date of a coal facility, the
32 commission may determine the price and other terms and
33 conditions for the purchase of electricity from the coal facility in
34 order to allow potential purchasers of the coal facility to know this
35 information before entering into an agreement to purchase the coal
36 facility.
2025 IN 517—LS 7166/DI 119