Introduced Version
SENATE BILL No. 69
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 8-1.
Synopsis: Low carbon and noncarbon dioxide emitting plants.
Provides that: (1) low carbon dioxide emitting or noncarbon dioxide
emitting energy production or generating facilities; and (2) purchases
of energy produced by such facilities; qualify for the financial
incentives available for clean energy projects. Provides that a combined
heat and power facility qualifies as a renewable energy resource for
purposes of the statute that provides financial incentives for clean
energy projects. Provides that an eligible business may recover
qualified utility system expenses, which include specified
preconstruction costs, associated with a: (1) new energy production or
generating facility; or (2) low carbon dioxide emitting or noncarbon
dioxide emitting energy production or generating facility. Changes the
term "clean coal and energy projects" to "clean energy projects" to
allow the term to include low carbon dioxide emitting or noncarbon
dioxide emitting energy production or generating facilities. Makes
other technical changes.
Effective: July 1, 2010.
Boots
January 5, 2010, read first time and referred to Committee on Utilities & Technology.
Introduced
Second Regular Session 116th General Assembly (2010)
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 2009 Regular and Special Sessions of the General Assembly.
SENATE BILL No. 69
A BILL FOR AN ACT to amend the Indiana Code concerning
utilities.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 8-1-8.8-1; (10)IN0069.1.1. -->
SECTION 1. IC 8-1-8.8-1, AS AMENDED BY P.L.175-2007,
SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 1. (a) The general assembly makes the following
findings:
(1) Growth of Indiana's population and economic base has created
a need for new energy production or generating facilities in
Indiana.
(2) The development of a robust and diverse portfolio of energy
production or generating capacity, including coal gasification and
the use of renewable energy resources, is needed if Indiana is to
continue to be successful in attracting new businesses and jobs.
(3) Indiana has considerable natural resources that are currently
underutilized and could support development of new energy
production or generating facilities, including coal gasification
facilities, at an affordable price.
(4) Certain regions of the state, such as southern Indiana, could
benefit greatly from new employment opportunities created by
development of new energy production or generating facilities
utilizing the plentiful supply of coal from the geological formation
known as the Illinois Basin.
(5) Technology can be deployed that allows high sulfur coal from
the geological formation known as the Illinois Basin to be burned
or gasified efficiently while meeting strict state and federal air
quality limitations. Specifically, the state should encourage the
use of advanced clean coal technology, such as coal gasification.
(6) It is in the public interest for the state to encourage the
construction of new energy production or generating facilities that
increase the in-state capacity to provide for current and
anticipated energy demand at a competitive price.
(7) It is in the public interest for the state to encourage the
study, analysis, and construction of low carbon dioxide
emitting or noncarbon dioxide emitting energy production or
generating facilities, as well as carbon dioxide capture,
transportation, and storage facilities.
(b) The purpose of this chapter is to enhance Indiana's energy
security and reliability by ensuring all of the following:
(1) Indiana's and the region's energy production or generating
capacity continues to be adequate to provide for Indiana's current
and future energy needs, including the support of the state's
economic development efforts.
(2) The vast and underutilized coal resources of the Illinois Basin
are used as a fuel source for new energy production or generating
facilities.
(3) The electric transmission and gas transportation systems
within Indiana are upgraded to distribute additional amounts of
electricity and gas more efficiently.
(4) Jobs are created as new energy production or generating
facilities are built in regions throughout Indiana.
(5) The study, analysis, and construction of low carbon
dioxide emitting or noncarbon dioxide emitting energy
production or generating facilities are encouraged at the same
time as are new coal fired and other fossil fuel based energy
production or generating facilities.
SOURCE: IC 8-1-8.8-2; (10)IN0069.1.2. -->
SECTION 2. IC 8-1-8.8-2, AS AMENDED BY P.L.175-2007,
SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 2. As used in this chapter, "clean
coal and energy
projects" means any of the following:
(1) Any of the following projects:
(A) Projects at new energy production or generating facilities
that employ the use of clean coal technology and that produce
energy, including substitute natural gas, primarily from coal,
or gases derived from coal, from the geological formation
known as the Illinois Basin.
(B) Projects to provide advanced technologies that reduce
regulated air emissions from existing energy production or
generating plants that are fueled primarily by coal or gases
from coal from the geological formation known as the Illinois
Basin, such as flue gas desulfurization and selective catalytic
reduction equipment.
(C) Projects to provide electric transmission facilities to serve
a new energy production or generating facility or a low
carbon dioxide emitting or noncarbon dioxide emitting
energy production or generating facility.
(D) Projects that produce substitute natural gas from Indiana
coal by construction and operation of a coal gasification
facility.
(E) Projects or potential projects that employ the use of
low carbon dioxide emitting or noncarbon dioxide emitting
energy production or generating technologies to produce
electricity.
(2) Projects to develop alternative energy sources, including
renewable energy projects and or coal gasification facilities.
(3) The purchase of fuels or energy produced by a coal
gasification facility or by a low carbon dioxide emitting or
noncarbon dioxide emitting energy production or generating
facility.
(4) Projects described in subdivisions (1) through (3) (2) that use
coal bed methane.
SOURCE: IC 8-1-8.8-4; (10)IN0069.1.3. -->
SECTION 3. IC 8-1-8.8-4, AS AMENDED BY P.L.175-2007,
SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 4. As used in this chapter, "coal gasification
facility" means a facility in Indiana that uses a manufacturing process
that converts coal into a clean gas that can be used:
(1) as a fuel to generate energy; or
(2) as substitute natural gas.
SOURCE: IC 8-1-8.8-6; (10)IN0069.1.4. -->
SECTION 4. IC 8-1-8.8-6, AS AMENDED BY P.L.175-2007,
SECTION 15, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 6. As used in this chapter, "eligible business"
means an energy utility (as defined in IC 8-1-2.5-2) or owner of a coal
gasification facility that:
(1) proposes to construct or repower a new energy production or
generating facility;
(2) proposes to construct or repower a project described in section
2(1) or 2(2) of this chapter;
(3) undertakes a project to develop alternative energy sources,
including renewable energy projects or coal gasification
facilities; or
(4) purchases fuels or energy produced by a coal gasification
facility or by a low carbon dioxide emitting or noncarbon
dioxide emitting energy production or generating facility.
SOURCE: IC 8-1-8.8-7.5; (10)IN0069.1.5. -->
SECTION 5. IC 8-1-8.8-7.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2010]: Sec. 7.5. (a) As used in this chapter, "low carbon dioxide
emitting or noncarbon dioxide emitting energy production or
generating facility" means an energy production or generation
facility that is intended to produce:
(1) no carbon dioxide as a byproduct of the production or
generation of energy; or
(2) less carbon dioxide per megawatt hour of electricity
generated than is produced per megawatt hour of electricity
generated by a coal fired or other fossil fuel based energy
production or generating facility.
(b) The term includes the transmission lines and other
associated equipment employed specifically to serve a low carbon
dioxide emitting or noncarbon dioxide emitting energy production
or generating facility.
SOURCE: IC 8-1-8.8-8; (10)IN0069.1.6. -->
SECTION 6. IC 8-1-8.8-8, AS AMENDED BY P.L.175-2007,
SECTION 16, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 8. (a) As used in this chapter, "new energy
production or generating facility" refers to a generation or coal
gasification facility that satisfies all of the following:
(1) The facility produces energy primarily from coal or gases from
coal from the geological formation known as the Illinois Basin.
(2) The facility is a:
(A) newly constructed or newly repowered energy
generation
plant; or
(B) newly constructed
generation capacity expansion at an
existing
facility; plant;
dedicated primarily to serving Indiana retail customers.
(3) The repowering, construction, or expansion of the facility was
begun by an Indiana utility after July 1, 2002.
(4) Except for a facility that is a clean
coal and energy project
under section 2(2) of this chapter, the facility has an aggregate
rated electric generating capacity of at least one hundred (100)
megawatts for all units at one (1) site or a generating capacity of
at least four hundred thousand (400,000) pounds per hour of
steam.
(b) The term includes the transmission lines, gas transportation
facilities, and associated equipment employed specifically to serve a
new energy generating or coal gasification facility.
SOURCE: IC 8-1-8.8-8.5; (10)IN0069.1.7. -->
SECTION 7. IC 8-1-8.8-8.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2010]: Sec. 8.5. As used in this chapter, "qualified utility system
expenses" means any preconstruction costs associated with the
study, analysis, or development of a:
(1) new energy production or generating facility; or
(2) new low carbon dioxide emitting or noncarbon dioxide
emitting energy production or generating facility;
including siting, design, licensing, and permitting costs, regardless
of whether the facility for which such costs are incurred is
ultimately constructed or placed in service.
SOURCE: IC 8-1-8.8-9; (10)IN0069.1.8. -->
SECTION 8. IC 8-1-8.8-9, AS AMENDED BY P.L.175-2007,
SECTION 17, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 9. As used in this chapter, "qualified utility system
property" means any:
(1) new energy production or generating or coal gasification
facility; or
(2) new low carbon dioxide emitting or noncarbon dioxide
emitting energy production or generating facility;
used, or to be used, in whole or in part, by an energy utility to provide
retail energy service (as defined in IC 8-1-2.5-3) regardless of whether
that service is provided under IC 8-1-2.5 or another provision of this
article.
SOURCE: IC 8-1-8.8-10; (10)IN0069.1.9. -->
SECTION 9. IC 8-1-8.8-10, AS AMENDED BY P.L.151-2009,
SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 10. (a) As used in this chapter, "renewable energy
resources" means alternative sources of renewable energy, including
the following:
(1) Energy from wind.
(2) Solar energy.
(3) Photovoltaic cells and panels.
(4) Dedicated crops grown for energy production.
(5) Organic waste biomass, including any of the following organic
matter that is available on a renewable basis:
(A) Agricultural crops.
(B) Agricultural wastes and residues.
(C) Wood and wood wastes, including the following:
(i) Wood residues.
(ii) Forest thinnings.
(iii) Mill residue wood.
(iv) Waste from clean construction and demolition.
(D) Animal wastes.
(E) Aquatic plants.
(6) Hydropower from existing dams.
(7) Fuel cells.
(8) Energy from waste to energy facilities.
(9) Energy storage systems.
(10) Combined heat and power facilities.
(b) Except for energy described in subsection (a)(8), the term does
not include energy from the incinerations, burning, or heating of any of
the following:
(1) Tires.
(2) General household, institutional, commercial, industrial
lunchroom, office, or landscape waste.
(c) The term excludes treated or painted lumber.
SOURCE: IC 8-1-8.8-11; (10)IN0069.1.10. -->
SECTION 10. IC 8-1-8.8-11 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 11. (a) The commission
shall encourage clean
coal and energy projects by creating the
following financial incentives for clean
coal and energy projects, if the
projects are found to be reasonable and necessary:
(1) The timely recovery of costs incurred during construction and
operation of projects described in section 2(1) or 2(2) of this
chapter.
(2) The authorization of up to three (3) percentage points on the
return on shareholder equity that would otherwise be allowed to
be earned on projects described in subdivision (1).
(3) Financial incentives for the purchase of fuels
or energy
produced by a coal gasification facility
or by a low carbon
dioxide emitting or noncarbon dioxide emitting energy
production or generating facility, including cost recovery and
the incentive available under subdivision (2).
(4) Financial incentives for projects to develop alternative energy
sources, including renewable energy projects
or coal gasification
facilities.
(5) Other financial incentives the commission considers
appropriate.
(b) An eligible business must file an application to the commission
for approval of a clean coal and energy project under this section. This
chapter does not relieve an eligible business of the duty to obtain any
certificate required under IC 8-1-8.5 or IC 8-1-8.7. An eligible business
seeking a certificate under IC 8-1-8.5 or IC 8-1-8.7 and this chapter for
one (1) project may file a single application for all necessary
certificates. If a single application is filed, the commission shall
consider all necessary certificates at the same time.
(c) The commission shall promptly review an application filed
under this section for completeness. The commission may request
additional information the commission considers necessary to aid in its
review.
(d) The commission shall, after notice and hearing, issue a
determination of a project's eligibility for the financial incentives
described in subsection (a) not later than one hundred twenty (120)
days after the date of the application, unless the commission finds that
the applicant has not cooperated fully in the proceeding.
SOURCE: IC 8-1-8.8-12; (10)IN0069.1.11. -->
SECTION 11. IC 8-1-8.8-12, AS AMENDED BY P.L.175-2007,
SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 12. (a) The commission shall provide financial
incentives to eligible businesses for:
(1) new energy producing and production or generating
facilities; and
(2) new low carbon dioxide emitting or noncarbon dioxide
emitting energy production or generating facilities;
in the form of timely recovery of the costs incurred in connection with
the study, analysis, development, siting, design, licensing,
permitting, construction, repowering, expansion, operation, or
maintenance of the facilities.
(b) An eligible business seeking authority to timely recover the costs
described in subsection (a) must apply to the commission for approval
of a rate adjustment mechanism in the manner determined by the
commission.
(c) An application must include the following:
(1) A schedule for the completion of construction, repowering, or
expansion of the new energy generating or coal gasification
facility for which rate relief is sought.
(2) Copies of the most recent integrated resource plan filed with
the commission, if applicable.
(3) The amount of capital investment by the eligible business in
the new energy generating or coal gasification facility.
(4) Other information the commission considers necessary.
(d) The commission shall allow an eligible business to recover:
(1) the costs associated with qualified utility system property; and
(2) qualified utility system expenses;
if the eligible business provides substantial documentation that the
expected costs associated with qualified utility system property and
expenses and the schedule for incurring those costs and expenses are
reasonable and necessary.
(e) The commission shall allow an eligible business to recover the
costs associated with the purchase of fuels or energy produced by a
coal gasification facility or by a low carbon dioxide emitting or
noncarbon dioxide emitting energy production or generating
facility if the eligible business provides substantial documentation that
the costs associated with the purchase are reasonable and necessary.
(f) A retail rate adjustment mechanism proposed by an eligible
business under this section may be based on actual or forecasted data.
If forecast data is used, the retail rate adjustment mechanism must
contain a reconciliation mechanism to correct for any variance between
the forecasted costs and the actual costs.
SOURCE: IC 8-1-8.8-13; (10)IN0069.1.12. -->
SECTION 12. IC 8-1-8.8-13, AS AMENDED BY P.L.175-2007,
SECTION 20, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 13. An eligible business shall file a monthly report
with the lieutenant governor stating the following information:
(1) The amount of Illinois Basin coal, if any, purchased during the
previous month for use in a new energy production or generating
or coal gasification facility.
(2) The amount of any fuel or energy produced by coal
gasification facility and purchased by the eligible business during
the previous month.
(3) Any other information the lieutenant governor may reasonably
require.
SOURCE: IC 8-1-8.8-14; (10)IN0069.1.13. -->
SECTION 13. IC 8-1-8.8-14, AS AMENDED BY P.L.71-2009,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 14.
(a) The group shall conduct an annual study
on the use, availability, and economics of using:
(1) renewable energy resources;
and
(2) low carbon dioxide emitting or noncarbon dioxide emitting
energy production or generating technologies to produce
electricity;
in Indiana. Each year, the group shall submit a report on the study to
the commission for inclusion in the commission's annual report to the
regulatory flexibility committee described in IC 8-1-2.5-9 and
IC 8-1-2.6-4.
(b) The report
required by this section must include suggestions
from the group to encourage the development and use of:
(1) renewable energy resources and technologies, appropriate for
use in Indiana. In formulating the suggestions, the group shall
evaluate including potential renewable energy generation
opportunities from biomass and algae production systems; and
(2) low carbon dioxide emitting or noncarbon dioxide emitting
energy production or generating technologies;
appropriate for use in Indiana.
SOURCE: IC 8-1-13.1-2; (10)IN0069.1.14. -->
SECTION 14. IC 8-1-13.1-2, AS ADDED BY P.L.151-2009,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 2. As used in this chapter, "alternative energy
project" means a project that:
(1) develops or makes use of:
(A) clean
coal and energy projects (as defined in IC 8-1-8.8-2);
(B) renewable energy resources (as defined in IC 8-1-8.8-10)
for the production of electricity;
(C) integrated gasification combined cycle (IGCC) technology
to produce synthesis gas that is used:
(i) to generate electricity; or
(ii) as a substitute for natural gas;
regardless of the fuel source used to produce the synthesis gas;
(D) methane recovered from landfills for the production of
electricity;
(E) demand side management, energy efficiency, or
conservation programs; or
(F) coal bed methane;
(2) results in quantifiable reductions in, or the avoidance of:
(A) the use of electricity produced by traditional electric
generating facilities that use fossil fuels as their fuel source; or
(B) regulated air pollutants and carbon emissions produced by
traditional electric generating facilities that use fossil fuels as
their fuel source; and
(3) is implemented under a plan approved by:
(A) the office; and
(B) a corporation's or a cooperatively owned power supplier's
board of directors.