Bill Text: IN SB0251 | 2011 | Regular Session | Enrolled
Bill Title: Clean energy.
Spectrum: Partisan Bill (Republican 5-0)
Status: (Passed) 2011-05-18 - SECTIONS 16 through 18 effective 05/10/2011 [SB0251 Detail]
Download: Indiana-2011-SB0251-Enrolled.html
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AN ACT to amend the Indiana Code concerning utilities.
Chapter 8.4. Federally Mandated Requirements for Energy Utilities
Sec. 1. As used in this chapter, "certificate" refers to a certificate of public convenience and necessity issued by the commission under section 7(b) of this chapter.
Sec. 2. (a) As used in this chapter, "compliance project" means a project that is:
(1) undertaken by an energy utility; and
(2) related to the direct or indirect compliance by the energy utility with one (1) or more federally mandated requirements.
(b) The term includes:
(1) an addition; or
(2) an integrity, enhancement, or a replacement project;
undertaken by an energy utility to comply with a federally mandated requirement described in section 5(5) of this chapter.
Sec. 3. As used in this chapter, "energy utility" has the meaning set forth in IC 8-1-2.5-2.
Sec. 4. (a) As used in this chapter, "federally mandated costs"
means costs that an energy utility incurs in connection with a
compliance project, including capital, operating, maintenance,
depreciation, tax, or financing costs.
(b) The term does not include fines or penalties assessed against
or imposed on an energy utility for violating laws, regulations, or
consent decrees related to a federally mandated requirement.
Sec. 5. As used in this chapter, "federally mandated
requirement" means a requirement that the commission
determines is imposed on an energy utility by the federal
government in connection with any of the following:
(1) The federal Clean Air Act (42 U.S.C. 7401 et seq.).
(2) The federal Water Pollution Control Act (33 U.S.C. 1251
et seq.).
(3) The federal Resource Conservation and Recovery Act (42
U.S.C. 6901 et seq.).
(4) The federal Toxic Substances Control Act (15 U.S.C. 2601
et seq.).
(5) Standards or regulations concerning the integrity, safety,
or reliable operation of:
(A) transmission; or
(B) distribution;
pipeline facilities.
(6) Requirements relating to a license issued by the United
States Nuclear Regulatory Commission to operate a nuclear
energy production or generating facility (as defined in
IC 8-1-8.8-8.5).
(7) Any other law, order, or regulation administered or issued
by the United States Environmental Protection Agency, the
United States Department of Transportation, the Federal
Energy Regulatory Commission, or the United States
Department of Energy.
Sec. 6. (a) Except as provided in subsection (c), or unless an
energy utility has elected to file for:
(1) a certificate of public convenience and necessity; or
(2) the recovery of costs;
under another statute, an energy utility that seeks to recover
federally mandated costs under section 7(c) of this chapter must
obtain from the commission a certificate that states that public
convenience and necessity will be served by a compliance project
proposed by the energy utility.
(b) The commission shall issue a certificate of public
convenience and necessity under section 7(b) of this chapter if the
commission finds that the proposed compliance project will allow
the energy utility to comply directly or indirectly with one (1) or
more federally mandated requirements. In determining whether to
grant a certificate under this section, the commission shall examine
the following factors:
(1) The following, which must be set forth in the energy
utility's application for the certificate sought, in accordance
with section 7(a) of this chapter:
(A) A description of the federally mandated requirements,
including any consent decrees related to the federally
mandated requirements, that the energy utility seeks to
comply with through the proposed compliance project.
(B) A description of the projected federally mandated costs
associated with the proposed compliance project, including
costs that are allocated to the energy utility:
(i) in connection with regional transmission expansion
planning and construction; or
(ii) under a Federal Energy Regulatory Commission
approved tariff, rate schedule, or agreement.
(C) A description of how the proposed compliance project
allows the energy utility to comply with the federally
mandated requirements described by the energy utility
under clause (A).
(D) Alternative plans that demonstrate that the proposed
compliance project is reasonable and necessary.
(E) Information as to whether the proposed compliance
project will extend the useful life of an existing energy
utility facility and, if so, the value of that extension.
(2) Any other factors the commission considers relevant.
(c) An energy utility is not required to obtain a certificate under
this section for a project that constitutes a research and
development project.
Sec. 7. (a) As a condition for receiving the certificate required
under section 6 of this chapter, an energy utility must file with the
commission an application that sets forth the information
described in section 6(b) of this chapter, supported with technical
information in as much detail as the commission requires.
(b) The commission shall hold a properly noticed public hearing
on each application and grant a certificate only if the commission
has:
(1) made a finding that the public convenience and necessity
will be served by the proposed compliance project;
(2) approved the projected federally mandated costs associated with the proposed compliance project; and
(3) made a finding on each of the factors set forth in section 6(b) of this chapter.
(c) If the commission approves under subsection (b) a proposed compliance project and the projected federally mandated costs associated with the proposed compliance project, the following apply:
(1) Eighty percent (80%) of the approved federally mandated costs shall be recovered by the energy utility through a periodic retail rate adjustment mechanism that allows the timely recovery of the approved federally mandated costs. The commission shall adjust the energy utility's authorized net operating income to reflect any approved earnings for purposes of IC 8-1-2-42(d)(3) and IC 8-1-2-42(g)(3).
(2) Twenty percent (20%) of the approved federally mandated costs, including depreciation, allowance for funds used during construction, and post in service carrying costs, based on the overall cost of capital most recently approved by the commission, shall be deferred and recovered by the energy utility as part of the next general rate case filed by the energy utility with the commission.
(3) Actual costs that exceed the projected federally mandated costs of the approved compliance project by more than twenty-five percent (25%) shall require specific justification by the energy utility and specific approval by the commission before being authorized in the next general rate case filed by the energy utility with the commission.
(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, development, and life cycle management of
nuclear 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, development, and life cycle
management of nuclear 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.
(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 or increase the efficiency of 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 nuclear 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 enhance the safe and reliable use of nuclear energy production or generating technologies to produce electricity.
(2) Projects to develop alternative energy sources, including renewable energy projects
(3) The purchase of fuels or energy produced by a coal gasification facility or by a nuclear energy production or generating facility.
(4) Projects described in subdivisions (1) through
(1) as a fuel to generate energy; or
(2) as substitute natural gas.
(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 nuclear energy production or generating facility.
(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
(B) newly constructed
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
(b) The term includes the transmission lines, gas transportation facilities, and associated equipment employed specifically to serve a new energy production or generating
(1) uses a nuclear reactor as its heat source to provide steam to a turbine generator to produce or generate electricity;
(2) supplies electricity to Indiana retail customers on July 1, 2011;
(3) is dedicated primarily to serving Indiana customers; and
(4) is undergoing a comprehensive life cycle management project to enhance the safe and reliable operation of the facility during the period the facility is licensed to operate by the United States Nuclear Regulatory Commission.
(b) The term includes the transmission lines and other associated equipment employed specifically to serve a nuclear energy production or generating facility.
(1) new energy production or generating
(2) nuclear 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.
(b) Except for energy
(1) Tires.
(2) General household, institutional, commercial, industrial lunchroom, office, or landscape waste.
(c) The term excludes treated or painted lumber.
(1) The timely recovery of costs and expenses 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 nuclear 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
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.
(1) new energy
(2) nuclear 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, life cycle management, 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, life cycle management, or expansion of the
(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
(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
(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 nuclear 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.
(1) The amount of Illinois Basin coal, if any, purchased during the previous month for use in a new energy production or generating
(2) The amount of any fuel or energy produced by:
(A) a coal gasification facility;
(B) a nuclear energy production or generating facility;
that is purchased by the eligible business during the previous month.
(3) Any other information the lieutenant governor may reasonably require.
(1) develops or makes use of:
(A) clean
(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.
Chapter 37. Voluntary Clean Energy Portfolio Standard Program
Sec. 1. As used in this chapter, "base year" means the calendar year ending December 31, 2010.
Sec. 2. As used in this chapter, "clean energy" means electricity that is produced from a clean energy resource.
Sec. 3. As used in this chapter, "clean energy credit", or "CEC", means an interest that:
(1) represents one (1) megawatt hour of clean energy that satisfies the condition set forth in section 12(c)(2) of this chapter;
(2) is quantifiable and transferrable; and
(3) is possessed by not more than one (1) entity at a time.
Sec. 4. (a) As used in this chapter, "clean energy resource" means any of the following sources, clean sources, alternative technologies, or programs used in connection with the production or conservation of electricity:
(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.
(D) Animal wastes.
(E) Animal byproducts.
(F) Aquatic plants.
(G) Algae.
(6) Hydropower.
(7) Fuel cells.
(8) Hydrogen.
(9) Energy from waste to energy facilities, including energy derived from advanced solid waste conversion technologies.
(10) Energy storage systems or technologies.
(11) Geothermal energy.
(12) Coal bed methane.
(13) Industrial byproduct technologies that use fuel or energy that is a byproduct of an industrial process.
(14) Waste heat recovery from capturing and reusing the waste heat in industrial processes for heating or for generating mechanical or electrical work.
(15) A source, technology, or program approved by the commission and designated as a clean energy resource by a rule adopted by the commission under IC 4-22-2.
(16) Demand side management or energy efficiency initiatives that:
(A) reduce electricity consumption; or
(B) implement load management, demand response, or
energy efficiency measures designed to shift customers'
electric loads from periods of higher demand to periods of
lower demand;
as a result of equipment installed, or customers enrolled, after
January 1, 2010.
(17) A clean energy project described in IC 8-1-8.8-2(1).
(18) Nuclear energy.
(19) Electricity that is:
(A) generated by a customer owned distributed generation
facility that is interconnected to the electricity supplier's
distribution system in accordance with the commission's
interconnection standards set forth in 170 IAC 4-4.3; and
(B) supplied back to the electricity supplier for use in
meeting the electricity supplier's electricity demand
requirements in accordance with the commission's net
metering rules set forth in 170 IAC 4-4.2.
(20) Combined heat and power systems.
(21) Electricity that is generated from natural gas at a facility
constructed in Indiana after July 1, 2011, which displaces
electricity generation from an existing coal fired generation
facility.
(b) Except for energy described in subsection (a)(9), the term
does not include energy from the incineration, 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.
Sec. 5. As used in this chapter, "clean portfolio standard goal",
or "CPS goal", refers to a goal set forth in section 12(a) of this
chapter that a participating electricity supplier must achieve
during a specified period during the program to qualify for one (1)
or more of the financial incentives described in section 13 of this
chapter.
Sec. 6. (a) As used in this chapter, "electricity supplier" means
a public utility (as defined in IC 8-1-2-1) that furnishes retail
electric service to customers in Indiana on January 1, 2011.
(b) The term does not include a utility that is:
(1) a municipally owned utility (as defined in IC 8-1-2-1(h));
(2) a corporation organized under IC 8-1-13; or
(3) a corporation organized under IC 23-17 that is an electric
cooperative and that has at least one (1) member that is a
corporation organized under IC 8-1-13.
Sec. 7. As used in this chapter, "participating electricity
supplier" refers to an electricity supplier that has been approved
by the commission under section 11 of this chapter to participate
in the program.
Sec. 8. As used in this chapter, "program" refers to the Indiana
voluntary clean energy portfolio standard program established by
the commission under section 10 of this chapter.
Sec. 9. As used in this chapter, "regional transmission
organization", with respect to an electricity supplier, refers to the
regional transmission organization approved by the Federal
Energy Regulatory Commission for the control area that includes
the electricity supplier's assigned service area (as defined in
IC 8-1-2.3-2).
Sec. 10. (a) Subject to subsection (d), the commission shall adopt
rules under IC 4-22-2 to establish the Indiana voluntary clean
energy portfolio standard program. The program established
under this section must be a voluntary program that provides
incentives to participating electricity suppliers that undertake to
supply specified percentages of the total electricity supplied to their
Indiana retail electric customers from clean energy.
(b) The rules adopted by the commission under this section to
establish the program must:
(1) incorporate:
(A) the CPS goals set forth in section 12(a) of this chapter;
(B) methods for measuring and evaluating a participating
electricity supplier's compliance with the CPS goals set
forth in section 12(a) of this chapter;
(C) the financial incentives and periodic rate adjustment
mechanisms set forth in section 13 of this chapter; and
(D) the reporting requirements set forth in section 14 of
this chapter;
(2) require the commission to determine, before approving an
application under section 11 of this chapter, that the approval
of the application will not result in an increase to the retail
rates and charges of the electricity supplier above what could
reasonably be expected if the application were not approved;
(3) take effect not later than January 1, 2012; and
(4) be consistent with this chapter.
(c) Upon the effective date of the rules adopted by the
commission under this section, an electricity supplier may apply to
the commission under section 11 of this chapter for approval to
participate in the program.
(d) The commission may adopt emergency rules under
IC 4-22-2-37.1 to adopt the rules required by this section. An
emergency rule adopted by the commission under IC 4-22-2-37.1
expires on the date a rule that supersedes the emergency rule is
adopted by the commission under IC 4-22-2-24 through
IC 4-22-2-36.
Sec. 11. (a) An electricity supplier that seeks to participate in the
program established by the commission under section 10 of this
chapter must apply to the commission:
(1) in the manner and on a form prescribed by the
commission; and
(2) not later than a date specified by the commission in the
rules adopted under section 10 of this chapter;
for approval to participate in the program.
(b) Upon receiving an application under subsection (a), the
commission shall review the application for completeness. The
commission may request additional information the commission
considers necessary to aid in the commission's review.
(c) If the commission determines that:
(1) an application submitted under subsection (a) is complete
and reasonably complies with the purpose of this chapter;
(2) the electricity supplier submitting the application has
demonstrated that the electricity supplier has a reasonable
expectation of obtaining clean energy to meet the energy
requirements of its Indiana retail electric customers during
the calendar year ending December 31, 2025, in an amount
equal to at least ten percent (10%) of the total electricity
supplied by the participating electricity supplier to its Indiana
retail electric customers during the base year, as set forth in
section 12(a)(3) of this chapter; and
(3) approving the application will not result in an increase to
the retail rates and charges of the electricity supplier above
what could reasonably be expected if the application were not
approved;
the commission shall approve the application. If, however, the
commission determines that the application does not meet the
requirements set forth in this subsection, the commission shall
reject the application. The electricity supplier that submitted the
application under subsection (a) bears the burden of proving to the
commission that the application meets the requirements set forth
in this subsection.
Sec. 12. (a) Subject to subsection (c), to qualify for the financial incentives set forth in section 13 of this chapter, a participating electricity supplier must obtain clean energy to meet the energy requirements of the participating electricity supplier's Indiana retail electric customers according to the following CPS goals:
(1) CPS Goal Period I: For the six (6) calendar years beginning January 1, 2013, and ending December 31, 2018, an average of at least four percent (4%) of the total electricity obtained by the participating electricity supplier to meet the energy requirements of its Indiana retail electric customers during the base year.
(2) CPS Goal Period II: For the six (6) calendar years beginning January 1, 2019, and ending December 31, 2024, an average of at least seven percent (7%) of the total electricity obtained by the participating electricity supplier to meet the energy requirements of its Indiana retail electric customers during the base year.
(3) CPS Goal Period III: In the calendar year ending December 31, 2025, at least ten percent (10%) of the total electricity obtained by the participating electricity supplier to meet the energy requirements of its Indiana retail electric customers during the base year.
(b) For purposes of subsection (a), electricity is measured in megawatt hours. However, in determining whether a participating electricity supplier has met a CPS goal set forth in subsection (a), the commission shall require that at least fifty percent (50%) of the megawatt hours of clean energy obtained by the participating electricity supplier to meet the energy requirements of its Indiana retail electric customers during the CPS goal period under consideration must originate from clean energy resources located in Indiana.
(c) In determining whether a participating electricity supplier has met a particular CPS goal set forth in subsection (a), the commission shall consider only clean energy that:
(1) except as provided in subsection (f), is obtained by the participating electricity supplier to meet the energy requirements of the participating electricity supplier's Indiana retail electric customers during the CPS goal period under consideration; and
(2) is generated by a facility located in a control area that is part of a regional transmission organization of which an electricity supplier is a member.
(d) An electricity supplier is not required to obtain clean energy to meet a particular CPS goal if the commission determines that the cost of clean energy resources available to the electricity supplier would result in an increase in the rates and charges of the electricity supplier that would not be just and reasonable.
(e) A participating electricity supplier may own or purchase one (1) or more CECs to meet any of the CPS goals set forth in subsection (a) as long as the clean energy represented by the CEC meets the condition set forth in subsection (c)(2).
(f) A participating electricity supplier may apply:
(1) amounts of clean energy supplied by the participating electricity supplier to its Indiana retail electric customers during a particular CPS goal period; or
(2) CECs acquired by the participating electricity supplier during a particular CPS goal period;
that exceed the requirements for the particular CPS goal period to the immediately succeeding CPS goal period.
(g) A participating electricity supplier may use a clean energy resource described in section 4(a)(17) through 4(a)(21) of this chapter to satisfy not more than thirty percent (30%) of any of the CPS goals set forth in subsection (a).
Sec. 13. (a) The commission may establish a shareholder incentive consisting of the authorization of an increased overall rate of return on equity, not to exceed fifty (50) basis points over a participating electricity supplier's authorized rate of return, whenever the participating electricity supplier attains a CPS goal set forth in section 12(a) of this chapter. The number of additional basis points authorized by the commission under this subsection may:
(1) be different for each of the CPS goal periods identified in section 12(a) of this chapter, as the commission determines is appropriate; and
(2) in the case of a particular participating electricity supplier, be based on the extent to which the participating electricity supplier met a particular CPS goal using clean energy resources listed in section 4(a)(1) through 4(a)(16) of this chapter.
The additional basis points authorized by the commission under this subsection for each CPS goal period are not cumulative and may not be authorized for a clean energy resource for which the commission has authorized an incentive under IC 8-1-8.8-11(a)(2). In determining a participating electricity supplier's authorized rate
of return to which additional basis points may be added upon the
participating electricity supplier's achievement of a particular CPS
goal, the commission shall not include as part of the authorized
rate of return any additional basis points awarded to the
participating electricity supplier for having achieved the
immediately preceding CPS goal.
(b) If the commission approves an electricity supplier's
application under section 11(c) of this chapter, the commission
shall authorize the incentive described in subsection (a) and the
recovery of costs, by means of a periodic rate adjustment
mechanism, as described in subsection (c), based on the following
considerations:
(1) The sharing of achieved savings or as a percentage of
costs.
(2) Avoided costs resulting from achieving demand side
management or energy efficiency targets.
(3) The recovery of lost revenues associated with
implementation of demand side management or energy
efficiency initiatives.
(4) The designation of electricity produced or conserved by a
clean energy resource as an energy savings for purposes of
any initiative, rule, or order approved by the commission to
promote the efficient use and production of electricity,
including initiatives to implement demand side management,
energy efficiency, or conservation measures in accordance
with commission rules.
(c) If the commission approved an electricity supplier's
application under section 11(c) of this chapter, the commission
shall permit the recovery, by means of a periodic rate adjustment
mechanism, of all just, reasonable, and necessary program costs
incurred by a participating electricity supplier in:
(1) constructing, operating, or maintaining facilities that
generate clean energy that:
(A) is used by the participating electricity supplier in its
efforts to meet a CPS goal set forth in section 12(a) of this
chapter; and
(B) meets the requirements set forth in section 12(c) of this
chapter; or
(2) otherwise generating or purchasing clean energy that is
used by the participating electricity supplier in its efforts to
meet a CPS goal set forth in section 12(a) of this chapter.
For purposes of this subsection and subsection (h)(1), "program
costs" includes administrative costs, ancillary costs, capacity costs,
costs associated with CECs, capital costs, depreciation costs, tax
costs, and financing costs incurred in connection with an activity
described in subdivision (1) or (2).
(d) A participating electricity supplier that seeks an incentive
established by the commission under subsection (a) or a periodic
rate adjustment mechanism established by the commission under
subsection (c) must apply to the commission:
(1) in the manner and on a form prescribed by the
commission; and
(2) not later than any dates specified by the commission in
rules adopted under section 10 of this chapter;
for approval for the incentive or periodic rate adjustment
mechanism sought.
(e) The commission shall review an application filed under this
section for completeness. The commission may request additional
information the commission considers necessary to aid in the
commission's review.
(f) The commission shall, after notice and hearing, issue a
determination of a participating electricity supplier's eligibility for
the financial incentive or periodic rate adjustment mechanism
sought. The commission shall issue a determination under this
subsection 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.
(g) Subject to the participating electricity supplier's continuing
compliance with the applicable CPS goal, as determined according
to the measurement and evaluation procedures described in section
10(b)(1)(B) of this chapter, a shareholder incentive described in
subsection (a) continues in effect until the earlier of the following:
(1) A time or upon an event specified in the commission's
order approving the shareholder incentive.
(2) The commission issues a new order authorizing the
participating electricity supplier to receive a shareholder
incentive for meeting the next CPS program goal.
(h) Subject to the participating electricity supplier's continuing
compliance with the applicable CPS goal, as determined according
to the measurement and evaluation procedures described in section
10(b)(1)(B) of this chapter, a periodic rate adjustment mechanism
described in subsection (c) continues in effect until the earlier of
the following:
(1) The participating electricity supplier has recovered the
program costs for which the periodic rate adjustment
mechanism was allowed.
(2) A time or upon an event specified in the commission's
order approving the periodic rate adjustment mechanism.
Sec. 14. (a) Beginning in 2014, each participating electricity
supplier shall report to the commission not later than March 1 of
each year on the following:
(1) The participating electricity supplier's efforts, if any,
during the most recently ended calendar year to meet the CPS
goal applicable to the most recently ended calendar year.
(2) The total amount of renewable energy supplied to the
participating electricity supplier's Indiana retail electric
customers during the most recently ended calendar year,
including a breakdown of the following:
(A) The amount of clean energy generated by facilities
owned or operated by the participating electricity supplier.
The participating electricity supplier shall identify each
facility by:
(i) name and location;
(ii) total generating capacity;
(iii) total amount of electricity generated at the facility
during the most recently ended calendar year, including
the percentage of this amount that was supplied to the
participating electricity supplier's Indiana retail electric
customers; and
(iv) total amount of clean energy generated at the facility
during the most recently ended calendar year, including
the percentage of this amount that was supplied to the
participating electricity supplier's Indiana retail electric
customers.
(B) The amount of clean energy purchased from other
suppliers of clean energy. The participating electricity
supplier shall identify:
(i) each supplier from whom clean energy was
purchased;
(ii) the amount of clean energy purchased from each
supplier;
(iii) the price paid by the participating electricity
supplier for the clean energy purchased from each
supplier; and
(iv) to the extent known, the name and location of each
facility at which the clean energy purchased from each
supplier was generated.
(3) The number of CECs purchased by the participating
electricity supplier during the most recently ended calendar
year. The participating electricity supplier shall identify:
(A) each person from whom one (1) or more CECs was
purchased;
(B) the price paid to each person identified in clause (A) for
the CECs purchased;
(C) the number of CECs applied, if any, during the most
recently ended calendar year to meet the CPS goal
applicable to the most recently ended calendar year; and
(D) the number of CECs, if any, that the participating
electricity supplier plans to carry over to the next
succeeding CPS goal period, as permitted by section 12(f)
of this chapter.
(4) The participating electricity supplier's plans for meeting
the CPS goal applicable to the calendar year in which the
report is submitted.
(5) Advances in clean energy technology that affect activities
described in subdivisions (1) and (4).
(6) Any other information that the commission prescribes in
rules adopted under IC 4-22-2.
For purposes of this subsection, amounts of clean energy and
electricity shall be reported in megawatt hours. A participating
electricity supplier's duty to submit a report under this subsection
terminates after the participating electricity supplier has submitted
the report that applies to the calendar year ending December 31,
2025.
(b) Beginning in 2014, the commission's annual report to the
regulatory flexibility committee under IC 8-1-2.5-9(b) must include
a summary of the information provided by participating electricity
suppliers under subsection (a) with respect to the most recently
ended calendar year. The commission's duty to include the
information specified in this subsection in its annual report to the
regulatory flexibility committee terminates after the commission
has submitted the information that applies to the calendar year
ending December 31, 2025.
(1) To supplement the cost required to abandon a well that has had a permit revoked under IC 14-37-13-1.
(2) To cover the costs of remedial plugging and repairing of wells under IC 14-37-8, including the expenses of remedial action under IC 14-37-8-15.
(3) To cover the cost to:
(A) mitigate environmental damage; or
(B) protect public safety against harm;
caused by a well regulated under this article.
(4) Pipeline safety.
(b) The director may make expenditures from the fund for emergency purposes under section 6 of this chapter without the prior approval of the budget agency or the governor. An expenditure under this subsection may not exceed fifty thousand dollars ($50,000).
(c) The director may establish a program to reimburse an applicant for the reasonable expenses of remedial action incurred under IC 14-37-8-15. The director may make expenditures from the fund for this purpose and may establish any necessary guidelines and procedures to administer the program.
ARTICLE 39. CARBON DIOXIDE
Chapter 1. Eminent Domain for Transportation of Carbon Dioxide by Pipeline
Sec. 1. As used in this chapter, "carbon dioxide" means a fluid consisting of more than ninety percent (90%) carbon dioxide molecules compressed to a supercritical state.
Sec. 2. As used in this chapter, "carbon dioxide transmission pipeline" means the part of a pipeline in Indiana, including appurtenant facilities, property rights, and easements, that is used exclusively for the purpose of transporting carbon dioxide to a carbon management application, including sequestration, enhanced oil recovery, and deep saline injection, within or outside Indiana.
Sec. 3. Because the movement conducted for:
(1) a person's own use or account; or
(2) the use or account of another person or persons;
of carbon dioxide by pipeline in Indiana for carbon management applications can assist efforts to reduce carbon dioxide emissions from the manufacture of gas using coal and the generation of electricity, the use of carbon dioxide transmission pipelines, including their routing, construction, maintenance, and operation, is declared as a matter of legislative determination to be a public
use and service, in the public interest, and a benefit to the welfare
and people of Indiana.
Sec. 4. (a) A carbon dioxide transmission pipeline company may
apply to the department for issuance of a carbon dioxide
transmission pipeline certificate of authority. The department shall
prescribe the form of the application, which must:
(1) include a filing fee of one thousand dollars ($1,000);
(2) be signed by a responsible officer of the company;
(3) include a statement verifying that the information
submitted is true, accurate, and complete to the best of that
responsible officer's knowledge and belief; and
(4) include all information necessary for the department to
find the following:
(A) That the applicant has the financial, managerial, and
technical ability to construct, operate, and maintain a
carbon dioxide transmission pipeline in Indiana.
(B) That the applicant has the requisite experience
constructing, operating, and maintaining a carbon dioxide
transmission pipeline.
(C) That the applicant has entered into a contract to
transport carbon dioxide by pipeline in Indiana with:
(i) at least one (1) producer of carbon dioxide located in
Indiana; and
(ii) unless all of the carbon dioxide to be transported in
the proposed carbon dioxide transmission pipeline is for
the applicant's own use or account, at least one (1) end
user of carbon dioxide.
(D) That the applicant has provided documentation to the
department showing the proposed length, diameter, and
location of the proposed carbon dioxide transmission
pipeline in Indiana.
(E) That the applicant will construct, operate, and
maintain the proposed carbon dioxide transmission
pipeline in accordance with applicable local, state, and
federal law, including federal and state safety regulations
and rules governing the construction, operation, and
maintenance of carbon dioxide transmission pipelines, and
related facilities and equipment, to ensure the safety of
pipeline employees and the public.
(F) That the applicant has:
(i) entered into an agreement with the Indiana utility
regulatory commission concerning the mitigation of
agricultural impacts associated with the construction of
the proposed carbon dioxide transmission pipeline; or
(ii) signed a statement indicating that the applicant
agrees to use, in connection with the construction of the
proposed carbon dioxide transmission pipeline, the
guidelines adopted under IC 8-1-22.6-8 by the pipeline
safety division of the Indiana utility regulatory
commission.
(b) The department shall review an application filed under
subsection (a). Subject to subsection (f), if the department
determines that the application is incomplete or inaccurate, or
both, the department shall return the application to the applicant,
informing the applicant in writing of the applicant's right to file a
corrected application with the department. If the department
determines that the application is complete and accurate, the
department shall provide notice to the applicant of:
(1) that determination; and
(2) the date, time, and location of the public information
meeting to be held under subsection (d).
(c) The applicant shall:
(1) upon receipt of a notice under subsection (b):
(A) place for public inspection a copy of the application in
a public library located in each county in which the carbon
dioxide transmission pipeline is proposed to be located;
and
(B) publish notice, in the same manner that would be
required if the applicant were subject to IC 5-3-1, in each
county in which the carbon dioxide transmission pipeline
is proposed to be located, of:
(i) the name and address of each library in which a copy
of the application is placed under clause (A); and
(ii) the date, time, and location of the public information
meeting to be held under subsection (d);
(2) provide to the department proof of publication of notice
under subdivision (1)(B); and
(3) have a representative present at the public information
meeting held under subsection (d).
(d) The department shall:
(1) conduct a public information meeting in the county seat of
one (1) of the counties, as determined by the department, in
which the proposed carbon dioxide transmission pipeline will
be located; and
(2) provide an opportunity at the meeting for members of the
public to be briefed and to ask questions about the proposed
carbon dioxide transmission pipeline.
(e) Not later than ninety (90) days after the public information
meeting held under subsection (d), the department shall notify the
applicant in writing that:
(1) the department:
(A) has made the findings described in subsection (a)(4);
and
(B) has approved the application; or
(2) the department:
(A) has determined that the department is unable to make
the findings described in subsection (a)(4); and
(B) has disapproved the application.
(f) The department shall process a corrected application that is
filed as permitted under subsection (b) in the same manner the
department processes an initially filed application under subsection
(a).
(g) If the department fails to act under subsection (e) not later
than ninety (90) days after the public information meeting held
under subsection (d), the application is considered to be approved
by the department.
(h) If:
(1) the department approves the application under subsection
(e)(1); or
(2) the application is considered to be approved as described
in subsection (g);
the department shall issue to the applicant a carbon dioxide
transmission pipeline certificate of authority.
Sec. 5. (a) Except as provided in subsection (b), if a carbon
dioxide transmission pipeline company files with the department
a verified certificate stating the reasons that the designation of
confidential information is necessary, the carbon dioxide
transmission pipeline company may designate information that it
submits in an application to the department, or in subsequent
reports, as trade secret or confidential and proprietary
information.
(b) Subsection (a) does not apply to information referred to in
section 4(a)(4)(D) of this chapter.
(c) The department shall exercise all necessary caution to avoid
public disclosure of confidential information designated under
subsection (a).
Sec. 6. A certificate of authority issued by the department under
this chapter must include at least the following:
(1) A grant of authority to construct and operate a carbon
dioxide transmission pipeline as requested in the application.
(2) A grant of authority to use, occupy, and construct pipeline
facilities in any designated public right-of-way for the
construction and operation of the carbon dioxide transmission
pipeline.
(3) A grant of authority to take and acquire possession by
eminent domain of any property or interest in property for
the construction, maintenance, or operation of a carbon
dioxide transmission pipeline in the manner provided for the
exercise of the power of eminent domain under sections 7, 8,
and 9 of this chapter.
Sec. 7. If a carbon dioxide transmission pipeline company has
received a carbon dioxide transmission pipeline certificate of
authority from the department under this chapter and is not able
to reach an agreement with a property owner for the construction,
operation, and maintenance of the carbon dioxide transmission
pipeline on the owner's property, the company may proceed to
condemn a right-of-way or an easement necessary or useful for:
(1) constructing, maintaining, using, operating, and gaining
access to a carbon dioxide transmission pipeline and all
necessary machinery, equipment, pumping stations,
appliances, and fixtures for use in connection with the carbon
dioxide transmission pipeline; and
(2) obtaining all necessary rights of ingress and egress to
construct, examine, alter, repair, maintain, operate, or
remove a carbon dioxide transmission pipeline and all of its
component parts.
Sec. 8. Except as otherwise provided in this chapter, IC 32-24-1
applies to the condemnation of property under this chapter by a
carbon dioxide transmission pipeline company.
Sec. 9. A carbon dioxide transmission pipeline company that
exercises the authority set forth in section 7 of this chapter shall:
(1) compensate the property owner by making a payment to
the owner equal to:
(A) one hundred twenty-five percent (125%) of the fair
market value of the interest in the property acquired, if the
right-of-way or easement involves agricultural land; or
(B) one hundred fifty percent (150%) of the fair market
value of the interest in the property acquired, if the
right-of-way or easement involves a parcel of property
occupied by the owner as a residence; and
(2) pay to the property owner:
(A) any damages determined under IC 32-24-1; and
(B) any loss incurred in a trade or business;
that are attributable to the exercise of eminent domain.
Sec. 10. Not later than one hundred eighty (180) days after the
completion of a carbon dioxide transmission pipeline for which the
department has issued a certificate of authority under this chapter,
the carbon dioxide transmission pipeline company shall provide
maps and other documentation to the department showing the
actual route in Indiana of the carbon dioxide transmission pipeline.
Sec. 11. A determination of the department under section 4(e)(2)
of this chapter is subject to administrative review under IC 4-21.5.
Sec. 12. The department shall deposit fee revenue received
under section 4(a)(1) of this chapter in the oil and gas
environmental fund established by IC 14-37-10-2.
Sec. 13. This chapter expires July 1, 2021.
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