Bill Text: IN SB0331 | 2010 | Regular Session | Introduced
Bill Title: Distribution system improvement charges.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-01-11 - First reading: referred to Committee on Utilities & Technology [SB0331 Detail]
Download: Indiana-2010-SB0331-Introduced.html
Citations Affected: IC 8-1.
Synopsis: Distribution system improvement charges. Provides that
electric, gas, and water utilities may implement distribution system
improvement charges (DSIC) as needed. (Under current law, only
water utilities may implement DSICs.) Requires the utility regulatory
commission (IURC) to approve a DSIC unless the DSIC would produce
revenues exceeding 5% of the utility's approved base revenues. Permits
the IURC to approve a DSIC that produces revenues exceeding 5% of
the utility's approved base revenues if the IURC determines that the
DSIC is in the best interest of the utility and the utility's ratepayers.
Provides that a public utility that implements a DSIC must appear
before the IURC at least once every three years for review and revision
of the utility's basic rates and charges. (Under current law, a utility
must appear before the IURC at least once every four years.) Requires
the IURC to proportionately reduce the basic rates and charges of a
utility that realizes cost savings from implementing a DSIC.
Effective: July 1, 2010.
January 11, 2010, read first time and referred to Committee on Utilities & Technology.
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A BILL FOR AN ACT to amend the Indiana Code concerning
utilities.
(1) the requested increase relates to a different type of utility service;
(2) the commission finds that the utility's financial integrity or service reliability is threatened; or
(3) the increase is based on:
(A) a rate structure previously approved by the commission; or
(B) orders of federal courts or federal regulatory agencies having jurisdiction over the utility.
The phrase "general increase in basic rates and charges" does not include changes in rates related solely to the cost of fuel or to the cost of purchased gas or purchased electricity or adjustments in accordance with tracking provisions approved by the commission.
(b) Except as provided in IC 8-1-31, no schedule of rates, tolls, and charges of a public, municipally owned, or cooperatively owned utility which includes or authorizes any changes in charges based upon costs is effective without the approval of the commission. Before the commission approves any changes in the schedule of rates, tolls, and charges of an electric utility, which generates and sells electricity, based upon the cost of fuel to generate electricity or upon the cost of fuel included in the cost of purchased electricity, the utility consumer counselor shall examine the books and records of the public, municipally owned, or cooperatively owned generating utility to determine the cost of fuel upon which the proposed charges are based. In addition, before such a fuel cost charge becomes effective, the commission shall hold a summary hearing on the sole issue of the fuel charge. The utility consumer counselor shall conduct
(c) Regardless of the pendency of any request for a fuel cost charge by any electric utility, the books and records pertaining to the cost of fuel of all public, municipally owned, or cooperatively owned utilities that generate electricity shall be examined by the utility consumer counselor not less often than quarterly, and the books and records of all electric nongenerating public, municipally owned, or cooperatively owned utilities shall be examined by the utility consumer counselor not less often than annually. The utility consumer counselor shall provide the commission with a report as to the examination of said books and records within a reasonable time following said examination. The utility consumer counselor may, if appropriate, request of the
commission a reduction or elimination of the fuel cost charge. Upon
such request, the commission shall hold a hearing forthwith in the
manner provided in sections 58, 59, and 60 of this chapter.
(d) An electric generating utility may apply for a change in its fuel
charge not more often than each three (3) months. When such
application is filed the petitioning utility shall show to the commission
its cost of fuel to generate electricity and the cost of fuel included in the
cost of purchased electricity, for the period between its last order from
the commission approving fuel costs in its basic rates and the latest
month for which actual fuel costs are available. The petitioning utility
shall also estimate its average fuel costs for the three (3) calendar
months subsequent to the expiration of the twenty (20) day period
allowed the commission in subsection (b). The commission shall
conduct a formal hearing solely on the fuel cost charge requested in the
petition subject to the notice requirements of IC 8-1-1-8 and shall grant
the electric utility the requested fuel cost charge if it finds that:
(1) the electric utility has made every reasonable effort to acquire
fuel and generate or purchase power or both so as to provide
electricity to its retail customers at the lowest fuel cost reasonably
possible;
(2) the actual increases in fuel cost through the latest month for
which actual fuel costs are available since the last order of the
commission approving basic rates and charges of the electric
utility have not been offset by actual decreases in other operating
expenses;
(3) the fuel adjustment charge applied for will not result in the
electric utility earning a return in excess of the return authorized
by the commission in the last proceeding in which the basic rates
and charges of the electric utility were approved. However,
subject to section 42.3 of this chapter, if the fuel charge applied
for will result in the electric utility earning a return in excess of
the return authorized by the commission, in the last proceeding in
which basic rates and charges of the electric utility were
approved, the fuel charge applied for will be reduced to the point
where no such excess of return will be earned; and
(4) the utility's estimate of its prospective average fuel costs for
each such three (3) calendar months are reasonable after taking
into consideration:
(A) the actual fuel costs experienced by the utility during the
latest three (3) calendar months for which actual fuel costs are
available; and
(B) the estimated fuel costs for the same latest three (3)
calendar months for which actual fuel costs are available.
(e) Should the commission at any time determine that an emergency
exists that could result in an abnormal change in fuel costs, it may, in
order to protect the public from the adverse effects of such change
suspend the provisions of subsection (d) as to the utility or utilities
affected by such an emergency and initiate such procedures as may be
necessary to protect both the public and the utility from harm. The
commission shall lift the suspension when it is satisfied the emergency
no longer exists.
(f) Any change in the fuel cost charge granted by the commission
under the provisions of this section shall be reflected in the rates
charged by the utility in the same manner as any other changes in rates
granted by the commission in a case approving the basic rates and
charges of the utility. However, the utility may file the change as a
separate amendment to its rate schedules with a reasonable reference
therein that such charge is applicable to all of its filed rate schedules.
(g) Except as provided in IC 8-1-31, no schedule of rates, tolls,
and charges of a public, municipally owned, or cooperatively owned
gas utility that includes or authorizes any changes in charges based
upon gas costs is effective without the approval of the commission
except those rates, tolls, and charges contained in schedules that
contain specific provisions for changes in gas costs or the cost of gas
that have previously been approved by the commission. Gas costs or
cost of gas may include the gas utility's costs for gas purchased by it
from pipeline suppliers, costs incurred for leased gas storage and
related transportation, costs for supplemental and substitute gas
supplies, costs incurred for exploration and development of its own
sources of gas supplies and other expenses relating to gas costs as shall
be approved by the commission. Changes in a gas utility's rates, tolls,
and charges based upon changes in its gas costs shall be made in
accordance with the following provisions:
(1) Before the commission approves any changes in the schedule
of rates, tolls, and charges of a gas utility based upon the cost of
the gas, the utility consumer counselor may examine the books
and records of the public, municipally owned, or cooperatively
owned gas utility to determine the cost of gas upon which the
proposed changes are based. In addition, before such an
adjustment to the gas cost charge becomes effective, the
commission shall hold a summary hearing on the sole issue of the
gas cost adjustment. The utility consumer counselor shall conduct
his review and make a report to the commission within thirty (30)
days after the utility's request for the gas cost adjustment is filed.
The commission shall hold the summary hearing and issue its
order within thirty (30) days after it receives the utility consumer
counselor's report. The provisions of this section and sections 39,
43, 54, 55, 56, 59, 60, and 61 of this chapter concerning the filing,
printing, and changing of rate schedules and the time required for
giving notice of hearing and requiring publication of notice do not
apply to such a gas cost adjustment or such a summary hearing.
(2) Regardless of the pendency of any request for a gas cost
adjustment by any gas utility, the books and records pertaining to
cost of gas of all public, municipally owned, or cooperatively
owned gas utilities shall be examined by the utility consumer
counselor not less often than annually. The utility consumer
counselor shall provide the commission with a report as to the
examination of said books and records within a reasonable time
following said examination. The utility consumer counselor may,
if appropriate, request of the commission a reduction or
elimination of the gas cost adjustment. Upon such request, the
commission shall hold a hearing forthwith in the manner provided
in sections 58, 59, and 60 of this chapter.
(3) A gas utility may apply for a change in its gas cost charge not
more often than each three (3) months. When such application is
filed, the petitioning utility shall show to the commission its cost
of gas for the period between its last order from the commission
approving gas costs in its basic rates and the latest month for
which actual gas costs are available. The petitioning utility shall
also estimate its average gas costs for a recovery period of not less
than the three (3) calendar months subsequent to the expiration of
the thirty (30) day period allowed the commission in subdivision
(1). The commission shall conduct a summary hearing solely on
the gas cost adjustment requested in the petition subject to the
notice requirements of IC 8-1-1-8 and may grant the gas utility the
requested gas cost charge if it finds that:
(A) the gas utility has made every reasonable effort to acquire
long term gas supplies so as to provide gas to its retail
customers at the lowest gas cost reasonably possible;
(B) the pipeline supplier or suppliers of the gas utility has
requested or has filed for a change in the costs of gas pursuant
to the jurisdiction and procedures of a duly constituted
regulatory authority;
(C) the gas cost adjustment applied for will not result, in the
case of a public utility, in its earning a return in excess of the
return authorized by the commission in the last proceeding in
which the basic rates and charges of the public utility were
approved; however, subject to section 42.3 of this chapter, if
the gas cost adjustment applied for will result in the public
utility earning a return in excess of the return authorized by the
commission in the last proceeding in which basic rates and
charges of the gas utility were approved, the gas cost
adjustment applied for will be reduced to the point where no
such excess of return will be earned; and
(D) the utility's estimate of its prospective average gas costs
for each such future recovery period is reasonable and gives
effect to:
(i) the actual gas costs experienced by the utility during the
latest recovery period for which actual gas costs are
available; and
(ii) the actual gas costs recovered by the adjustment of the
same recovery period.
(4) Should the commission at any time determine that an
emergency exists that could result in an abnormal change in gas
costs, it may, in order to protect the public or the utility from the
adverse effects of such change suspend the provisions of
subdivision (3) as to the utility or utilities affected by such an
emergency and initiate such procedures as may be necessary to
protect both the public and the utility from harm. The commission
shall lift the suspension when it is satisfied the emergency no
longer exists.
(5) Any change in the gas cost charge granted by the commission
under the provisions of this section shall be reflected in the rates
charged by the utility in the same manner as any other changes in
rates granted by the commission in a case approving the basic
rates and charges of the utility. However, the utility may file the
change as a separate amendment to its rate schedules with a
reasonable reference therein that such charge is applicable to all
of its filed rate schedules.
(1) For a public utility (as defined in IC 8-1-31-7) that implements a distribution system improvement charge under IC 8-1-31, at least once every three (3) years.
(2) For a utility other than a utility described in subdivision (1), at least once every four (4) years.
The commission may not authorize a filing for an increase in basic rates and charges more frequently than is permitted by operation of section 42(a) of this chapter.
(b) If the commission determines in a review under subsection (a) that a public utility has realized cost savings as a result of implementing a distribution system improvement charge under IC 8-1-31, the commission shall, as part of its review and revision, downwardly adjust the basic rates and charges of the public utility in proportion to the realized cost savings.
(1) electric power;
(2) natural gas;
(3) water; or
(4) steam;
by a public utility to retail customers or end users.
(1) do not increase revenues by connecting the distribution system to new customers;
(2) are in service; and
(3) were not included in the public utility's rate base in its most recent general rate case.
(1) public utility (as defined in IC 8-1-2-1(a)); or
(2) municipally owned utility (as defined in IC 8-1-2-1(h));
that produces, transmits, delivers, or furnishes water, gas, electricity, or steam.
providing water service may file with the commission rate schedules
establishing a DSIC that will allow the automatic adjustment of the
public utility's basic rates and charges to provide for recovery of DSIC
costs.
(b) The public utility shall serve the office of the utility consumer
counselor a copy of its filing at the time of its filing with the
commission.
(c) Publication of notice of the filing is not required.
(d) A public utility may not file a petition under this section in the
same calendar year in which the public utility has filed a request for a
general increase in the basic rates and charges of the public utility.
(b) Except as provided in section 15 of this chapter, a public utility may not file a petition for a change in its DSIC in the same calendar year in which the public utility has filed a request for a general increase in the basic rates and charges of the public utility.
(b) The commission may approve a DSIC that produces total DSIC revenues exceeding five percent (5%) of the public utility's base revenue level approved by the commission in the public utility's most recent general rate proceeding if the commission determines that approving the DSIC is in the best interest of the public utility and the public utility's ratepayers.
(b) Notwithstanding any other law, a public utility that
implements a DSIC under this chapter shall appear before the commission at least once every three (3) years for a periodic review and revision of the public utility's basic rates and charges under IC 8-1-2-42.5.
