Various utility matters.
Introduced Version
SENATE BILL No. 548
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 8-1; IC 8-1.5-2.
Synopsis: Various utility matters. Provides that a public utility that
provides water service or wastewater service may establish a utility
system improvement charge (USIC). (Current law provides only for the
establishment of a distribution system improvement charge (DSIC),
and provides that a DSIC can be established only by a public utility that
provides water service.) Provides that a public utility may petition for
a change in its USIC every three months. (Current law provides that a
public utility may petition for a change in its DSIC not more than once
every 12 months.) Provides that a USIC may produce USIC revenues
totaling up to 10% of a public utility's base revenue level. (Current law
limits DSIC revenues to 5% of a public utility's base revenue.) Requires
a public utility to annually reconcile the difference between its USIC
revenues and costs. Repeals definitions related to DSICs. Makes
conforming amendments. Provides that a municipality or a municipally
owned utility may not purchase the property of a utility company that
provides water or sewer service (including a regional sewer and water
district) unless the utility regulatory commission (IURC): (1) finds that
the utility company has continued violations of the IURC's orders or the
law regulating the utility company after the IURC has ordered
compliance; or (2) finds after a review that the utility company has
severe deficiencies that the utility company has failed to remedy.
Provides that a utility may petition a court to stay proceedings of a
municipality or a municipally owned utility to acquire the utility.
Requires a municipality to submit the question of whether the
municipality should acquire a utility to a public question.
Effective: Upon passage.
Merritt
January 14, 2013, read first time and referred to Committee on Rules and Legislative
Procedure.
Introduced
First Regular Session 118th General Assembly (2013)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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SENATE BILL No. 548
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 8-1-2-92; (13)IN0548.1.1. -->
SECTION 1. IC 8-1-2-92, AS AMENDED BY P.L.172-2009,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 92. (a) Every license, permit, or franchise
granted after April 30, 1913, to any public utility shall have the effect
of an indeterminate permit subject to the provisions of this chapter, and
subject to the provisions that:
(1) the license, franchise, or permit may be revoked by the
commission for cause; or
(2)
except as provided in IC 8-1-30-6, the municipality may
purchase or condemn the property as provided in IC 8-1.5-2,
IC 36-9-23, or IC 36-9-25, as applicable.
Any such A municipality
that is authorized to purchase
such property
and every such public utility under subdivision (2) is required to sell
such the property at the value and according to the terms and
conditions as provided in IC 8-1.5-2, IC 36-9-23, or IC 36-9-25, as
applicable.
(b) If this chapter should be repealed or annulled, then all such
indeterminate franchises, permits, or grants shall cease and become
inoperative, and in place thereof such utility shall be reinstated in the
possession and enjoyment of the license, permit, or franchise
surrendered by such utility at the time of the issue of the indeterminate
franchise, permit, or grant; but in no event shall such reinstated license,
permit, or franchise be terminated within a less period than five (5)
years from the date of the repeal or annulment of this chapter.
SOURCE: IC 8-1-2-93; (13)IN0548.1.2. -->
SECTION 2. IC 8-1-2-93, AS AMENDED BY P.L.172-2009,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 93. Any public utility accepting or operating
under any indeterminate license, permit, or franchise granted after
April 30, 1913, shall by acceptance of any such indeterminate license,
permit, or franchise be deemed to have consented to a future purchase
or condemnation of its property including property located in
contiguous territory within six (6) miles of the corporate limits of such
municipality by the municipality in which such utility is located, at the
value and under the terms and conditions as provided in IC 8-1.5-2,
IC 36-9-23, or IC 36-9-25, as applicable, and shall thereby be deemed
to have waived the right of requiring the necessity of such taking to be
established by the judgment of a court, and to have waived all other
remedies and rights relative to condemnation, except such rights and
remedies as are provided in IC 8-1.5-2, IC 36-9-23, or IC 36-9-25, as
applicable, and shall have been deemed to have consented to the
revocation of its license, permit, or franchise by the commission for
cause. However, after June 30, 2013, this section does not apply to
a public utility that provides water or sewer utility services unless:
(1) the commission makes a finding under IC 8-1-30-4; and
(2) the procedures and requirements of IC 8-1-30 have been
complied with and satisfied.
SOURCE: IC 8-1-30-6; (13)IN0548.1.3. -->
SECTION 3. IC 8-1-30-6 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 6. A municipality or other
governmental unit may not require a utility company that provides
water or sewer service to sell property used in the provision of such
service to the municipality or governmental unit under IC 8-1-2-92,
IC 8-1-2-93, or otherwise, unless:
(1) the commission has made all necessary findings under
section 4 of this chapter; and
(2) the procedures and requirements of this chapter have been
complied with and satisfied.
SOURCE: IC 8-1-31-2; (13)IN0548.1.4. -->
SECTION 4. IC 8-1-31-2 IS REPEALED [EFFECTIVE UPON
PASSAGE]. Sec. 2. As used in this chapter, "DSIC" refers to
distribution system improvement charge.
SOURCE: IC 8-1-31-3; (13)IN0548.1.5. -->
SECTION 5. IC 8-1-31-3 IS REPEALED [EFFECTIVE UPON
PASSAGE]. Sec. 3. As used in this chapter, "DSIC costs" means
depreciation expenses and pretax return associated with eligible
distribution system improvements.
SOURCE: IC 8-1-31-4; (13)IN0548.1.6. -->
SECTION 6. IC 8-1-31-4 IS REPEALED [EFFECTIVE UPON
PASSAGE]. Sec. 4. As used in this chapter, "DSIC revenues" means
revenues produced through a DSIC exclusive of revenues from all other
rates and charges.
SOURCE: IC 8-1-31-5; (13)IN0548.1.7. -->
SECTION 7. IC 8-1-31-5 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 5. As used in this chapter,
"eligible distribution utility system improvements" means new used
and useful water utility distribution or wastewater collection plant
projects that:
(1) do not increase revenues by connecting the distribution utility
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.
SOURCE: IC 8-1-31-6; (13)IN0548.1.8. -->
SECTION 8. IC 8-1-31-6 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 6. As used in this chapter,
"pretax return" means the revenues necessary to:
(1) produce net operating income equal to the public utility's
weighted cost of capital multiplied by the net original cost of
eligible distribution utility system improvements; and
(2) pay state and federal income taxes applicable to such income.
SOURCE: IC 8-1-31-7.5; (13)IN0548.1.9. -->
SECTION 9. IC 8-1-31-7.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 7.5. As used in this chapter, "USIC" refers
to a utility system improvement charge.
SOURCE: IC 8-1-31-7.6; (13)IN0548.1.10. -->
SECTION 10. IC 8-1-31-7.6 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 7.6. As used in this chapter, "USIC costs"
means depreciation expenses and pretax return associated with
eligible utility system improvements.
SOURCE: IC 8-1-31-7.7; (13)IN0548.1.11. -->
SECTION 11. IC 8-1-31-7.7 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 7.7. As used in this chapter, "USIC
revenues" means revenues produced through a USIC exclusive of
revenues from all other rates and charges.
SOURCE: IC 8-1-31-8; (13)IN0548.1.12. -->
SECTION 12. IC 8-1-31-8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 8. (a) Except as
provided in subsection (d), a public utility providing water
or
wastewater utility service may file with the commission rate
schedules establishing a DSIC USIC that will allow the automatic
adjustment of the public utility's basic rates and charges to provide for
recovery of DSIC USIC 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.
SOURCE: IC 8-1-31-9; (13)IN0548.1.13. -->
SECTION 13. IC 8-1-31-9 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 9. (a) When a
petition is filed under section 8 of this chapter, the commission shall
conduct a hearing.
(b) The office of the utility consumer counselor may examine
information of the public utility to confirm that the utility system
improvements are in accordance with section 5 of this chapter, to
confirm proper calculation of the proposed charge, and submit a report
to the commission not later than thirty (30) days after the petition is
filed.
(c) The commission shall hold the hearing and issue its order not
later than sixty (60) days after the petition is filed.
(d) If the commission finds that a DSIC USIC petition complies
with the requirements of this chapter, the commission shall enter an
order approving the petition.
SOURCE: IC 8-1-31-10; (13)IN0548.1.14. -->
SECTION 14. IC 8-1-31-10 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 10. (a) Except as
provided in subsection (b), a public utility may, but is not required to,
file a petition for a change in its DSIC USIC not more often than one
(1) time every twelve (12) three (3) months.
(b) Except as provided in section 15 of this chapter, a public utility
may not file a petition for a change in its DSIC USIC 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.
SOURCE: IC 8-1-31-13; (13)IN0548.1.15. -->
SECTION 15. IC 8-1-31-13 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 13. The
commission may not approve a DSIC USIC to the extent it would
produce total DSIC USIC revenues exceeding five ten percent (5%)
(10%) of the public utility's base revenue level approved by the
commission in the public utility's most recent general rate proceeding.
SOURCE: IC 8-1-31-14; (13)IN0548.1.16. -->
SECTION 16. IC 8-1-31-14 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 14. The DSIC
USIC may be calculated based on a reasonable estimate of sales in the
period in which the charge will be in effect. At the end of each twelve
(12) month period the charge is in effect, following the date on which
the commission initially approves a USIC for a public utility
following the public utility's most recent general rate case, and
using procedures approved by the commission, the public utility shall
reconcile the difference between DSIC USIC revenues and DSIC
USIC costs during that the twelve (12) month period and recover or
refund the difference, as appropriate, through adjustment of the charge.
SOURCE: IC 8-1-31-15; (13)IN0548.1.17. -->
SECTION 17. IC 8-1-31-15 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 15. A public utility
that has implemented a DSIC USIC under this chapter shall file revised
rate schedules resetting the charge if new basic rates and charges
become effective for the public utility following a commission order
authorizing a general increase in rates and charges that includes in the
utility's rate base eligible distribution utility system improvements
reflected in the DSIC. USIC.
SOURCE: IC 8-1-31-16; (13)IN0548.1.18. -->
SECTION 18. IC 8-1-31-16 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 16. For purposes
of IC 8-1-2-42(a), the filing of a DSIC USIC and a change in a DSIC
USIC is not a general increase in basic rates and charges.
SOURCE: IC 8-1-31-17; (13)IN0548.1.19. -->
SECTION 19. IC 8-1-31-17 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 17. The
commission may adopt by rule under IC 4-22-2 or by order other
procedures not inconsistent with this chapter that the commission finds
reasonable or necessary to administer a DSIC. USIC.
SOURCE: IC 8-1.5-2-7; (13)IN0548.1.20. -->
SECTION 20. IC 8-1.5-2-7, AS AMENDED BY P.L.172-2009,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 7. (a) A certificate of public convenience and
necessity is not required as a condition precedent to the owning,
leasing, acquisition, construction, or operation of a utility by a
municipality, even if there is a public utility engaged in a similar
service. The acquisition of electric utility property and assignment of
a municipal electric utility's service area are, however, subject to the
provisions of IC 8-1-2.3 and IC 8-1-2-95.1.
(b)
Subsection (c) applies to the following:
(1) A municipality that wants to acquire an existing utility,
including by purchase or condemnation under IC 8-1-2-92,
IC 8-1-2-93, or otherwise.
(2) A municipality that wants to own and operate a utility
in a
location where,
or contiguous to where, there is a public utility
engaged in a similar service:
(1) (A) under a franchise granted by the municipality; or
(2) (B) under an indeterminate permit as defined in IC 8-1-2-1.
(c) Before a municipality described in subsection (b) may after
a hearing as provided by section 10 of this chapter, declare by
ordinance that public convenience and necessity require the
establishment of a municipally owned utility, the municipality shall:
(1) submit the question of whether the municipality shall
acquire or construct a utility, as applicable, to voters of the
municipality under section 34 of this chapter; and
(2) conduct a hearing under section 10 of this chapter.
SOURCE: IC 8-1.5-2-15; (13)IN0548.1.21. -->
SECTION 21. IC 8-1.5-2-15 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 15. (a) If the
municipality and the owners of a public utility are unable to agree upon
a price to be paid for the property of the public utility, the municipality
may
(1) by ordinance declare that a public necessity exists for the
condemnation of the utility property; and
(2) bring an action in the circuit or superior court of the county
where the municipality is located against the utility for the
condemnation of the property.
(b) An ordinance adopted under subsection (a) is final.
(c) (b) For the purpose of acquiring the property of a public utility,
the municipality
(1) may shall exercise the power of eminent domain in
accordance with IC 32-24. and
(2) is required only to establish the necessity of taking as this
chapter requires.
(d) (c) The provisions of this section do not apply to:
(1) the acquisition of electric utility property or the assignment of
service areas covered by IC 8-1-2.3 and IC 8-1-2-95.1; or
(2) the acquisition of water or sewer utility property unless
the requirements of IC 8-1-30 are satisfied.
SOURCE: IC 8-1.5-2-33; (13)IN0548.1.22. -->
SECTION 22. IC 8-1.5-2-33 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]:
Sec. 33. (a) Not more than thirty (30) days after
a municipality described in section 7(b)(1) or 7(b)(2) of this chapter
adopts an ordinance under section 7 of this chapter, the utility may
bring an action against the municipality in the circuit or superior
court of the county in which the municipality is located to
determine the question of public convenience and necessity.
(b) The court shall stay further action by the municipality under
the ordinance adopted under section 7 of this chapter pending the
court's determination.
(c) The court shall try the cause without delay and without a
jury and review the evidence de novo.
SOURCE: IC 8-1.5-2-34; (13)IN0548.1.23. -->
SECTION 23. IC 8-1.5-2-34 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 34. (a) This section does not apply to a
municipality that enters into an agreement with a public utility for
the acquisition of the property of the public utility, including the
purchase price of the property.
(b) Before a municipality described in section 7(b) of this
chapter may declare by ordinance that public convenience and
necessity require the establishment of a municipally owned utility,
the municipality shall submit the question of whether the
municipality shall acquire or construct a utility, as applicable, to
the voters of the municipality as a public question at a special or
general election. In submitting the public question to the voters, the
legislative body shall certify the question to the county election
board of the county containing the greatest percentage of
population of the municipality under IC 3-10-9-3. The county
election board shall adopt a resolution setting forth the text of the
public question and shall submit the question of public convenience
and necessity to the voters of the municipality at a special or
general election on a date specified by the municipal legislative
body.
(c) If a majority of voters voting on the public question vote for
the proposal, the municipality shall adopt the ordinance under
section 7(c) of this chapter.
(d) If a majority of voters voting on the public question vote
against the proposal, the municipality may not:
(1) adopt an ordinance under section 7(c) of this chapter; or
(2) hold an election on the same question for at least two (2)
years after the date of the original election.
SOURCE: ; (13)IN0548.1.24. -->
SECTION 24.
An emergency is declared for this act.
