Bill Text: IN SB0560 | 2013 | Regular Session | Enrolled
Bill Title: Utility transmission.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2013-05-13 - Public Law 133 [SB0560 Detail]
Download: Indiana-2013-SB0560-Enrolled.html
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
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
AN ACT to amend the Indiana Code concerning utilities.
Chapter 12.5. Infrastructure Development Zones
Sec. 1. As used in this chapter, "eligible infrastructure" means the following:
(1) Storage, compressed natural gas, liquefied natural gas, transmission, and distribution facilities to be used in the delivery of natural gas, or supplemental or substitute forms of gas sources by a natural gas utility.
(2) Facilities and technologies used in the deployment and transmission of broadband service, however defined or classified by the Federal Communications Commission, or advanced services (as defined in 47 CFR 51.5) by a provider of broadband service or advanced services.
(3) Facilities used in the treatment, storage, or distribution of water by a water utility.
Sec. 2. As used in this chapter, "natural gas utility" means a utility engaged in the business of furnishing natural gas service to the public.
Sec. 3. As used in this chapter, "person" means a firm, association, cooperative, corporation, limited liability company,
business trust, partnership, or limited liability partnership.
Sec. 4. A county executive, or in Marion County, the county
fiscal body, may adopt an ordinance designating a geographic
territory as an infrastructure development zone after:
(1) conducting a public hearing on the proposed ordinance;
(2) publishing notice of the public hearing in the manner
prescribed by IC 5-3-1; and
(3) making the following findings:
(A) Adequate eligible infrastructure is not available in the
zone.
(B) Providing a property tax exemption to a person for
investing in eligible infrastructure in the zone will provide
opportunities for increased natural gas usage, increased
availability of broadband service, advanced services, and
public water, and economic development benefits in the
zone.
Sec. 5. If an infrastructure development zone is established
under this chapter, eligible infrastructure located in the zone is
exempt from property taxation.
(b) The consumer counselor may make use of engineers, experts, and accountants employed by the commission or the Indiana department of transportation and direct them to make appraisals and audits in the performance of the consumer counselor's duties under this chapter and IC 8-1-1 and IC 8-1-2. In so doing, the consumer counselor shall have access to the records and files of the commission or the Indiana department of transportation.
(c) The consumer counselor may employ, with the approval of the governor and the budget agency, additional stenographers, examiners, experts, engineers, assistant counselors, accountants, and consulting firms with expertise in utility, motor carrier, or railroad economics or management or both, at salaries and compensation and for a length of time as the governor and the budget agency may approve for a
particular case or investigation. The compensation for the additional
personnel together with the cost of transportation, hotel, telegram, and
telephone bills while traveling on public business shall be paid from
the expert witness fee account, or, with the approval of the governor
and the budget agency, from a contingency fund established under
IC 8-1-6-1 on warrants drawn by the auditor of state, sworn to by the
parties who incurred the expenses.
(d) Expenses incurred by the regular staff of the office and approved
by the consumer counselor, or an expense incurred by the commission
or the Indiana department of transportation under subsection (b), shall
be charged and paid in the manner provided in IC 8-1-2-70 or IC 8-1-6,
whichever is appropriate under the circumstances.
(e) Nothing in this chapter may be construed to prevent a party
interested in a proceeding, suit, or action from appearing in person or
from being represented by counsel.
(f) Persons hired by the consumer counselor as provided by this
section are exempt from the job classifications and compensation
schedules established under IC 4-15.
(g) The consumer counselor may purchase, lease, or otherwise
acquire sufficient technical equipment necessary for the consumer
counselor to carry out the consumer counselor's statutory duties.
(h) The consumer counselor may submit to the budget agency
a request for funds sufficient to carry out any new duties or
responsibilities created under IC 8-1-39-12(b). The consumer
counselor shall include in its annual report to the regulatory
flexibility committee:
(1) a description of its activities under IC 8-1-39-12(b); and
(2) a summary of the costs associated with those activities.
(b) A customer of an electricity supplier (as defined in IC 8-1-2.3-2) that is a public utility that is under the jurisdiction of
the commission for the approval of rates and charges may apply to
the commission for a temporary discount to the demand
component of the rates and charges contained in the electricity
supplier's applicable standard tariff for service to a single facility
of the customer that is located in Indiana if the customer:
(1) has or will have a maximum demand for electricity of at
least ten (10) megawatts at the facility;
(2) employs more than fifty (50) full-time employees at the
facility;
(3) demonstrates that the temporary discount is necessary and
essential for the customer to attract or create additional jobs
or retain existing jobs at the facility;
(4) demonstrates that the customer's demand for electricity at
the facility will increase by at least one (1) megawatt as a
result of the jobs created or retained under subdivision (3);
and
(5) has applied for and received from the Indiana economic
development corporation approval for the requested
temporary discount amount.
(c) Upon receiving an application from a customer of an
electricity supplier under subsection (b), the commission may
approve a temporary discount to the demand component of the
rates and charges contained in the electricity supplier's applicable
standard tariff if the commission finds that the discount is just and
reasonable and consistent with the circumstances described by the
customer under subsection (b), as follows:
(1) For circumstances not described in subdivision (2) or (3),
a discount up to ten percent (10%).
(2) For circumstances involving a redevelopment project in
which the customer is involved, a discount up to fifteen
percent (15%).
(3) For circumstances involving a brownfield project in which
the customer is involved, a discount up to twenty percent
(20%).
(d) A temporary discount authorized under subsection (c)
expires three (3) years after the effective date of the discount. The
cost of the temporary discount shall be included by the commission
in the cost of service for the electricity supplier and shall be
deferred for ratemaking purposes by the electricity supplier for
subsequent recovery in connection with the electricity supplier's
next general retail electric rate case.
(e) A customer that receives a temporary discount under this
section for service to a facility may not:
(1) enter into a contract with the customer's electricity
supplier for electric utility service to the facility that provides
for rates, terms, or conditions that differ from the rates,
terms, and conditions contained in the electricity supplier's
applicable standard tariff; or
(2) take electric utility service to the facility under a
commission-approved economic development tariff offered by
the electricity supplier.
(f) A temporary discount authorized under subsection (c)
applies only to the demand component of the customer's rates and
charges related to the increase in the customer's load described in
subsection (b)(4). However, the commission may authorize the
application of the applicable temporary discount under subsection
(c) to all or part of the demand component of the customer's rates
and charges related to the entire facility if the commission
determines that a broader application is beneficial to all customers
of the electricity supplier.
(b) For purposes of this section, "case in chief" includes the following:
(1) Testimony, exhibits, and supporting work papers.
(2) Proposed test year and rate base cutoff dates.
(3) Proposed revenue requirements.
(4) Jurisdictional operating revenues and expenses, including taxes and depreciation.
(5) Balance sheet and income statements.
(6) Jurisdictional rate base.
(7) Proposed cost of capital and capital structure.
(8) Jurisdictional class cost of service study.
(9) Proposed rate design and pro forma tariff sheets.
(c) For purposes of this section, "utility" refers to the following:
(1) A public utility.
(2) A municipally owned utility.
(3) A cooperative owned utility.
(d) In a petition filed with the commission to change basic rates
and charges, a utility may designate a test period for the
commission to use. The utility must include with its petition the
utility's complete case in chief. The commission shall approve a test
period that is one (1) of the following:
(1) A forward looking test period determined on the basis of
projected data for the twelve (12) month period beginning not
later than twenty-four (24) months after the date on which the
utility petitions the commission for a change in its basic rates
and charges.
(2) A historic test period based on a twelve (12) month period
that ends not more than two hundred seventy (270) days
before the date on which the utility petitions the commission
for a change in its basic rates and charges. The commission
may adjust a historic test period for fixed, known, and
measurable changes and appropriate normalizations and
annualizations.
(3) A hybrid test period based on at least twelve (12)
consecutive months of combined historic data and projected
data. The commission may adjust the historic data as set forth
in subdivision (2).
(e) This subsection does not apply to a proceeding in which a
utility is seeking an increase in basic rates and charges and
requesting initial relief under IC 8-1-2.5-5 or IC 8-1-2.5-6. If the
commission does not issue an order on a petition filed by a utility
under subsection (d) within three hundred (300) days after the
utility files its case in chief in support of the proposed increase, the
utility may temporarily implement fifty percent (50%) of the
utility's proposed permanent increase in basic rates and charges,
subject to the commission's review and determination under
subsection (f). The utility shall submit the proposed temporary
rates and charges to the commission at least thirty (30) days before
the date on which the utility seeks to implement the temporary
rates and charges. The temporary rates and charges may reflect
proposed or existing approved customer class allocations and rate
designs. However, if the utility uses a forward looking test period
described in subsection (d)(1) or a hybrid test period described in
subsection (d)(3), the utility may not:
(1) implement the temporary increase before the date on
which the projected data period begins; or
(2) object during a proceeding before the commission to a
discovery request for historic data as described in subsection
(d)(2) solely on the basis that the utility has designated a
forward looking or hybrid test period.
(f) The commission shall review the temporary rates and
charges to determine compliance with this section. The temporary
rates and charges take effect on the latest of the following dates
unless the commission determines that the temporary rates and
charges are not properly designed in compliance with this section:
(1) The date proposed by the utility.
(2) Three hundred (300) days after the date on which the
utility files its case in chief.
(3) The termination of any extension of the three hundred
(300) day deadline authorized under subsection (g) or (h).
If the commission determines that the temporary rates and charges
are not properly designed in compliance with this section, the
utility may cure the defect and file the corrected temporary rates
and charges with the commission within a reasonable period
determined by the commission.
(g) If the commission grants a utility an extension of the
procedural schedule, the commission may extend the three
hundred (300) day deadline set forth in subsection (e) by the length
of the extension.
(h) The commission may suspend the three hundred (300) day
deadline set forth in subsection (e) one (1) time for good cause. The
suspension may not exceed sixty (60) days.
(i) If a utility implements temporary rates and charges that
differ from the permanent rates and charges approved by the
commission in a final order on the petition filed under subsection
(d), the utility shall perform a reconciliation and implement a
refund, in the form of a credit rider, or a surcharge, as applicable,
on customer bills rendered on or after the date the commission
approves the credit or surcharge. The refund or surcharge shall be
credited or added in equal amounts each month for six (6) months.
The amount of the total refund or surcharge equals the amount by
which the temporary rates and charges differ from the permanent
rates and charges, plus, for a refund only, interest at the applicable
average prime rate for each calendar quarter during which the
temporary rates and charges were in effect.
Chapter 39. Transmission, Distribution, and Storage System Improvement Charges and Deferrals
Sec. 1. The definitions in IC 8-1-2-1 apply throughout this
chapter.
Sec. 2. As used in this chapter, "eligible transmission,
distribution, and storage system improvements" means new or
replacement electric or gas transmission, distribution, or storage
utility projects that:
(1) a public utility undertakes for purposes of safety,
reliability, system modernization, or economic development,
including the extension of gas service to rural areas;
(2) were not included in the public utility's rate base in its
most recent general rate case; and
(3) either were:
(A) designated in the public utility's seven (7) year plan
and approved by the commission under section 10 of this
chapter as eligible for TDSIC treatment; or
(B) approved as a targeted economic development project
under section 11 of this chapter.
Sec. 3. As used in this chapter, "pretax return" means the
TDSIC revenues necessary to:
(1) produce net operating income equal to the public utility's
weighted cost of capital multiplied by investments in eligible
transmission, distribution, and storage system improvements;
(2) pay state and federal income taxes imposed on the net
operating income calculated under subdivision (1); and
(3) pay state utility receipts taxes associated with TDSIC
revenues.
Sec. 4. As used in this chapter, "public utility" means:
(1) an energy utility (as defined in IC 8-1-2.5-2);
(2) a municipally owned utility (as defined in IC 8-1-2-1(h));
or
(3) a department of public utilities created by IC 8-1-11.1.
Sec. 5. As used in this chapter, "targeted economic development
project" means a project approved by the commission under
section 10(c) of this chapter.
Sec. 6. As used in this chapter, "TDSIC" refers to a
transmission, distribution, and storage system improvement
charge.
Sec. 7. As used in this chapter, "TDSIC costs" means the
following costs incurred with respect to eligible transmission,
distribution, and storage system improvements incurred both while
the improvements are under construction and post in service:
(1) Depreciation expenses.
(2) Operation and maintenance expenses.
(3) Extensions and replacements to the extent not provided for through depreciation, in the manner provided for in IC 8-1.5-3-8.
(4) Property taxes.
(5) Pretax returns.
The term includes costs associated with a targeted economic development project approved under section 11 of this chapter.
Sec. 8. As used in this chapter, "TDSIC revenues" means revenues produced through a TDSIC and excluding revenues from all other rates and charges.
Sec. 9. (a) Subject to subsection (c), a public utility that provides electric or gas utility service may file with the commission rate schedules establishing a TDSIC that will allow the periodic automatic adjustment of the public utility's basic rates and charges to provide for timely recovery of eighty percent (80%) of approved capital expenditures and TDSIC costs. The petition must:
(1) use the customer class revenue allocation factor based on firm load approved in the public utility's most recent retail base rate case order;
(2) include the public utility's seven (7) year plan for eligible transmission, distribution, and storage system improvements; and
(3) identify projected effects of the plan described in subdivision (2) on retail rates and charges.
The public utility shall provide a copy of the petition to the office of the utility consumer counselor when the petition is filed with the commission. The public utility shall update the public utility's seven (7) year plan under subdivision (2) with each petition the public utility files under this section. An update may include a petition for approval of a targeted economic development project under section 11 of this chapter.
(b) A public utility that recovers capital expenditures and TDSIC costs under subsection (a) shall defer the remaining twenty percent (20%) of approved capital expenditures and TDSIC costs, including depreciation, allowance for funds used during construction, and post in service carrying costs, and shall recover those capital expenditures and TDSIC costs as part of the next general rate case that the public utility files with the commission.
(c) Except as provided in section 15 of this chapter, a public utility may not file a petition under subsection (a) within nine (9) months after the date on which the commission issues an order changing the public utility's basic rates and charges with respect
to the same type of utility service.
(d) A public utility that implements a TDSIC under this chapter
shall, before the expiration of the public utility's approved seven
(7) year plan, petition the commission for review and approval of
the public utility's basic rates and charges with respect to the same
type of utility service.
(e) A public utility may file a petition under this section not
more than one (1) time every six (6) months.
(f) Actual capital expenditures and TDSIC costs that exceed the
approved capital expenditures and TDSIC costs require specific
justification by the public utility and specific approval by the
commission before being authorized for recovery in customer
rates.
Sec. 10. (a) A public utility shall petition the commission for
approval of the public utility's seven (7) year plan for eligible
transmission, distribution, and storage improvements. A plan
submitted under this subsection may include for approval a
targeted economic development project described in section 11 of
this chapter.
(b) Following notice and hearing, and not more than two
hundred ten (210) days after the public utility petitions the
commission under subsection (a), the commission shall issue an
order on the petition. The order must include the following:
(1) A finding of the best estimate of the cost of the eligible
improvements included in the plan.
(2) A determination whether public convenience and necessity
require or will require the eligible improvements included in
the plan.
(3) A determination whether the estimated costs of the eligible
improvements included in the plan are justified by
incremental benefits attributable to the plan.
If the commission determines that the public utility's seven (7) year
plan is reasonable, the commission shall approve the plan and
designate the eligible transmission, distribution, and storage
improvements included in the plan as eligible for TDSIC
treatment.
(c) A public utility that provides gas service may petition the
commission to approve a targeted economic development project
as part of the public utility's seven (7) year plan under subsection
(a). The commission shall review within sixty (60) days the part of
the petition concerning the targeted economic development project
and approve the inclusion of the project if the commission
determines that the inclusion of the project is consistent with the
requirements of this chapter.
Sec. 11. (a) The extension, construction, addition, or
improvement of the plant and equipment of a public utility that is
installed to provide gas service to a targeted economic development
project is used and useful in the public service.
(b) A public utility shall apply to the Indiana economic
development corporation for approval to treat costs associated
with a targeted economic development project as TDSIC costs.
Costs approved by the Indiana economic development corporation
shall be treated as TDSIC costs and may be recovered through a
TDSIC under section 12 of this chapter. The TDSIC revenues
associated with a targeted economic development project shall not
be included in a public utility's total retail revenues for purposes
of determining an aggregate increase under section 14 of this
chapter.
(c) Notwithstanding any law or rule governing extension of
service, a public utility that provides gas service may, on a
nondiscriminatory basis, extend service in rural areas without a
deposit or other adequate assurance of performance from the
customer, to the extent that the extension of service results in a
positive contribution to the utility's overall cost of service over a
twenty (20) year period. However, if the public utility determines
that the extension of service to a targeted economic development
project will not result in a positive contribution to the utility's
overall cost of service over a twenty (20) year period, the public
utility may require a deposit or other adequate assurance of
performance from:
(1) the developer of the targeted economic development
project; or
(2) a local, regional, or state economic development
organization.
Sec. 12. (a) Not more than ninety (90) days after a public utility
files a petition under section 9 of this chapter, the commission shall
conduct a hearing and issue an order on the petition.
(b) Not more than sixty (60) days after a public utility files a
petition under section 9 of this chapter, the office of the utility
consumer counselor and other intervenors, if any, may:
(1) examine the information of the public utility to confirm
that the proposed transmission, distribution, and storage
system improvements comply with this chapter; and
(2) report its findings to the commission.
(c) If the commission determines that the petition satisfies the requirements of this chapter and the capital expenditures and TDSIC costs are reasonable, the commission shall approve the petition, including:
(1) capital expenditures;
(2) timely recovery of TDSIC costs, including costs associated with a targeted economic development project, through a TDSIC; and
(3) if requested, authority to defer TDSIC costs under section 9(b) of this chapter.
Sec. 13. (a) For purposes of calculating the TDSIC costs of a public utility, the commission shall determine an appropriate pretax return for the public utility. In determining the appropriate pretax return, the commission may consider the following factors:
(1) The current state and federal income tax rates.
(2) The public utility's capital structure.
(3) The actual cost rates for the public utility's long term debt and preferred stock.
(4) The public utility's cost of common equity determined by the commission in the public utility's most recent general rate proceeding.
(5) Other information that the commission determines is necessary.
(b) The commission shall adjust a public utility's authorized return for purposes of IC 8-1-2-42(d)(3) or IC 8-1-2-42(g)(3) to reflect incremental earnings from an approved TDSIC.
Sec. 14. (a) The commission may not approve a TDSIC that would result in an average aggregate increase in a public utility's total retail revenues of more than two percent (2%) in a twelve (12) month period. For purposes of this subsection, a public utility's total retail revenues do not include TDSIC revenues associated with a targeted economic development project.
(b) If a public utility incurs TDSIC costs under the public utility's seven (7) year capital expenditure plan that exceed the percentage increase in a TDSIC approved by the commission, the public utility shall defer recovery of the TDSIC costs as set forth in section 9(b) of this chapter.
Sec. 15. A public utility that has implemented a TDSIC 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 public utility's rate base
eligible transmission, distribution, and storage system
improvements reflected in the TDSIC.
Sec. 16. (a) For purposes of this chapter, the following are not
a general increase in basic rates and charges under IC 8-1-2-42(a):
(1) The filing of a TDSIC.
(2) A change in a TDSIC.
(3) The deferral of depreciation expenses, operation and
maintenance expenses, property taxes, or post in service
allowance for funds used during construction under section
9(b) of this chapter.
(b) This chapter does not limit:
(1) a public utility's ability to recover eligible transmission,
distribution, and storage system improvements in a general
retail rate case; or
(2) the commission's valuation of utility property under
IC 8-1-2-6.
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
TDSIC.
(b) A program developed under subsection (a) may require the department and utilities to share the following information:
(1) Active construction and excavation permits.
(2) Locations of existing utility facilities.
(3) Short and long term project schedules.
(c) The department may adopt rules under IC 4-22-2 to implement this section.
(b) As used in this SECTION, "legislative council" refers to the legislative council established by IC 2-5-1.1-1.
(c) As used in this SECTION, "regulatory flexibility committee" refers to the regulatory flexibility committee established under
IC 8-1-2.6-4.
(d) The legislative council is urged to assign to the regulatory
flexibility committee the topic of electric customer choice
programs.
(e) If the topic described in subsection (d) is assigned to the
regulatory flexibility committee, the regulatory flexibility
committee shall issue a final report to the legislative council
containing the regulatory flexibility committee's findings and
recommendations, including any recommended legislation
concerning the topic, in an electronic format under IC 5-14-6 not
later than November 1, 2013.
(f) This SECTION expires December 31, 2013.
Graphic file number 0 named seal1001.pcx with height 58 p and width 72 p Left aligned
