Bill Text: IN SB0560 | 2013 | Regular Session | Introduced
Bill Title: Utility transmission.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2013-05-13 - Public Law 133 [SB0560 Detail]
Download: Indiana-2013-SB0560-Introduced.html
Citations Affected: IC 8-1.
Synopsis: Utility transmission. Requires the utility consumer
counselor (counselor) to investigate a utility's petition for a
transmission, distribution, and storage system improvement charge
(TDSIC) and report its activities to the utility regulatory commission
(commission). Authorizes the counselor to request additional funding
from the budget agency. Allows a utility to designate a test period for
the commission to use in determining an increase in the utility's rates
and charges. Provides that a utility may impose a temporary increase
in rates and charges while its rate case is pending before the
commission. Requires a utility to provide a refund to customers if the
temporary rates and charges exceed the rates and charges approved by
the commission. Authorizes a utility that provides electric or gas
service to petition the commission to recover TDSIC costs.
Effective: Upon passage.
January 14, 2013, read first time and referred to Committee on Utilities.
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
A BILL FOR AN ACT to amend the Indiana Code concerning
utilities.
(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 8-1-39-9(b). The consumer counselor shall include in its annual report to the regulatory flexibility committee:
(1) a description of its activities under IC 8-1-39-9(b); and
(2) a summary of the costs associated with those activities.
(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.
(b) For purposes of this section, "utility" refers to the following:
(1) A public utility.
(2) A municipally owned utility.
(3) A cooperative owned utility.
(c) 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 commission shall approve a test period that
satisfies one (1) of the following:
(1) A forward looking test period must be 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 must be 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 must be 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).
(d) 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 (c) within three hundred (300) days after the
utility files its case in chief in support of the proposed increase, the
utility may temporarily implement seventy-five percent (75%) of
the utility's proposed permanent increase in basic rates and
charges, subject to the commission's review and determination
under subsection (e). 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 (c)(1), the utility may
not implement the temporary increase before the date on which the
projected twelve (12) month period begins.
(e) 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 (f) or (g).
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.
(f) 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 (d) by the length
of the extension.
(g) The commission may suspend the three hundred (300) day
deadline set forth in subsection (d) if the commission finds that the
utility's case in chief has changed in a material and significant
manner that:
(1) the commission did not foresee or anticipate in the
prehearing conference order; and
(2) requires the commission to reschedule the date of the
evidentiary hearing established in the prehearing conference
order.
For purposes of this subsection, updates to information provided
in the normal course of a proceeding or in accordance with the
prehearing conference order do not constitute a material or
significant change. A suspension may not exceed sixty (60) days.
(h) 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
(c), 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.
Chapter 38. Transmission Reliability
Sec. 1. As used in this chapter, "electric transmission facility" means a high voltage transmission line with a rating of at least one hundred (100) kilovolts and related transmission facilities and controls.
Sec. 2. As used in this chapter, "incumbent electric transmission owner" means a public utility that owns, operates, and maintains an electric transmission facility in whole or in part in Indiana.
Sec. 3. (a) As used in this chapter, "local reliability electric transmission facility" means an electric transmission facility located in whole or in part in Indiana that is required by a regional transmission organization to satisfy the reliability standards of the North American Electric Reliability Corporation, a regional reliability organization, or a successor corporation or organization. If the electricity transmission facility is located in the territory of the PJM Interconnection regional transmission organization territory, or its successor organization, its rating must be:
(1) at least one hundred (100) kilovolts; and
(2) not more than three hundred (300) kilovolts.
(b) The term does not include an electric transmission facility to the extent the facility is required by a regional transmission organization primarily to address nonreliability drivers.
Sec. 4. As used in this chapter, "new electric transmission owner" means a corporation, company, partnership, limited liability company, or other organization that:
(1) on the date of its incorporation or organization, does not own, operate, or maintain an electric transmission facility located in whole or in part in Indiana; and
(2) is incorporated or organized to construct, own, operate, and maintain an electric transmission facility located in whole or in part in Indiana.
Sec. 5. As used in this chapter, "public utility" has the meaning
set forth in IC 8-1-8.5-1.
Sec. 6. As used in this chapter, "regional transmission
organization" refers to a regional transmission organization
approved by the Federal Energy Regulatory Commission.
Sec. 7. (a) The commission shall grant a new electric
transmission owner authority to operate as a public utility in
Indiana if the commission makes the following findings:
(1) The new electric transmission owner has the financial,
managerial, and technical capability to construct, own,
operate, and maintain an electric transmission facility.
(2) The new electric transmission owner has the ability and
intent to comply with all statutes, rules, and regulations
enforced by the commission.
(3) The new electric transmission owner has the intent to
construct, own, operate, and maintain an electric transmission
facility that is under consideration for selection in a regional
transmission plan.
(4) The new electric transmission owner has provided written
notice of its request for authority under this section to each
incumbent electric transmission owner that may connect its
existing electric transmission facility to the new electric
transmission facility of the new electric transmission owner.
(b) In making findings under subsection (a), the commission
may consider the creditworthiness of the new electric transmission
owner, including:
(1) the new electric transmission owner's investment grade
rating;
(2) guarantees of a parent company of the new electric
transmission owner that has an investment grade rating;
(3) a bank reference letter or bonding commitment on behalf
of the new electric transmission owner;
(4) the authority of the new electric transmission owner to
directly set rates or impose taxes; and
(5) the capability of the new electric transmission owner to
meet its financial obligations if it abandons the new electric
transmission facility after its construction.
Sec. 8. A new electric transmission owner shall notify the
commission in a timely manner of the dates on which construction
of the new electric transmission facility began and was completed.
Sec. 9. (a) An incumbent electric transmission owner has the
right to construct, own, operate, and maintain the following:
(1) A local reliability electric transmission facility that
connects to an electric transmission facility owned by the
incumbent electric transmission owner.
(2) Upgrades to an existing electric transmission facility
owned by the incumbent electric transmission owner.
(b) The right to construct, own, operate, and maintain a local
reliability facility that connects to electric transmission facilities
owned by two (2) or more incumbent electric transmission owners
belongs individually and proportionately to each incumbent
electric transmission owner, unless the incumbent electric
transmission owners otherwise agree in writing.
Sec. 10. (a) An incumbent electric transmission owner may enter
into a contract with a new electric transmission owner that
proposes to connect a new electric transmission facility to the
electric transmission facility of the incumbent electric transmission
owner. The contract may assign responsibility for:
(1) maintenance and upgrades; and
(2) reliability compliance;
with respect to the new electric transmission facility.
(b) The commission has jurisdiction to resolve a dispute arising
under a contract described in subsection (a).
Sec. 11. This chapter does not affect an incumbent electric
transmission owner's use and control of existing property rights.
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 electric or gas transmission, distribution, or storage utility projects that:
(1) a public utility undertakes for purposes of safety, replacement, reliability, system modernization, or economic development, including the extension of gas service to rural areas; and
(2) were not included in the public utility's rate base in its most recent general rate case.
Sec. 3. 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 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 incremental
revenues produced by a TDSIC.
Sec. 4. As used in this chapter, "public utility" means:
(1) a public utility (as defined in IC 8-1-2-1(a)); or
(2) a municipally owned utility (as defined in IC 8-1-2-1(h)).
Sec. 5. As used in this chapter, "TDSIC" refers to a
transmission, distribution, and storage system improvement
charge.
Sec. 6. 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, as provided for in IC 8-1.5-3-8.
(4) Property taxes.
(5) Pretax returns.
Sec. 7. As used in this chapter, "TDSIC revenues" means
revenues produced through a TDSIC and excluding revenues from
all other rates and charges.
Sec. 8. (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 TDSIC costs. The petition must:
(1) use the customer class revenue allocation approved in the
public utility's most recent retail base rate case order;
(2) include the public utility's five (5) 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 is not required to publish a notice of
the filing of the petition. The public utility may, but is not required
to, update the public utility's five (5) year plan under subdivision
(2) with each petition the public utility files under this section.
(b) Alternatively, the public utility may:
(1) defer recovery of some or all of its TDSIC costs for five (5)
years or less; and
(2) recover the deferred TDSIC costs through an addition to
the public utility's rate base over the remaining useful life of
the eligible transmission, distribution, and storage system
improvements.
(c) Except as provided in section 12 of this chapter, a public
utility may not file a petition under subsection (a) within six (6)
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) 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 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.
(e) A public utility may file a petition under this section not
more than one (1) time every six (6) months.
Sec. 9. (a) Not more than sixty (60) days after a public utility
files a petition under section 8 of this chapter, the commission shall
conduct a hearing and issue an order on the petition.
(b) Not more than thirty (30) days after a public utility files a
petition under section 8 of this chapter, the office of the utility
consumer counselor 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 through a TDSIC; and
(3) if requested, authority to:
(A) defer some or all TDSIC costs; and
(B) recover the deferred TDSIC costs through an addition
to the public utility's rate base over the remaining useful
life of the eligible transmission distribution, and storage
system improvements in a subsequent rate case;
in an amount not to exceed the amount set forth in the petition
under section 8(a)(2) or 8(b) of this chapter.
Sec. 10. (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. 11. (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 three percent (3%) in a twelve
(12) month period.
(b) If a public utility incurs TDSIC costs under the public
utility's five (5) 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.
Sec. 12. 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. 13. (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 8
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. 14. 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.
