2013 Indiana Code TITLE 8. UTILITIES AND TRANSPORTATION ARTICLE 1. UTILITIES GENERALLY CHAPTER 8.4. FEDERALLY MANDATED REQUIREMENTS FOR ENERGY UTILITIES
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IC 8-1-8.4
Chapter 8.4. Federally Mandated Requirements for Energy
Utilities
IC 8-1-8.4-1
"Certificate"
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.
As added by P.L.150-2011, SEC.1.
IC 8-1-8.4-2
"Compliance project"
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.
As added by P.L.150-2011, SEC.1.
IC 8-1-8.4-3
"Energy utility"
Sec. 3. As used in this chapter, "energy utility" has the meaning
set forth in IC 8-1-2.5-2.
As added by P.L.150-2011, SEC.1.
IC 8-1-8.4-4
"Federally mandated costs"
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.
As added by P.L.150-2011, SEC.1.
IC 8-1-8.4-5
"Federally mandated requirements"
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.
As added by P.L.150-2011, SEC.1.
IC 8-1-8.4-6
Necessity for public convenience and necessity certification;
considerations for issuing a certificate
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.
As added by P.L.150-2011, SEC.1.
IC 8-1-8.4-7
Application for certificate; public hearing; granting certificate;
recovery of costs
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.
As added by P.L.150-2011, SEC.1.
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