2013 Indiana Code TITLE 8. UTILITIES AND TRANSPORTATION ARTICLE 1. UTILITIES GENERALLY CHAPTER 8.8. UTILITY GENERATION AND CLEAN COAL TECHNOLOGY
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IC 8-1-8.8
Chapter 8.8. Utility Generation and Clean Coal Technology
IC 8-1-8.8-1
Legislative findings and declaration of purpose
Sec. 1. (a) The general assembly makes the following findings:
(1) Growth of Indiana's population and economic base has
created a need for new energy production or generating
facilities in Indiana.
(2) The development of a robust and diverse portfolio of energy
production or generating capacity, including coal gasification
and the use of renewable energy resources, is needed if Indiana
is to continue to be successful in attracting new businesses and
jobs.
(3) Indiana has considerable natural resources that are currently
underutilized and could support development of new energy
production or generating facilities, including coal gasification
facilities, at an affordable price.
(4) Certain regions of the state, such as southern Indiana, could
benefit greatly from new employment opportunities created by
development of new energy production or generating facilities
utilizing the plentiful supply of coal from the geological
formation known as the Illinois Basin.
(5) Technology can be deployed that allows high sulfur coal
from the geological formation known as the Illinois Basin to be
burned or gasified efficiently while meeting strict state and
federal air quality limitations. Specifically, the state should
encourage the use of advanced clean coal technology, such as
coal gasification.
(6) It is in the public interest for the state to encourage the
construction of new energy production or generating facilities
that increase the in-state capacity to provide for current and
anticipated energy demand at a competitive price.
(7) It is in the public interest for the state to encourage the
study, analysis, development, and life cycle management of
nuclear energy production or generating facilities, as well as
carbon dioxide capture, transportation, and storage facilities.
(b) The purpose of this chapter is to enhance Indiana's energy
security and reliability by ensuring all of the following:
(1) Indiana's and the region's energy production or generating
capacity continues to be adequate to provide for Indiana's
current and future energy needs, including the support of the
state's economic development efforts.
(2) The vast and underutilized coal resources of the Illinois
Basin are used as a fuel source for new energy production or
generating facilities.
(3) The electric transmission and gas transportation systems
within Indiana are upgraded to distribute additional amounts of
electricity and gas more efficiently.
(4) Jobs are created as new energy production or generating
facilities are built in regions throughout Indiana.
(5) The study, analysis, development, and life cycle
management of nuclear energy production or generating
facilities are encouraged at the same time as are new coal fired
and other fossil fuel based energy production or generating
facilities.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,
SEC.11; P.L.150-2011, SEC.2.
IC 8-1-8.8-2
"Clean coal and energy projects"
Sec. 2. As used in this chapter, "clean energy projects" means any
of the following:
(1) Any of the following projects:
(A) Projects at new energy production or generating
facilities that employ the use of clean coal technology and
that produce energy, including substitute natural gas,
primarily from coal, or gases derived from coal, from the
geological formation known as the Illinois Basin.
(B) Projects to provide advanced technologies that reduce
regulated air emissions from or increase the efficiency of
existing energy production or generating plants that are
fueled primarily by coal or gases from coal from the
geological formation known as the Illinois Basin, such as
flue gas desulfurization and selective catalytic reduction
equipment.
(C) Projects to provide electric transmission facilities to
serve a new energy production or generating facility or a
nuclear energy production or generating facility.
(D) Projects that produce substitute natural gas from Indiana
coal by construction and operation of a coal gasification
facility.
(E) Projects or potential projects that enhance the safe and
reliable use of nuclear energy production or generating
technologies to produce electricity.
(2) Projects to develop alternative energy sources, including
renewable energy projects or coal gasification facilities.
(3) The purchase of fuels or energy produced by a coal
gasification facility or by a nuclear energy production or
generating facility.
(4) Projects described in subdivisions (1) through (2) that use
coal bed methane.
As added by P.L.159-2002, SEC.6. Amended by P.L.174-2005,
SEC.2; P.L.175-2007, SEC.12; P.L.150-2011, SEC.3.
IC 8-1-8.8-3
"Clean coal technology"
Sec. 3. As used in this chapter, "clean coal technology" means a
technology (including precombustion treatment of coal):
(1) that is used in a new or existing energy production or
generating facility and directly or indirectly reduces or avoids
airborne emissions of sulfur, mercury, or nitrogen oxides or
other regulated air emissions associated with the combustion or
use of coal; and
(2) that either:
(A) was not in general commercial use at the same or greater
scale in new or existing facilities in the United States at the
time of enactment of the federal Clean Air Act Amendments
of 1990 (P.L.101-549); or
(B) has been selected by the United States Department of
Energy for funding or loan guaranty under an Innovative
Clean Coal Technology or loan guaranty program under the
Energy Policy Act of 2005, or any successor program, and
is finally approved for such funding or loan guaranty on or
after the date of enactment of the federal Clean Air Act
Amendments of 1990 (P.L.101-549).
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,
SEC.13.
IC 8-1-8.8-4
"Coal gasification facility"
Sec. 4. As used in this chapter, "coal gasification facility" means
a facility in Indiana that uses a manufacturing process that converts
coal into a clean gas that can be used:
(1) as a fuel to generate energy; or
(2) as substitute natural gas.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,
SEC.14; P.L.150-2011, SEC.4.
IC 8-1-8.8-5
"Costs associated with qualified utility system property"
Sec. 5. As used in this chapter, "costs associated with qualified
utility system property" means capital, operation, maintenance,
depreciation, tax costs, and financing costs of or for qualified utility
system property.
As added by P.L.159-2002, SEC.6.
IC 8-1-8.8-6
"Eligible business"
Sec. 6. As used in this chapter, "eligible business" means an
energy utility (as defined in IC 8-1-2.5-2) or owner of a coal
gasification facility that:
(1) proposes to construct or repower a new energy production
or generating facility;
(2) proposes to construct or repower a project described in
section 2(1) or 2(2) of this chapter;
(3) undertakes a project to develop alternative energy sources,
including renewable energy projects or coal gasification
facilities; or
(4) purchases fuels or energy produced by a coal gasification
facility or by a nuclear energy production or generating facility.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,
SEC.15; P.L.150-2011, SEC.5.
IC 8-1-8.8-7
"Group"
Sec. 7. As used in this chapter, "group" refers to the forecasting
group established by IC 8-1-8.5-3.5.
As added by P.L.159-2002, SEC.6.
IC 8-1-8.8-8
"New energy production or generating facility"
Sec. 8. (a) As used in this chapter, "new energy production or
generating facility" refers to a generation or coal gasification facility
that satisfies all of the following:
(1) The facility produces energy primarily from coal or gases
from coal from the geological formation known as the Illinois
Basin.
(2) The facility is a:
(A) newly constructed or newly repowered energy plant; or
(B) newly constructed capacity expansion at an existing
plant;
dedicated primarily to serving Indiana retail customers.
(3) The repowering, construction, or expansion of the facility
was begun by an Indiana utility after July 1, 2002.
(4) Except for a facility that is a clean energy project under
section 2(2) of this chapter, the facility has an aggregate rated
electric generating capacity of at least one hundred (100)
megawatts for all units at one (1) site or a generating capacity
of at least four hundred thousand (400,000) pounds per hour of
steam.
(b) The term includes the transmission lines, gas transportation
facilities, and associated equipment employed specifically to serve
a new energy production or generating facility.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,
SEC.16; P.L.150-2011, SEC.6.
IC 8-1-8.8-8.5
"Nuclear energy production or generating facility"
Sec. 8.5. (a) As used in this chapter, "nuclear energy production
or generating facility" means an energy production or generation
facility that:
(1) uses a nuclear reactor as its heat source to provide steam to
a turbine generator to produce or generate electricity;
(2) supplies electricity to Indiana retail customers on July 1,
2011;
(3) is dedicated primarily to serving Indiana customers; and
(4) is undergoing a comprehensive life cycle management
project to enhance the safe and reliable operation of the facility
during the period the facility is licensed to operate by the
United States Nuclear Regulatory Commission.
(b) The term includes the transmission lines and other associated
equipment employed specifically to serve a nuclear energy
production or generating facility.
As added by P.L.150-2011, SEC.7.
IC 8-1-8.8-8.7
"Qualified utility system expenses"
Sec. 8.7. As used in this chapter, "qualified utility system
expenses" means the costs associated with the study, analysis, or
development of a life cycle management project for a nuclear energy
production or generating facility.
As added by P.L.150-2011, SEC.8.
IC 8-1-8.8-9
"Qualified utility system property"
Sec. 9. As used in this chapter, "qualified utility system property"
means any:
(1) new energy production or generating facility; or
(2) nuclear energy production or generating facility;
used, or to be used, in whole or in part, by an energy utility to
provide retail energy service (as defined in IC 8-1-2.5-3) regardless
of whether that service is provided under IC 8-1-2.5 or another
provision of this article.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,
SEC.17; P.L.150-2011, SEC.9.
IC 8-1-8.8-10
"Renewable energy resources"
Sec. 10. (a) As used in this chapter "renewable energy resources"
means the following:
(1) A clean energy resource listed in IC 8-1-37-4(a)(1) through
IC 8-1-37-4(a)(16).
(2) Low temperature, oxygen starved gasification of municipal
solid waste.
(3) Methane recovered from landfills for the production of
electricity.
(b) Except for energy described in subsection (a)(2) and
IC 8-1-37-4(a)(9), the term does not include energy from the
incinerations, burning, or heating of any of the following:
(1) Tires.
(2) General household, institutional, commercial, industrial
lunchroom, office, or landscape waste.
(c) The term excludes treated or painted lumber.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,
SEC.18; P.L.151-2009, SEC.4; P.L.95-2010, SEC.1; P.L.96-2011,
SEC.1; P.L.150-2011, SEC.10; P.L.224-2011, SEC.1; P.L.13-2013,
SEC.29.
IC 8-1-8.8-11
Incentives for clean energy projects; application to commission;
commission's time for determining elegibility
Sec. 11. (a) The commission shall encourage clean energy
projects by creating the following financial incentives for clean
energy projects, if the projects are found to be reasonable and
necessary:
(1) The timely recovery of costs and expenses incurred during
construction and operation of projects described in section 2(1)
or 2(2) of this chapter.
(2) The authorization of up to three (3) percentage points on the
return on shareholder equity that would otherwise be allowed
to be earned on projects described in subdivision (1).
(3) Financial incentives for the purchase of fuels or energy
produced by a coal gasification facility or by a nuclear energy
production or generating facility, including cost recovery and
the incentive available under subdivision (2).
(4) Financial incentives for projects to develop alternative
energy sources, including renewable energy projects or coal
gasification facilities.
(5) Other financial incentives the commission considers
appropriate.
(b) An eligible business must file an application to the
commission for approval of a clean energy project under this section.
This chapter does not relieve an eligible business of the duty to
obtain any certificate required under IC 8-1-8.5 or IC 8-1-8.7. An
eligible business seeking a certificate under IC 8-1-8.5 or IC 8-1-8.7
and this chapter for one (1) project may file a single application for
all necessary certificates. If a single application is filed, the
commission shall consider all necessary certificates at the same time.
(c) The commission shall promptly review an application filed
under this section for completeness. The commission may request
additional information the commission considers necessary to aid in
its review.
(d) The commission shall, after notice and hearing, issue a
determination of a project's eligibility for the financial incentives
described in subsection (a) not later than one hundred twenty (120)
days after the date of the application, unless the commission finds
that the applicant has not cooperated fully in the proceeding.
As added by P.L.159-2002, SEC.6. Amended by P.L.150-2011,
SEC.11.
IC 8-1-8.8-12
Recovery of costs; rate adjustment mechanisms
Sec. 12. (a) The commission shall provide financial incentives to
eligible businesses for:
(1) new energy production or generating facilities; and
(2) nuclear energy production or generating facilities;
in the form of timely recovery of the costs incurred in connection
with the study, analysis, development, siting, design, licensing,
permitting, construction, repowering, expansion, life cycle
management, operation, or maintenance of the facilities.
(b) An eligible business seeking authority to timely recover the
costs described in subsection (a) must apply to the commission for
approval of a rate adjustment mechanism in the manner determined
by the commission.
(c) An application must include the following:
(1) A schedule for the completion of construction, repowering,
life cycle management, or expansion of the facility for which
rate relief is sought.
(2) Copies of the most recent integrated resource plan filed with
the commission, if applicable.
(3) The amount of capital investment by the eligible business in
the facility.
(4) Other information the commission considers necessary.
(d) The commission shall allow an eligible business to recover:
(1) the costs associated with qualified utility system property;
and
(2) qualified utility system expenses;
if the eligible business provides substantial documentation that the
expected costs and expenses and the schedule for incurring those
costs and expenses are reasonable and necessary.
(e) The commission shall allow an eligible business to recover the
costs associated with the purchase of fuels or energy produced by a
coal gasification facility or by a nuclear energy production or
generating facility if the eligible business provides substantial
documentation that the costs associated with the purchase are
reasonable and necessary.
(f) A retail rate adjustment mechanism proposed by an eligible
business under this section may be based on actual or forecasted
data. If forecast data is used, the retail rate adjustment mechanism
must contain a reconciliation mechanism to correct for any variance
between the forecasted costs and the actual costs.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,
SEC.19; P.L.150-2011, SEC.12.
IC 8-1-8.8-13
Monthly report to lieutenant governor required
Sec. 13. An eligible business shall file a monthly report with the
lieutenant governor stating the following information:
(1) The amount of Illinois Basin coal, if any, purchased during
the previous month for use in a new energy production or
generating facility.
(2) The amount of any fuel or energy produced by:
(A) a coal gasification facility; or
(B) a nuclear energy production or generating facility;
that is purchased by the eligible business during the previous
month.
(3) Any other information the lieutenant governor may
reasonably require.
As added by P.L.159-2002, SEC.6. Amended by P.L.1-2006,
SEC.151; P.L.175-2007, SEC.20; P.L.150-2011, SEC.13.
IC 8-1-8.8-14
Annual study of using renewable energy resources
Sec. 14. The group shall conduct an annual study on the use,
availability, and economics of using in Indiana the clean energy
resources listed in IC 8-1-37-4(a)(1) through IC 8-1-37-4(a)(6). The
commission may direct the group to study additional clean energy
resources as the commission considers appropriate. Each year, the
group shall submit a report on the study to the commission for
inclusion in the commission's annual report to the regulatory
flexibility committee described in IC 8-1-2.5-9 and IC 8-1-2.6-4. The
commission shall direct the group concerning the appropriate level
of detail for the report. The report must include suggestions from the
group to encourage the development and use of clean energy
resources and technologies appropriate for use in Indiana.
As added by P.L.159-2002, SEC.6. Amended by P.L.71-2009, SEC.2;
P.L.150-2011, SEC.14.
IC 8-1-8.8-15
Commission's power to review approved projects
Sec. 15. The commission may review any project approved under
this chapter to determine that the project continues to comply with
the commission's order initially approving incentives under this
chapter. The commission may revoke any incentive approved in the
order if the commission finds that the project no longer complies
with the provisions of the order concerning the incentive.
As added by P.L.159-2002, SEC.6.
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