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SOURCE: IC; (02)MO002903.4. -->
"SECTION 4. IC-8-1-8.4 IS ADDED TO THE INDIANA CODE AS
CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON
Chapter 8.4. Merchant Power Plant Certification and Siting
Sec. 1. As used in this chapter, "brownfield" has the meaning set
forth in IC 13-11-2-19.3.
Sec. 2. (a) As used in this chapter, "merchant power plant"
means an electric generating facility all or a designated part of
which is used for the production and sale of electric energy
exclusively into the wholesale power market or to other utilities,
energy service providers, or power marketers within or outside
Indiana. However, for purposes of sections 2 through 18 of this
chapter, the term does not include a plant all or a designated part
of which, before becoming a plant or a designated part of a plant
used for the production and sale of electric energy exclusively into
the wholesale power market, was used to produce electric energy
for sale to retail Indiana customers.
(b) The term does not include plants owned by any of the
(1) A corporation organized and operating under IC 8-1-13.
(2) A nonprofit Indiana corporation most of whose members
are organized and operating under IC 8-1-13.
(3) A joint agency created and operating under IC 8-1-2.2.
(4) A municipally owned utility.
Sec. 3. As used in this chapter, "need" means a commission
finding supported by substantial evidence that:
(1) the regional power market has a projected need:
(A) for the type of capacity being proposed at or near the
time the proposed merchant power plant is expected to
become commercially operational; and
(B) that will not be met by other supply or demand side
resources reasonably expected to be available at or near
the time described in clause (A); and
(2) the merchant power plant being proposed is likely to be
dispatched with sufficient frequency in the wholesale regional
power market over the period of its expected operating life to
recover its revenue requirement.
Sec. 4. As used in this chapter, "person" means any corporation,
company, partnership, limited liability company, individual,
association of individuals, or their lessees, trustees, or receivers
appointed by a court.
Sec. 5. As used in this chapter, "petitioner" means a person that
files with the commission a petition under this chapter to site a
merchant power plant.
Sec. 6. Any person that owns, operates, manages, or controls a
merchant power plant in Indiana is a public utility (as defined in
Sec. 7. (a) A person may not begin to construct a merchant
power plant by significantly altering a site to install permanent
equipment or structures unless the person files a petition with and
obtains approval from the commission under this chapter.
(b) The commission shall issue a decision approving or denying
a petition under the chapter not earlier than two hundred seventy
(270) days after the filing of the petition.
(c) A person filing a petition under this chapter shall publish a
notice of the filing in a newspaper of general circulation published
in the county in which the proposed merchant power plant is to be
Sec. 8. (a) The commission may approve the siting of a merchant
power plant if the commission determines that the siting of the
merchant power plant is not adverse to the interests of the:
(1) citizens of Indiana; and
(2) citizens of the locality where the merchant power plant is
proposed to be sited.
Sec. 9. The commission shall consider the following when acting
upon a petition by a petitioner under this chapter:
(1) The need for the merchant power plant.
(2) The location of the merchant power plant.
(3) The ownership or transfer of ownership of the merchant
(4) The management of the merchant power plant.
(5) The financing of the merchant power plant.
(6) The capacity of the merchant power plant.
(7) The type and size of the merchant power plant.
(8) The type of fuel used by the merchant power plant.
(9) The merchant power plant's fuel supply arrangements and
its effect on the reliability of Indiana's electrical system and
the price and availability of the fuel for other uses in Indiana,
taking into account the effects of other merchant power
(10) The merchant power plant's electric supply contracts.
(11) The merchant power plant's effect on the electric and gas
transmission systems serving Indiana.
(12) The merchant power plant's effect on:
(A) water supplies and usage, taking into account the
effects of other merchant power plants using the same or
interconnected sources of water; and
(B) current users of the sources of water.
(13) Local ordinances and area plans.
(14) Oral and written testimony received by the commission
under section 13 of this chapter.
(15) The results of the study required under section 21 of this
(16) Other factors that the commission considers relevant in
making a determination required under this chapter.
Sec. 10. The petitioner must provide documentation to the
commission that it has thoroughly considered the feasibility and
economics of the following types of sites:
(1) Brownfield sites that are isolated from populated areas.
(2) Sites of existing or former utilities that can be replaced or
(3) Other sites identified for power plant and heavy industrial
development in local land use plans before the initiation of site
selection for the merchant power plant.
Sec. 11. (a) As used in this section:
(1) "department" refers to the department of natural
(2) "water resource" has the meaning set forth in
(b) When considering whether to approve a merchant power
plant, the commission shall obtain a recommendation from the
department regarding the merchant power plant's planned use of
and its potential effect on the water resource.
(c) In making its recommendation, the department may do the
(1) Rely on the merchant power plant's water resource
assessment under subsection (d).
(2) Consult with and advise users of the water resource.
(3) Enter upon any land or water in Indiana to evaluate the
effect of the merchant power plant on the water resource.
(4) Conduct studies to evaluate the availability and most
practical method of withdrawal, development, conservation,
and use of the water resource.
(5) Require metering or other reasonable measuring of water
withdrawals and reporting of the measurement to the
(6) Engage in any other activity necessary to carry out the
purposes of this section.
(d) A petitioner shall provide to the commission and the
department an assessment of the proposed merchant power plant's
effect on the water resource and its users. The assessment shall be
prepared by a licensed professional geologist (as defined in
IC 25-17.6-1-6.5) or an engineer licensed under IC 25-31-1. The
assessment must include the following information:
(1) Sources of water supply.
(2) Total amount of water to be used by the merchant power
plant for each source.
(3) Location of wells or points of withdrawal.
(4) Ability of the water resource to meet the needs of the
merchant power plant and other users.
(5) Ability of the water resource to meet the future needs of
the county in which the proposed merchant power plant is to
(6) Alternative sources of water supply.
(7) Conservation measures proposed by the petitioner for
reducing the merchant power plant's effect on the water
Sec. 12. (a) If a person files a petition with the commission under
this chapter or any other law for the siting of a merchant power
plant, the person must establish proof of financial responsibility by
filing one (1) or a combination of the following with the
commission at a time, either before or after commission approval
of the petition, that shall be determined by the commission:
(1) A fully funded trust fund agreement.
(2) A surety bond with a standby trust fund agreement.
(3) A letter of credit with a standby trust fund agreement.
(4) An insurance policy with a standby trust fund agreement.
(5) Proof that the merchant power plant meets a financial test
established by the commission and equivalent to one (1) of the
items in subdivisions (1) through (4).
(b) The amount of financial responsibility that a person must
establish under this section shall be determined by the commission.
In all cases, the amount must be sufficient, but not more than
reasonably necessary, to:
(1) fully decommission the site and remove structures,
equipment, and site hazards;
(2) minimize the need for further maintenance and
(3) provide for reasonable, foreseeable, and necessary
maintenance and remediation after closure of the merchant
power plant for at least twenty (20) years;
after the merchant power plant ceases operations.
(c) The commission may use:
(1) a trust fund agreement;
(2) a surety bond;
(3) a letter of credit;
(4) an insurance policy; or
(5) other proof of financial responsibility;
filed under this section for the closure and post closure monitoring,
maintenance, or remediation of a merchant power plant approved
by the commission if the merchant power plant does not comply
with closure or post closure standards established by the
commission under subsection (d).
(d) The commission shall adopt rules under IC 4-22-2 to
establish criteria for how money in a trust fund agreement, a
surety bond, a letter of credit, an insurance policy, or other proof
of financial responsibility provided by a merchant power plant
meets the standards to decommission the merchant power plant
under subsection (b)(1).
Sec. 13. (a) Not later than thirty (30) days after the petitioner
has prefiled its testimony before the commission for the siting of a
merchant power plant under this chapter, the commission shall
conduct a hearing at a location in the county in which the merchant
power plant is proposed.
(b) The commission shall send notice of the hearing by first class
mail at least ten (10) days before the hearing to the following:
(1) Relevant state regulatory agencies, as determined by the
(2) Zoning and area plan authorities for the:
(A) county; and
(B) municipality, if any;
where the merchant power plant is proposed.
(3) Record owners of real property located within one-half
(1/2) mile of the proposed site for the merchant power plant.
However, at the commission's discretion, the commission may
require notification to record owners of real property located
within not more than two (2) miles of the proposed site in
sparsely populated areas.
(c) The commission shall cause notice of the hearing to be
published in a newspaper of general circulation in each county in
which the merchant power plant is proposed. The publication
required under this subsection must occur once a week for two (2)
weeks, with the second publication occurring at least fifteen (15)
days before the date of the hearing.
(d) The commission shall accept written and oral testimony
from any person who appears at the public hearing.
(e) The commission shall make a record of the hearing and all
testimony received. The commission shall make the record
available for public inspection.
Sec. 14. Following the approval of a petition by the commission,
the merchant power plant shall submit the following to the
(1) At least one (1) week before commencement of
construction activities, a startup report that includes the:
(A) status of necessary permits; and
(B) expected in service date.
(2) A midpoint report, to be submitted at a time determined
by the commission, that includes information concerning the:
(A) status of construction; and
(B) expected in service date.
(3) A testing notice at least two (2) weeks before any testing of
the merchant power plant.
(4) At the time of the initial commercial operation of the
merchant power plant, an in service notice that includes the
(A) Contracts for firm utility sales and contracts for firm
sales to Indiana utilities.
(B) A summary of fuel contracts, including any pipelines
involved in the transactions.
(C) Contingency plans, if any, detailing response plans to
emergency conditions as required by state or local units of
government, transmission owners, or any regional
transmission grid operator.
(D) Certified dependable capacity rating.
(5) Not later than thirteen (13) months after the in service
date, a first year report that includes the following:
(A) Summer and winter dependable capacity ratings.
(B) The annual capacity factor, including the summer and
winter seasonal capacity factor.
(C) The hours of operation for each season.
(D) Total annual, peak day, and summer seasonal water
usage and discharge.
(E) An itemization of transmission load restrictions or
other operational restrictions incurred during the year.
(F) The number of employees employed by the merchant
(6) Other information requested by the commission.
Sec. 15. Following approval of a petition for the siting of a
merchant power plant by the commission, the petitioner must:
(1) notify the commission upon becoming an affiliate of any
regulated Indiana utility selling electricity at retail to Indiana
(2) obtain prior commission approval for the sale of electricity
to any affiliate that is a regulated Indiana retail utility, except
for electricity purchased on the wholesale spot market;
(3) obtain prior commission approval of any transfers of
ownership of the merchant power plant or its assets;
(4) obtain commission approval before altering the capacity
or significantly altering the size of the merchant power plant;
(5) obtain commission approval before altering the type of
Sec. 16. After notice and hearing, the commission may withdraw
its approval for the siting of a merchant power plant if the
petitioner or subsequent owner or operator:
(1) fails to commence construction of the merchant power
plant within two (2) years of the date of the commission's
order of approval and is no longer diligently pursuing the
commencement of construction of the merchant power plant;
(2) fails to complete construction of the merchant power plant
within five (5) years of the date of the commission's order of
Sec. 17. (a) A person that receives commission approval of the
siting of a merchant power plant under this chapter or any other
law, or the subsequent owner or operator of the merchant power
plant for which siting approval is given, must operate the merchant
power plant in accordance with the commission's order of
(b) If the commission finds that the merchant power plant is not
operating in accordance with the commission's approval, the
(1) order an
(2) revoke the approval after the investigation, a hearing, and
the conclusion of the appeals process.
Sec. 18. (a) Notwithstanding IC 8-1-2.5-5, the commission may
not decline to exercise its jurisdiction under this chapter with
respect to a merchant power plant. However, the commission may
adopt rules under IC 4-22-2 to establish procedures for the exercise
of its jurisdiction under this chapter that differ according to the
type, size, or fuel resource of the merchant power plant.
(b) Whenever the commission substantially declines its
jurisdiction under IC 8-1-2.5 with respect to a merchant power
plant and its developer, the developer may not exercise the powers
conferred under IC 4-20.5-7-10.5, IC 5-11-10-1(c)(1), IC 6-1.1-8-1
or IC 8-1-8-1, or any other rights, privileges, or immunities
conferred by law on electric
utilities assigned service areas under
IC 8-1-2.3 on account of the obligation of electric utilities to serve
the general public without undue discrimination at regulated rates
(c) Except as provided by federal law, the commission has sole
and exclusive jurisdiction over the siting and location of utility
facilities, including merchant power plants.
Sec. 19. Information pertaining to:
(1) fuel arrangements or contracts; or
(2) electric sales and contracts;
of merchant power plants that are approved by the commission
under this chapter or any other law is not a public record under
Sec. 20. The commission shall direct the state utility forecasting
group established under IC 8-1-8.5-3.5 to conduct an annual
regional power market study to assess:
(1) the need for merchant power plant additions in the region;
(2) the effect of merchant power plants on the price of fuels
used by merchant power plants;
(3) the effect of merchant power plants on the price of
(4) the effect of merchant power plant construction and
operation on the deployment of demand side resources
regionally and in Indiana;
(5) the amount of merchant power plant capacity contracted
to Indiana electric utilities;
(6) the amount of merchant power plant capacity contracted
to out of state marketers and electric utilities; and
(7) other issues the commission considers relevant.".
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