Synopsis: Clean coal and energy projects and research. Proposed conference committee report for ESB 29. Creates a center for coal technology research to develop technologies to advance the use of Indiana coal. Requires the department of commerce to pursue available private and public sources of money for the coal research grant fund. Eliminates the requirement in existing law that energy generating facilities must be primarily fueled by Indiana coal in order to recover in their rates construction costs for clean coal technologies, for construction that begins after March 31, 2002. Encourages: (1) new energy generating facilities in Indiana that use clean coal technology and are fueled using Illinois Basin coal resources; (2) advanced technologies that reduce regulated air emissions from existing generating plants primarily fueled by Illinois Basin coal; (3) projects to provide electric transmission facilities to serve a new generating facility; (4) projects to develop alternative energy sources, including renewable energy projects; and (5) the purchase by energy utilities of fuels produced by coal gasification facilities in Indiana. Directs the utility regulatory commission (IURC) to encourage clean coal and energy projects through financial incentives. Provides that the IURC shall encourage and provide incentives for certain clean coal and energy projects only if the projects are reasonable and necessary. Directs the state utility forecasting group to conduct an annual study on the use, availability, and economics of using renewable energy resources in Indiana and to submit a report of its findings to the IURC. Allows the IURC to review any approved clean coal and energy project to determine that the project continues to comply with the IURC's order initially approving incentives for the project. Allows the IURC to revoke any incentive if it finds that the project no longer complies with the provisions in the order concerning the incentive. Provides that for ratemaking purposes, wages paid by a utility to an independent contractor for construction of clean coal and energy projects are not excessive if the wages are those normally paid for work of the same type and quality in the labor market. (This conference committee report: (1) removes language providing that the IURC has jurisdiction over a utility's purchase of clean coal technology from third parties; (2) removes provisions giving the IURC the authority to impose civil penalties against public utilities in certain cases; (3) removes provisions giving the IURC jurisdiction over various utility mergers; (4) removes provisions concerning the IURC's jurisdiction over merchant power plants; (5) adds a provision allowing certain clean coal incentives for projects to provide electric
transmission facilities serving a new generating facility; (6) changes the date after which certain
technologies are considered clean coal technologies for purposes of clean coal and energy project
incentives from July 1, 1989, to the date of enactment of the federal Clean Air Act Amendments
of 1990; (7) clarifies that a new generating facility that qualifies as a project to develop
alternative energy resources is not required to have a generating capacity of at least 100
megawatts to qualify for incentives; (8) provides that renewable energy projects eligible for clean
coal and energy project incentives include fuel cells and energy produced from waste to energy
facilities producing steam not used to produce electricity; (9) provides that the IURC shall
encourage and provide incentives for projects only if the projects are reasonable and necessary,
instead of reasonable and in the public interest; (10) clarifies that an application to the IURC for
approval of a clean coal and energy project is required in addition to any application required
under existing law for the construction of an energy generating facility; (11) decreases the time
by which the IURC must issue a determination of a project's eligibility for financial incentives
from 180 days to 120 days from the date of the application; (12) eliminates language providing
that the recovery of construction costs for new generating facilities using clean coal technology
is in place of the normal allowance for funds used during construction (AFUDC) recovery; (13)
adds provisions concerning wages paid for construction of clean coal and energy projects; and
(14) eliminates the requirement in existing law that energy generating facilities must be primarily
fueled by Indiana coal in order to recover in their rates construction costs for clean coal
technologies, for construction that begins after March 31, 2002.
Effective: July 1, 2002; Upon passage.
Your Conference Committee appointed to confer with a like committee from the House upon Engrossed House Amendments to Engrossed Senate Bill No. 29 respectfully reports that said two committees have conferred and agreed as follows to wit:
that the Senate recede from its dissent from all House amendments and that
the Senate now concur in all House amendments to the bill and that the bill
be further amended as follows:
"Indiana coal" means coal from a mine whose coal deposits are located in the ground wholly or partially in Indiana regardless of the location of the mine's tipple.
"Qualified pollution control property" means an air pollution control device on a coal burning electric generating facility or any equipment that constitutes clean coal technology that has been approved for use by the commission, that meets applicable state or federal requirements, and that is designed to accommodate the burning of coal from the geological formation known as the Illinois Basin.
"Utility" refers to any electric generating utility allowed by law to earn a return on its investment.
(b) Upon the request of a utility that began construction after October 1, 1985, and before March 31, 2002, of qualified pollution control property that is to be used and useful for the public convenience, the commission shall for ratemaking purposes add to the value of that utility's property the value of the qualified pollution control property under construction, but only if at the time of the application and thereafter:
(1) the facility burns only Indiana coal as its primary fuel source once the air pollution control device is fully operational; or
(2) the utility can prove to the commission that the utility is justified because of economic considerations or governmental requirements in utilizing some non-Indiana coal.
(c) The commission shall adopt rules under IC 4-22-2 to implement this section.
that meets applicable state or federal requirements.
(d) As used in this section, "utility" refers to any energy generating utility allowed by law to earn a return on its investment.
(e) Upon the request of a utility that begins construction after March 31, 2002, of qualified pollution control property that is to be used and useful for the public convenience, the commission shall for ratemaking purposes add to the value of that utility's property the value of the qualified pollution control property under construction.
(f) The commission shall adopt rules under IC 4-22-2 to implement this section.
enactment of the federal Clean Air Act Amendments of 1990
Page 26, line 14, delete "(3) The" and insert " (4) Except for a facility that is a clean coal and energy project under section 2(2) of this chapter, the".
Page 26, between lines 35 and 36, begin a new line block indented and insert:
" (7) Fuel cells.
(8) Energy from waste to energy facilities producing steam not used for the production of electricity.".
Page 26, line 36, delete "The" and insert " Except for energy described in subsection (a)(8), the".
Page 27, line 3, delete "in the" and insert " reasonable and necessary:".
Page 27, delete line 4.
Page 27, line 20, after "section." insert " 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.".
Page 27, line 27, delete "eighty (180)" and insert " twenty (120)".
Page 27, line 34, delete "facilities, in place of the normal allowance for funds used" and insert " facilities.".
Page 27, delete line 35.
Page 28, line 11, after "and" delete "the" and insert " necessary.".
Page 28, delete line 12.
Page 28, line 17, delete "in the public interest." and insert " necessary.".
Page 28, line 41, delete "If any part of this chapter is found to be unlawful, the" and insert " The".
Page 28, line 42, delete "shall annually" and insert " may".
Page 29, line 1, delete "be:" and insert " comply".
Page 29, delete line 2.
Page 29, line 3, delete "(2) consistent".
Page 29, line 3, delete "findings in the".
Page 29, run in lines 1 through 3.
Page 29, line 4, after "chapter." insert " 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.".
Page 29, delete lines 5 through 27.
Renumber all SECTIONS consecutively.
(Reference is to ESB 29 as reprinted February 26, 2002.)
Senator WeatherwaxRepresentative Stilwell
Senator HumeRepresentative Lutz J
Senate Conferees House Conferees