Citations Affected: IC 8-1.3.
Synopsis: Sustainable energy. Requires the governor to request, on
behalf of the state, the establishment of a private, nonprofit corporation
to be known as the sustainable energy corporation to: (1) ensure that all
electric and gas ratepayers are given the opportunity to participate in
and benefit from a comprehensive set of sustainable energy programs
and initiatives designed to overcome barriers to implementation; and
(2) promote and implement sustainable energy technologies and
measures. Establishes the sustainable energy fund to make loans and
award grants to implement sustainable energy programs. Requires an
electric distribution company and a gas distribution company to impose
a monthly surcharge on their retail customers for deposit in the fund
beginning September 1, 2002. Allows an electric distribution company
and a gas distribution company to file a rate case with the utility
regulatory commission to recover lost revenue due to sustainable
energy programs initiated by the corporation.
Effective: Upon passage.
January 7, 2003, read first time and referred to Committee on Rules and Legislative
A BILL FOR AN ACT to amend the Indiana Code concerning
SECTION 1. IC 8-1.3 IS ADDED TO THE INDIANA CODE AS A
NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE UPON
ARTICLE 1.3. SUSTAINABLE ENERGY
Chapter 1. Definitions
Sec. 1. The definitions in this chapter apply throughout this article.
Sec. 2. "Biomass" means any of the following:
(1) Closed loop biomass.
(2) Nonhazardous cellulosic waste material that:
(A) does not contain painted, treated, or pressurized wood or wood contaminated with plastics or metals;
(B) is segregated from other waste materials; and
(C) is derived from forest related resources, including:
(i) mill residues;
(ii) precommercial thinnings;
(iii) slash; and
(iv) brush, except old growth timber, black liquor, and materials from national forests, unless the materials are in the form of paper mill waste.
(3) Waste pallets, crates, dunnage, and landscape or right-of-way trimmings, except municipal solid waste, post consumer wastepaper, construction debris, and demolition debris.
(4) Agricultural byproducts, including byproducts from:
(E) sugar; and
(F) other crops.
(5) Gases from municipal wastewater.
Sec. 3. "Central station facility" means:
(2) intermediate; or
electric power generating facilities that are used to generate electricity primarily for the wholesale or retail electric markets.
Sec. 4. "Closed loop biomass" means organic material from a plant that is planted exclusively for purposes of being used at a facility to produce electricity.
Sec. 5. "Commission" refers to the Indiana utility regulatory commission established by IC 8-1-1-2.
Sec. 6. "Corporation" refers to the sustainable energy corporation established by IC 8-1.3-2-1.
Sec. 7. (a) "Distributed energy resource" means:
(1) end use energy efficiency improvement; or
(2) electricity produced from:
(A) renewable energy resources;
(C) internal combustion engines;
(D) Stirling engines;
(E) combined heat and power systems; or
(F) district energy systems;
that primarily serves a customer's load.
(b) The term does not include the following:
(1) A central station facility.
(2) Electric power generators that use:
(A) diesel fuel;
(B) fuel oil;
(D) nuclear fuel; or
Sec. 8. "Electric distribution company" means a corporation, a company, a partnership, a limited liability company, an individual, an association of individuals or their lessees, trustees, or receivers appointed by a court that distribute electric power to retail customers.
Sec. 9. (a) "End use energy efficiency improvement" means the use or installation of a device, method, or project that reduces electrical or natural gas energy usage.
(b) The term includes the following:
(1) Home weatherization.
(2) Appliance efficiency modifications or replacements.
(3) Commercial motor efficiency modifications or replacements.
(4) Residential or commercial lighting efficiency or modifications.
(5) Systems to turn off or vary the delivery of energy, including thermostats or lighting control.
(6) Building design with the purpose of achieving end use energy reductions.
Sec. 10. "Fund" refers to the sustainable energy fund established by IC 8-1.3-4-1.
Sec. 11. "Gas distribution company" means a corporation, a company, a partnership, a limited liability company, an individual, an association of individuals, their lessees, trustees, or receivers appointed by a court that distribute natural gas to retail customers.
Sec. 12. "Renewable energy" means energy derived from any of the following sources:
(1) Solar photovoltaic and solar thermal energy.
(3) Fuel cells.
(4) Geothermal energy conversion, except end use grid dependent technologies, including geothermal heat pumps.
Sec. 13. "Sustainable energy" means:
(1) renewable energy; or
(2) distributed energy resource.
Chapter 2. Sustainable Energy Corporation
Sec. 1. (a) The governor shall request, on behalf of the state, the
establishment of a private, nonprofit corporation called the
sustainable energy corporation.
(b) The corporation shall do the following:
(1) Ensure that all Indiana electric and gas ratepayers are given the opportunity to participate in and benefit from a comprehensive set of sustainable energy programs and initiatives designed to overcome barriers to implementation.
(2) Promote and implement sustainable energy technologies and measures in Indiana.
(3) Carry out the purposes of this article.
(c) Before the corporation may begin operation, the governor must conduct a public hearing for the purpose of giving all interested parties an opportunity to review and comment upon the articles of incorporation, bylaws, and methods of operation of the corporation. Notice of the hearing must be given at least fourteen (14) days before the hearing in accordance with IC 5-14-1.5-5 (b).
Sec. 2. (a) The board of directors of the corporation is composed of sixteen (16) voting members as follows:
(1) The lieutenant governor or the lieutenant governor's designee.
(2) The chairman of the commission or the chairman's designee.
(3) The utility consumer counselor or the utility consumer counselor's designee.
(4) Thirteen (13) members appointed by the governor as follows:
(A) Two (2) representatives of public or private universities in Indiana.
(B) Two (2) representatives of statewide investor owned utility organizations.
(C) One (1) representative of statewide municipal utility organizations.
(D) One (1) representative of statewide rural electric cooperative organizations.
(E) One (1) representative of statewide industrial organizations.
(F) One (1) representative of statewide commercial organizations.
(G) One (1) representative of statewide business organizations that represent energy service companies.
(H) One (1) representative of statewide consumer organizations that represent residential ratepayers.
replacing or remodeling existing equipment and facilities.
(3) Programs to assist and train energy auditors.
(4) Programs to assist commercial and industrial energy consumers in taking advantage of opportunities to gain energy savings through incremental investments during construction of new facilities.
(5) Programs to allow eligible commercial and industrial customers, subject to criteria developed by the corporation, to implement end use efficiency measures on their own premises and receive partial refunds of their contributions to the fund.
(6) Programs that use a combination of cash incentives, energy ratings, technical assistance, education, direct installation or efficiency measures, energy efficient mortgages, and strategic partnerships to introduce high efficiency technologies and building practices into Indiana.
(7) Programs that target low income families and that build on Indiana's weatherization program for single family homes and provide technical assistance, education, and direct installation of measures for multiple family units.
(8) Programs to transform the market for end use energy efficiency improvements both in terms of the mix of products and consumer choices through a combination of incentive programs, marketing, and coordination with vendors and market participants, including high efficiency residential lighting products and home appliances.
(9) Programs to provide incentives to or engage in research and activities that support new end use energy efficiency or renewable energy technologies and applications.
(10) Programs and initiatives developed by other organizations and parties that contribute to fulfilling the corporation's mission and requirements under this article.
(11) Programs to analyze and evaluate the need for changes to building codes in Indiana in terms of energy efficiencies and savings benefits.
(12) Initiatives to promote the use of renewable resources by Indiana consumers and businesses.
(13) Initiatives to promote the development of renewable energy resources and businesses in Indiana.
(14) Initiatives to improve reliability of the electric transmission and distribution systems through the use of distributed energy resources.
money in the fund.
(d) The treasurer of state shall invest the money in the fund not currently needed to meet the obligations of the fund in the same manner as other public money may be invested. Interest that accrues from these investments shall be deposited in the fund.
(e) Money in the fund at the end of a state fiscal year does not revert to the state general fund.
Sec. 2. (a) Beginning September 1, 2003, the commission shall require an electric distribution company to impose a monthly surcharge on its retail customers for deposit in the fund.
(b) The monthly surcharge imposed by an electric distribution company under subsection (a) may not be more than three hundredths of a cent ($0.0003) per kilowatt hour of electricity consumed by the company's retail customers.
(c) The commission may impose separate charges on retail customers of electric distribution companies based on the electricity consumption of each customer class.
Sec. 3. (a) Beginning September 1, 2003, the commission shall require a gas distribution company to impose a monthly surcharge on its retail customers for deposit in the fund.
(b) The monthly surcharge imposed by a gas distribution company under subsection (a) may not be more than thirty cents ($0.30) for each decatherm of natural gas consumed by the company's retail customers.
(c) The commission may impose separate charges on retail customers of gas distribution companies based on the gas consumption of each customer class.
Sec. 4. The money collected by a gas distribution company or an electric distribution company in surcharges under this chapter is exempt from all state income taxes and all fees imposed by IC 8-1-6.
Sec. 5. An electric distribution company or a gas distribution company that collects a surcharge under this chapter shall deposit monthly the amount collected for the surcharge in the fund.
Sec. 6. (a) The board of directors of the corporation may:
(1) make loans and award grants to persons to implement this article; and
(2) pay the expenses of administering this article;
from money in the fund.
(b) Before the board uses money in the fund under subsection (a):
(1) an authorized officer of the corporation must execute a
document in which the corporation agrees to meet the
requirements of this article; and
(2) a copy of the document described in subdivision (1) must be delivered to each electric distribution company and gas distribution company that collects a surcharge required by this chapter.
Chapter 5. Recovery of Lost Revenue
Sec. 1. Until September 1, 2005, an electric distribution company or a gas distribution company may file a rate case with the commission to recover lost revenue due to programs initiated by the corporation under this article.
Sec. 2. An electric distribution company or a gas distribution company may present evidence in and argue the rate case filed under section 1 of this chapter concerning:
(1) the extent to which revenue erosion due to savings of programs initiated by the corporation has had an effect on the company's opportunity to earn its allowed return;
(2) the appropriateness of establishing a rate making method to ameliorate this effect; and
(3) a proposed rate making method to ameliorate this effect.
Sec. 3. The commission may conduct an investigation after September 1, 2005, to determine if it is appropriate and necessary for an electric distribution company or a gas distribution company to continue to collect lost revenue due to programs implemented by the corporation.
SECTION 2. An emergency is declared for this act.