Citations Affected: IC 8-1-2; IC 8-1-8.9.
Effective: Upon passage; July 1, 2007.
January 23, 2007, read first time and referred to Committee on Utilities & Regulatory
Affairs.
an
electric or gas utility may not exceed one-sixth of the estimated
annual cost of the utility service to be provided to the customer. Allows
a utility to impose a reasonable and just charge for the connection or
reconnection of a customer's utility service. Provides that the charge
may not exceed the utility's actual costs of connecting or reconnecting
the service. Requires the IURC to amend certain rules governing: (1)
customer deposits and connection and reconnection charges for electric
and gas utility service; and (2) the reporting of certain measurements
of an electric utility's system's reliability.
A BILL FOR AN ACT to amend the Indiana Code concerning
utilities and transportation.
electric nongenerating public, municipally owned, or cooperatively
owned utilities shall be examined by the utility consumer counselor not
less often than annually. At the time of a quarterly or annual
examination under this subsection, the utility consumer counselor
may also examine the books and records of any affiliated interest
from which an electric utility purchases fuel or electricity to
determine the reasonableness of the cost of the fuel or electricity
obtained by the utility. The utility consumer counselor shall provide
the commission with a report as to the examination of said books and
records within a reasonable time following said examination. The
utility consumer counselor may, if appropriate, request of the
commission a reduction or elimination of the fuel cost charge. Upon
such request, the commission shall hold a hearing forthwith in the
manner provided in sections 58, 59, and 60 of this chapter.
(d) An electric generating utility may apply for a change in its fuel
charge not more often than each three (3) months. When such
application is filed, the petitioning utility shall show to the commission
its cost of fuel to generate electricity and the cost of fuel included in the
cost of purchased electricity for the period between its last order from
the commission approving fuel costs in its basic rates and the latest
month for which actual fuel costs are available. The petitioning utility
shall also estimate its average fuel costs for the three (3) calendar
months subsequent to the expiration of the twenty (20) day period
allowed the commission in subsection (b). The commission shall
conduct a formal hearing solely on the fuel cost charge requested in the
petition subject to the notice requirements of IC 8-1-1-8 and shall grant
the electric utility the requested fuel cost charge if it finds that: the
commission makes the following determinations:
(1) The electric utility has made every reasonable effort to acquire
fuel and generate or purchase power or both so as to provide
electricity to its retail customers at the lowest fuel cost reasonably
possible.
(2) The actual increases in fuel cost through the latest month for
which actual fuel costs are available since the last order of the
commission approving basic rates and charges of the electric
utility have not been offset by any combination of the following:
(A) Actual decreases in the electric utility's other operating
expenses.
(B) Actual increases in the electric utility's revenues. In
ascribing revenue to the electric utility, the commission
may ignore any corporate distinction between the electric
utility and an affiliated interest from which the electric
utility purchases fuel or electricity. Accordingly, the
commission may consider any profits that:
(i) are received by an affiliated interest of the electric
utility from the sale of fuel or electricity to the electric
utility; and
(ii) result in the affiliated interest earning a rate of
return that exceeds the rate of return authorized by the
commission for the electric utility in the last proceeding
in which the basic rates and charges of the electric utility
were approved;
to be revenues of the electric utility.
(3) The fuel adjustment charge applied for will not result in the
electric utility earning a return in excess of the return authorized
by the commission in the last proceeding in which the basic rates
and charges of the electric utility were approved. However,
subject to section 42.3 of this chapter, if the fuel charge applied
for will result in the electric utility earning a return in excess of
the return authorized by the commission in the last proceeding in
which basic rates and charges of the electric utility were
approved, the fuel charge applied for will be reduced to the point
where no such excess of return will be earned. and
(4) The utility's estimate of its prospective average fuel costs for
each such three (3) calendar months are reasonable after taking
into consideration:
(A) the actual fuel costs experienced by the utility during the
latest three (3) calendar months for which actual fuel costs are
available; and
(B) the estimated fuel costs for the same latest three (3)
calendar months for which actual fuel costs are available.
(e) Should the commission at any time determine that an emergency
exists that could result in an abnormal change in fuel costs, it may, in
order to protect the public from the adverse effects of such change,
suspend the provisions of subsection (d) as to the utility or utilities
affected by such an emergency and initiate such procedures as may be
necessary to protect both the public and the utility from harm. The
commission shall lift the suspension when it is satisfied the emergency
no longer exists.
(f) Any change in the fuel cost charge granted by the commission
under the provisions of this section shall be reflected in the rates
charged by the utility in the same manner as any other changes in rates
granted by the commission in a case approving the basic rates and
charges of the utility. However, the utility may file the change as a
separate amendment to its rate schedules with a reasonable reference
therein that such charge is applicable to all of its filed rate schedules.
(g) No schedule of rates, tolls, and charges of a public, municipally
owned, or cooperatively owned gas utility that includes or authorizes
any changes in charges based upon gas costs is effective without the
approval of the commission except those rates, tolls, and charges
contained in schedules that contain specific provisions for changes in
gas costs or the cost of gas that have previously been approved by the
commission. Gas costs or cost of gas may include the gas utility's costs
for gas purchased by it from pipeline suppliers, costs incurred for
leased gas storage and related transportation, costs for supplemental
and substitute gas supplies, costs incurred for exploration and
development of its own sources of gas supplies, and other expenses
relating to gas costs as shall be approved by the commission. Changes
in a gas utility's rates, tolls, and charges based upon changes in its gas
costs shall be made in accordance with the following provisions:
(1) Before the commission approves any changes in the schedule
of rates, tolls, and charges of a gas utility based upon the cost of
the gas, the utility consumer counselor may examine the books
and records of the public, municipally owned, or cooperatively
owned gas utility to determine the cost of gas upon which the
proposed changes are based. The utility consumer counselor or
any party to or intervenor in the hearing required under
subdivision (3) may also examine the books and records of any
affiliated interest from which the gas utility purchases gas to
determine the reasonableness of the cost of gas on which the
proposed charges are based. In addition, before such an
adjustment to the gas cost charge becomes effective, the
commission shall hold a summary hearing on the sole issue of the
gas cost adjustment. The utility consumer counselor shall conduct
his a review and make a report to the commission within thirty
(30) days after the utility's request for the gas cost adjustment is
filed. The commission shall hold the summary hearing and issue
its order within thirty (30) days after it receives the utility
consumer counselor's report. The provisions of this section and
sections 39, 43, 54, 55, 56, 59, 60, and 61 of this chapter
concerning the filing, printing, and changing of rate schedules and
the time required for giving notice of hearing and requiring
publication of notice do not apply to such a gas cost adjustment
or such a summary hearing.
(2) Regardless of the pendency of any request for a gas cost
adjustment by any gas utility, the books and records pertaining to
cost of gas of all public, municipally owned, or cooperatively
owned gas utilities shall be examined by the utility consumer
counselor not less often than annually. At the time of an annual
examination under this subdivision, the utility consumer
counselor may also examine the books and records of any
affiliated interest from which a gas utility purchases gas to
determine the reasonableness of the cost of the gas obtained
by the utility. The utility consumer counselor shall provide the
commission with a report as to the examination of said books and
records within a reasonable time following said examination. The
utility consumer counselor may, if appropriate, request of the
commission a reduction or elimination of the gas cost adjustment.
Upon such request, the commission shall hold a hearing forthwith
in the manner provided in sections 58, 59, and 60 of this chapter.
(3) A gas utility may apply for a change in its gas cost charge not
more often than each three (3) months. When such application is
filed, the petitioning utility shall show to the commission its cost
of gas for the period between its last order from the commission
approving gas costs in its basic rates and the latest month for
which actual gas costs are available. The petitioning utility shall
also estimate its average gas costs for a recovery period of not less
than the three (3) calendar months subsequent to the expiration of
the thirty (30) day period allowed the commission in subdivision
(1). The commission shall conduct a summary hearing solely on
the gas cost adjustment requested in the petition subject to the
notice requirements of IC 8-1-1-8 and may grant the gas utility the
requested gas cost charge if it finds that: the commission makes
the following determinations:
(A) The gas utility has made every reasonable effort to acquire
long term gas supplies so as to provide gas to its retail
customers at the lowest gas cost reasonably possible.
(B) The pipeline supplier or suppliers of the gas utility, has or
any affiliated interests of the gas utility from which the gas
utility purchases gas, have requested or has have filed for a
change in the costs of gas pursuant to the jurisdiction and
procedures of a duly constituted regulatory authority.
(C) The actual increases in gas costs (through the latest
month for which actual gas costs are available) since the
last order of the commission approving basic rates and
charges of the gas utility have not been offset by actual
decreases in the gas utility's other operating expenses or
actual increases in the gas utility's revenues, or both. In
ascribing revenue to the gas utility, the commission may
ignore any corporate distinction between the gas utility
and an affiliated interest from which the gas utility
purchases gas. Accordingly, the commission may consider
any profits that:
(i) are received by an affiliated interest of the gas utility
from the sale of gas to the gas utility; and
(ii) result in the affiliated interest earning a rate of
return that exceeds the rate of return authorized by the
commission for the gas utility in the last proceeding in
which the basic rates and charges of the gas utility were
approved;
to be revenues of the gas utility.
(C) (D) The gas cost adjustment applied for will not result, in
the case of a public utility, in its earning a return in excess of
the return authorized by the commission in the last proceeding
in which the basic rates and charges of the public utility were
approved. However, subject to section 42.3 of this chapter, if
the gas cost adjustment applied for will result in the public
utility earning a return in excess of the return authorized by the
commission in the last proceeding in which basic rates and
charges of the gas utility were approved, the gas cost
adjustment applied for will be reduced to the point where no
such excess of return will be earned. and
(D) (E) The utility's estimate of its prospective average gas
costs for each such future recovery period is reasonable and
gives effect to:
(i) the actual gas costs experienced by the utility during the
latest recovery period for which actual gas costs are
available; and
(ii) the actual gas costs recovered by the adjustment of the
same recovery period.
(4) Should the commission at any time determine that an
emergency exists that could result in an abnormal change in gas
costs, it may, in order to protect the public or the utility from the
adverse effects of such change, suspend the provisions of
subdivision (3) as to the utility or utilities affected by such an
emergency and initiate such procedures as may be necessary to
protect both the public and the utility from harm. The commission
shall lift the suspension when it is satisfied the emergency no
longer exists.
(5) Any change in the gas cost charge granted by the commission
under the provisions of this section shall be reflected in the rates
charged by the utility in the same manner as any other changes in
rates granted by the commission in a case approving the basic
rates and charges of the utility. However, the utility may file the
change as a separate amendment to its rate schedules with a
reasonable reference therein that such charge is applicable to all
of its filed rate schedules.
(h) As used in this section, "affiliated interest" has the meaning
set forth in section 49(c) of this chapter.
inquire into the management of the business of all public utilities, and
shall keep itself informed as to the manner and method in which the
same is conducted and shall have the right to obtain from any public
utility all necessary information to enable the commission to perform
its duties. If, in its inquiry into the management of any public utility,
the commission finds that the amount paid for the services of its
officers, employees, or any of them, is excessive, or that the number of
officers or persons employed by such utility is not justified by the
actual needs of the utility, or that any other item of expense is being
incurred by the utility which is either unnecessary or excessive, the
commission shall designate such item or items, and such item or items
so designated, or such parts thereof as the commission may deem
unnecessary or excessive, shall not be taken into consideration in
determining and fixing the rates which such utility is permitted to
charge for the service which it renders.
(b) For purposes of IC 8-1-2, IC 8-1-8.5, IC 8-1-8.7, IC 8-1-8.8, and
IC 8-1-27, wages paid to an independent contractor of a utility for
construction or maintenance performed for the utility shall not be found
to be excessive merely because the wages are those normally paid for
work of the same type and quality in the labor market in which the
work for the utility is being performed.
(c) Subject to section 48.3 of this chapter, in carrying out its duties
and powers under subsection (a) with regard to any utility which sells
or generates electricity, the commission may also inquire into or audit
a utility's powerplant efficiency and system reliability.
following:
(1) A public utility engaged in producing, transmitting,
delivering, or furnishing heat, light, or power.
(2) A public utility owned or held in trust by a consolidated
city under IC 8-1-11.1.
The term does not include a communications service provider (as
defined in IC 8-1-2.6-13), except to the extent that the
communications service provider engages in any of the activities
described in subdivision (1).
(c) As used in this section, "resources" includes any of the
following available to a public utility in operating the public
utility's business:
(1) Advertising.
(2) Billing and mailing systems.
(3) Customer and marketing information.
(4) Personnel.
(5) Office equipment.
(6) Office space.
(7) Supplies.
(8) Tools.
(9) Training.
(10) Trucks.
(11) Use of the public utility's name.
(d) As used in this section, "subsidy" means the giving by a
public utility:
(1) to an affiliate; or
(2) for the benefit of an unregulated activity of the public
utility;
an advantage or preference with respect to the public utility's
resources.
(e) A public utility subject to the commission's jurisdiction may
not provide a subsidy with respect to a product or service offered
or provided to the public by the public utility if the product or
service is:
(1) offered or provided in the public utility's assigned service
area; and
(2) not subject to the commission's jurisdiction.
(f) A person who suffers a pecuniary loss from a violation of this
section may file a complaint with the commission. The commission
shall investigate the complaint as the commission considers
appropriate. After notice and hearing, the commission may use any
powers it has under this title to remedy a violation of this section,
including ordering the public utility to immediately cease any
activity the commission finds to be in violation of this section.
(g) Notwithstanding subsection (f), a person who suffers a
pecuniary loss from a violation of this section may file a civil action
in an Indiana court having jurisdiction. If the court finds that the
person has suffered a pecuniary loss, the court may do the
following:
(1) Grant appropriate injunctive relief.
(2) Award appropriate damages.
A person who files a civil action under this subsection is not
required to exhaust administrative remedies.
or corporation is otherwise subject to the jurisdiction of the
commission or such person or corporation shall has not have had
transactions or dealings other than the holding of stock and the receipt
of dividends thereon with such the utility corporation during the for at
least two (2) year period next preceding. years.
(d) Except as provided in subsection (e), no management,
construction, engineering, or similar contract made after March 8,
1933, with any affiliated interest, as defined in this section, shall be
effective unless it shall first have been filed with the commission. If it
be found that any such contract is not in the public interest, the
commission, after investigation and a hearing, is hereby authorized to
disapprove such contract.
(e) This subsection applies to an electric utility or a gas utility.
A management contract, construction contract, engineering
contract, or similar contract made by a utility after May 15, 2007,
with any affiliated interest is not effective unless it is first filed with
the commission and is found by the commission, after investigation
and a hearing, to be in the public interest and the result of a good
faith transaction, consistent with arm's length negotiations,
between the utility and the affiliated interest.
(3) (f) Every annual report of any utility corporation reporting under
this chapter to the commission shall contain, in addition to any other
information required to be included by or pursuant to law, the
following information:
(a) (1) It shall state the name and address of, and the number of
shares held by, each holder of one percent (1%) or more of the
voting capital stock of the reporting corporation, according to its
records.
(b) (2) Where one percent (1%) or more of the voting capital
stock of the reporting corporation is held by a trustee or trustees,
or other intermediate agency, for the beneficial interest of an
owner or owners, other than the holder of record, or where one
percent (1%) or more of the voting capital stock of the reporting
corporation is held by another corporation, such annual report
shall state, if the information is available from the records of the
reporting corporation, the name and addresses and respective
interests of such beneficial owners, and the names and addresses
of the officers and directors of any such other corporation and the
total number of shares of capital stock thereof held by each,
showing separately the number of shares of the voting capital
stock, and the names and addresses and respective stockholdings
of every stockholder of such other corporation holding one
percent (1%) or more of its voting capital stock. Such report shall
be accompanied by a certified copy of each trust agreement or
other instrument under which any voting capital stock of the
reporting corporation is held.
Where the information specified in subsection (3)(b) subdivision (2)
is not available from the records of the reporting corporation, any such
holder of record of one percent (1%) or more of the voting capital stock
of the reporting corporation, if ordered so to do by the commission,
shall file with the commission a sworn statement, in such form and to
be filed within such time as the commission shall prescribe, setting
forth whether or not any of such stock held by him or it the holder of
record is so held for the beneficial ownership of any person, firm,
limited liability company, or corporation other than the record holder
thereof, and, if stated to be so held, the names, addresses, and
respective interests of such beneficial owners. If such stockholder is a
trustee, he or it the stockholder also shall file with such statement a
certified copy of the trust agreement or other instrument under which
such stock is held. A corporation which is the holder, of record, of one
percent (1%) or more of the voting capital stock of the reporting
corporation, if ordered so to do by the commission, and regardless of
whether the information is or is not available or apparently available
from the records of the reporting corporation, also shall file with the
commission a sworn statement, in such form and to be filed within such
time as the commission shall prescribe, or shall include in the sworn
statement, if any, required to be filed by it pursuant to other provisions
of this chapter, a statement setting forth the names and addresses of its
officers and directors and the total number of shares of its capital stock,
held by each, showing separately the number of shares of the voting
capital stock, and the names and addresses and respective
stockholdings of each stockholder thereof holding one percent (1%) or
more of its voting capital stock.
(4) (g) If the annual report, or the sworn statements provided for in
this section, do not furnish the information desired, because of any
chain of successive ownership or of stockholdings, or because of an
intermediate agency or agencies, or for any other reason, the
commission, by order, may require similar sworn statements from any
person or corporation who or which can give the necessary information,
as the commission may have discovered from its investigations, to the
end that the commission may obtain a complete disclosure of the
natural persons, firms, limited liability companies, or corporations and
their respective interests, who or which own or control directly or
indirectly one percent (1%) or more of the voting capital stock of the
reporting corporation.
(h) The commission may adopt rules under IC 4-22-2 to regulate
transactions, other than ownership of stock and receipt of
dividends on that stock, between an electric utility or gas utility
under the jurisdiction of the commission and an affiliated interest
of the electric utility or gas utility.
two (2) consecutive months;
(B) the customer has been mailed disconnect notices for
any three (3) months within the most recent twelve (12)
month period; or
(C) the utility service to the customer has been
disconnected within the most recent two (2) year period.
(b) Except as provided in subsections (c) and (d), the amount of
a deposit allowed under subsection (a) may not exceed one-sixth
(1/6) of the estimated annual cost of the utility service to be
provided to the applicant or customer. The limit described in this
subsection applies regardless of:
(1) the number of customers served by the utility or an
affiliate of the utility; or
(2) whether the utility provides electric utility service or
natural gas utility service, or both.
(c) If a customer has contracted for a budget billing plan, the
amount of the deposit allowed under subsection (a) may not exceed
the equivalent of two (2) monthly budget billing payments.
(d) Subject to the limits set forth in subsections (b) and (c), at
any time after utility service is provided, an initial deposit made by
an applicant is subject to reevaluation upon the request of either
the utility or the applicant, based on actual charges for utility
services rendered.
Sec. 8. (a) This section applies to a deposit held by a utility for
more than thirty (30) days, regardless of:
(1) the number of customers served by the utility; or
(2) the customer class of the customer making the deposit.
(b) A deposit to which this section applies shall earn interest, at
a rate determined by the commission under subsection (c), from
the date the deposit is paid in full by the customer.
(c) Not later than December 1 of each year, the commission shall
issue an order establishing the interest rate that shall be paid on all
deposits held for at least the period described in subsection (a)
during all or part of the subsequent calendar year.
Sec. 9. (a) This section applies to deposit made by a customer
described in section 4(3) of this chapter.
(b) The commission shall adopt rules under IC 4-22-2
establishing the terms and conditions under which a deposit, and
any interest earned on the deposit, shall be refunded to the
customer. The terms and conditions established by the commission
under this section may not be less favorable to the customer than
the terms and conditions that apply to a refund made to a customer
described in section 4(1) of this chapter.
Sec. 10. (a) To the extent that they conflict with this chapter, the
following are void:
(1) 170 IAC 4-1-15.
(2) 170 IAC 5-1-15.
(3) Any other rule:
(A) adopted by the commission; and
(B) governing deposits charged by a utility to an applicant
or a customer as a condition for receiving utility service.
(b) The commission shall adopt rules under IC 4-22-2 to amend
the rules described in subsection (a) to the extent necessary to
make the rules conform to the requirements of this chapter.
Sec. 11. (a) Except as provided in subsection (b), a utility may
impose a reasonable and just charge for the connection or
reconnection of a customer's utility service. A charge imposed
under this section may not exceed the costs actually incurred by the
utility in connecting or reconnecting service, whichever applies.
(b) If a utility disconnects a customer's utility service in
violation of any:
(1) law; or
(2) rule adopted by the commission;
the utility shall immediately reconnect the customer's utility
service at no charge to the customer.
(c) If a customer of a utility has:
(1) paid:
(A) any deposit lawfully imposed by the utility under
section 7 of this chapter; or
(B) part of a deposit lawfully imposed by the utility under
section 7 of this chapter, as agreed to by the customer and
the utility;
(2) paid:
(A) any connection or reconnection fee lawfully imposed by
the utility under this section; or
(B) part of a connection or reconnection fee lawfully
imposed by the utility under this section; and
(3) otherwise complied with any lawfully imposed rules or
requirements of the utility;
the utility must connect or reconnect a customer's utility service as
soon as reasonably possible, but in no case later than one (1)
business day after the utility is requested to connect or reconnect
the customer's utility service.
(d) To the extent that they conflict with this chapter, the
following are void:
(1) 170 IAC 4-1-16.
(2) 170 IAC 5-1-16.
(3) Any other rule:
(A) adopted by the commission; and
(B) governing connection or reconnection charges imposed
by a utility.
The commission shall adopt rules under IC 4-22-2 to amend the
rules described in this subsection to the extent necessary to make
the rules conform to the requirements of this section.