HB 1824-2_ Filed 04/03/2007, 11:00 Hershman

SENATE MOTION


MADAM PRESIDENT:

    I move
that Engrossed House Bill 1824 be amended to read as follows:

SOURCE: Page 5, line 27; (07)MO182402.5. -->     Page 5, between lines 27 and 28, begin a new paragraph and insert:
SOURCE: IC 8-1-8.4; (07)MO182402.5. -->     "SECTION 5. IC 8-1-8.4 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]:
     Chapter 8.4. Electric Line Facilities Projects
    Sec. 1. As used in this chapter, "commission" refers to the Indiana utility regulatory commission created by IC 8-1-1-2.
    Sec. 2. As used in this chapter, "electric line facilities" means the following:
        (1) Overhead or underground electric transmission lines.
        (2) Overhead or underground electric distribution lines.
        (3) Electric substations.
        (4) Overhead or underground telecommunications line facilities associated with an item listed in subdivisions (1) through (3).
    Sec. 3. As used in this chapter, "electric line facilities project" means the construction, operation, maintenance, reconstruction, relocation, addition to, upgrading of, or removal of electric line facilities.
    Sec. 4. As used in this chapter, "electricity supplier" means a public utility that furnishes retail electric service to the public.
    Sec. 5. As used in this chapter, "public utility" has the meaning set forth in IC 8-1-2-1.
    Sec. 6. As used in this chapter, "regional transmission organization" refers to the regional transmission organization approved by the Federal Energy Regulatory Commission for the control area in which an electricity supplier operates electric line facilities.
    Sec. 7. The commission shall encourage electric line facilities projects by creating the following financial incentives for electric line facilities that are reasonable and necessary:
        (1) The timely recovery of costs incurred by an electricity supplier in an electric line facilities project.
        (2) The timely recovery of costs, by means of a periodic rate adjustment mechanism, incurred by an electricity supplier taking service under a tariff of, or being assessed costs by, a regional transmission organization.
    Sec. 8. (a) An electricity supplier must submit an application to the commission for approval of an electric line facilities project for which the electricity supplier seeks to receive a financial incentive created under section 7 of this chapter.
    (b) The commission shall prescribe the form for an application submitted under this section.
    (c) Upon receipt of an application under subsection (a), the commission shall review the application for completeness. The commission may request additional information from an applicant as needed.
    (d) The commission shall, after notice and hearing, issue a determination of an electric line facilities project's eligibility for the financial incentives described in section 7 of this chapter not later than one hundred eighty (180) days after the date of the application.
    (e) Subject to subsection (g), the commission shall approve an application by an electricity supplier for an electric line facilities project that is reasonable and necessary. An electric line facilities project is presumed to be reasonable and necessary if the electric line facilities project is consistent with, or part of, a plan developed by the regional transmission organization.
    (f) This section does not relieve an electricity supplier of the duty to obtain any certificate required under IC 8-1-8.5 or IC 8-1-8.7.
    (g) The commission shall not approve a financial incentive for that part of an electric line facilities project that exceeds the lesser of:
        (1) five percent (5%) of the electricity supplier's rate base approved by the commission in the electricity supplier's most recent general rate proceeding; or
        (2) one hundred million dollars ($100,000,000).
".
SOURCE: Page 12, line 3; (07)MO182402.12. -->     Page 12, between lines 3 and 4, begin a new paragraph and insert:
SOURCE: IC 8-1-35; (07)MO182402.12. -->     "SECTION 12. IC 8-1-35 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]:
     Chapter 35. Renewable Energy Development
    Sec. 1. As used in this chapter, "electricity supplier" means a public utility (as defined in IC 8-1-2-1) that furnishes retail electric service to the public. The term does not include a utility that is:
        (1) a municipally owned utility (as defined in IC 8-1-2-1(h));
        (2) a corporation organized under IC 8-1-13; or
        (3) a corporation organized under IC 23-17-1 that is an

electric cooperative and that has at least one (1) member that is a corporation organized under IC 8-1-13.
    Sec. 2. As used in this chapter, "fund" refers to the renewable energy resources fund established by section 8 of this chapter.
    Sec. 3. As used in this chapter, "regional transmission organization" refers to a regional transmission organization approved by the federal energy regulatory commission for the geographic area in which an electricity supplier's assigned service area (as defined in IC 8-1-2.3-2) is located.
    Sec. 4. As used in this chapter, "renewable energy credit", or "REC", means one (1) megawatt hour of electricity generated by renewable energy resources that is:
        (1) quantifiable; and
        (2) possessed by not more than one (1) entity at a time.
    Sec. 5. (a) As used in this chapter, "renewable energy resources" includes the following sources for the production or conservation of electricity:
        (1) Dedicated crops grown for energy production.
        (2) Methane systems that convert waste products, including animal, food, and plant waste, into electricity.
        (3) Methane recovered from landfills.
        (4) Wind.
        (5) Hydropower, other than hydropower involving the construction of new dams or the expansion of existing dams.
        (6) Solar photovoltaic cells and panels.
        (7) Fuel cells that directly convert chemical energy in a hydrogen rich fuel into electricity.
        (8) Sawmill waste, other than waste derived from virgin timber.
        (9) Agricultural crop waste.
        (10) Waste coal.
        (11) Clean coal and energy projects (as defined in IC 8-1-8.8-2).
        (12) Combined heat and power systems that:
            (A) use natural gas or renewable energy resources as feedstock; and
            (B) achieve at least seventy percent (70%) overall efficiency.
        (13) Demand side management or efficiency programs that reduce electricity consumption or implement load management or demand response technologies that shift electric load from periods of higher demand to periods of lower demand, including the following:
            (A) Home weatherization.
            (B) Appliance efficiency modifications and replacements.
            (C) Lighting efficiency modifications.
            (D) Heating and air conditioning modifications or replacements.


    (b) The term does not include energy from the incineration, burning, or heating of the following:
        (1) Tires.
        (2) Garbage.
        (3) General household, institutional, or commercial waste.
        (4) Industrial lunchroom or office waste.
        (5) Landscape waste.
        (6) Construction or demolition debris.
        (7) Feedstock that is municipal, food, plant, industrial, or animal waste from outside Indiana.
    Sec. 6. (a) Not later than the calendar year beginning January 1, 2016, at least four percent (4%) of the total electricity supplied by an electricity supplier to the electricity supplier's Indiana customers each calendar year shall be electricity generated from renewable energy resources. For purposes of this subsection, electricity is measured in megawatt hours.
    (b) An electricity supplier may use:
        (1) a renewable energy resource described in section 5(a)(10) of this chapter;
        (2) a renewable energy resource described in section 5(a)(11) of this chapter; or
        (3) a combination of renewable energy resources described in section 5(a)(10) and 5(a)(11) of this chapter;
to generate not more than twenty percent (20%) of the electricity that the electricity supplier is required to supply under subsection (a).
    (c) An electricity supplier may not use a renewable energy resource described in section 5(a)(12) of this chapter to generate more than ten percent (10%) of the electricity that the electricity supplier is required to supply under subsection (a).
    (d) An electricity supplier may use a renewable energy resource described in section 5(a)(13) of this chapter to supply not more than ten percent (10%) of the electricity that the electricity supplier is required to supply under subsection (a).
    (e) An electricity supplier may own or purchase RECs to comply with subsection (a).
    (f) If an electricity supplier exceeds the applicable percentage under subsection (a) in a compliance year, the electricity supplier may carry forward the amount of electricity that:
        (1) exceeds the applicable percentage under subsection (a); and
        (2) is generated by renewable energy resources in an Indiana facility;
to comply with the requirement under subsection (a) for either or both of the two (2) immediately succeeding compliance years.
    (g) An electricity supplier that fails to comply with subsection (a) shall deposit in the fund established by section 8 of this chapter an amount equal to:
        (1) the number of megawatt hours of electricity that the electricity supplier was required to but failed to supply under subsection (a); multiplied by
        (2) fifty dollars ($50).
    (h) An electricity supplier is not required to comply with subsection (a) if the commission determines that the electricity supplier has demonstrated that:
        (1) renewable energy resources or RECs are not available to the electricity supplier in sufficient quantities to allow the electricity supplier to comply with subsection (a); or
        (2) the cost of compliance with subsection (a) using the renewable energy resources available to the electricity supplier would result in an unreasonable increase in the basic rates and charges for electricity supplied to customers of the electricity supplier.
The commission shall conduct a public hearing to make a determination under this subsection.
    (i) If the commission determines under subsection (h) that adequate renewable energy resources are not available or that the cost of available renewable energy resources is not reasonable, the commission shall:
        (1) reduce or eliminate the affected electricity supplier's obligations under subsection (a) as appropriate; and
        (2) review its determination not more than twelve (12) months after the reduction or elimination under subdivision (1) takes effect.
    (j) The commission shall allow an electricity supplier to recover reasonable and necessary costs incurred in:
        (1) constructing, operating, or maintaining facilities to comply with this chapter; or
        (2) generating electricity from, or purchasing electricity generated from, a renewable energy resource;
by a periodic rate adjustment mechanism.
    Sec. 7. (a) For purposes of calculating RECs to determine an electricity supplier's compliance with section 6(a) of this chapter, the following apply:
        (1) Except as provided in subdivisions (2) through (4), one (1) megawatt hour of electricity generated by renewable energy resources in an Indiana facility equals one (1) REC.
        (2) One (1) megawatt hour of electricity generated by a renewable energy resource described in section 5(a)(2), 5(a)(3), 5(a)(4), or 5(a)(8) of this chapter that originates in Indiana equals one and three-tenths (1.3) RECs.
        (3) One (1) megawatt hour of electricity that is:
            (A) generated by a renewable energy resource in the territory of a regional transmission organization; and
            (B) imported into Indiana;
        equals five-tenths (0.5) REC.
        (4) One (1) megawatt hour of electricity that is generated by a renewable energy resource described in section 5(a)(12) of this chapter in Indiana equals five-tenths (0.5) REC.
    (b) Electricity generated by any source outside the territory of a regional transmission organization may not be considered for purposes of calculating an REC to determine an electricity supplier's compliance with section 6(a) of this chapter.
    (c) An electricity supplier may satisfy not more than ten percent (10%) of the electricity supplier's requirement under section 6(a) of this chapter by owning or purchasing RECs calculated under subsection (a)(4).
    (d) An electricity supplier may not apportion all or part of a single megawatt of electricity among:
        (1) more than one (1) renewable energy resource; or
        (2) more than one (1) category set forth in subsection (a);
in order to comply with section 6(a) of this chapter.
    Sec. 8. (a) The renewable energy resources fund is established to:
        (1) support the development, construction, and use of renewable energy resources, including small scale renewable energy resources, in rural and urban Indiana; and
        (2) reimburse the Indiana economic development corporation and the commission for expenses incurred under section 9 of this chapter.
    (b) The fund consists of the following:
        (1) Money deposited under section 6(g) of this chapter.
        (2) Money from any other source that is deposited in the fund.
    (c) The Indiana economic development corporation shall administer the fund.
    (d) The expenses of administering the fund shall be paid from money in the fund.
    (e) 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.
    (f) Money in the fund at the end of a state fiscal year does not revert to the state general fund.
    Sec. 9. (a) This section applies if there is sufficient money in the fund established under section 8 of this chapter to reimburse the Indiana economic development corporation and the commission for expenses incurred under subsection (b).
    (b) The Indiana economic development corporation, in consultation with the commission, shall develop a strategy to attract renewable energy manufacturing facilities, including wind turbine component manufacturers, to Indiana.
    Sec. 10. Beginning in 2017, and not later than March 1 of each subsequent year, an electricity supplier shall file with the commission a report of the electricity supplier's compliance with

this chapter for the preceding calendar year.
    Sec. 11. The commission shall adopt rules under IC 4-22-2 to implement this chapter.

SOURCE: ; (07)MO182402.13. -->     SECTION 13. [EFFECTIVE JULY 1, 2007] Not later than April 1, 2018, the Indiana utility regulatory commission shall submit a report in an electronic format under IC 5-14-6 to the general assembly. A report submitted under this SECTION must include:
        (1) an analysis of; and
        (2) any legislative proposals the commission believes would increase;
the effectiveness of and industry compliance with IC 8-1-35, as added by this act.
".
    Renumber all SECTIONS consecutively.
    (Reference is to EHB 1824 as printed March 30, 2007.)

________________________________________

Senator HERSHMAN


MO182402/DI 101
2007