Citations Affected:
IC 8-1-2-42
;
IC 8-1-2-49.
Synopsis: Affiliated interests of regulated utilities. Gives the Indiana
utility regulatory commission (IURC) jurisdiction over an affiliated
interest of a regulated utility to the extent of: (1) providing the IURC
access to the affiliated interest's accounts and records, any part of
which may apply to any transaction between the utility and the
affiliated interest; and (2) requiring the affiliated interest to submit to
the IURC any reports required by the IURC. Provides that in a case in
which a utility requests a change in its rates based on the utility's costs
for fuel, the utility consumer counselor may examine the books and
records of any affiliated interest from which the utility purchases fuel
to determine the price paid by the utility for the fuel. Provides that at
the time of a quarterly or an annual examination of the books and
records of a utility, the utility consumer counselor may also examine
the books and records of any affiliated interest from which the utility
purchases fuel to determine the price paid by the utility for the fuel.
Provides that, in ratemaking cases based on fuel costs, profits: (1)
received by an affiliated interest of a utility from the sale of fuel to the
utility; and (2) resulting in a rate of return for the affiliated interest that
is greater than that approved for the utility; are considered revenues of
the utility.
Effective: Upon passage.
January 22, 2001, read first time and referred to Committee on Commerce and Consumer
Affairs.
A BILL FOR AN ACT to amend the Indiana Code concerning
utilities and transportation.
SECTION 1.
IC 8-1-2-42
IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 42. (a) No change shall be
made in any schedule, including schedules of joint rates, except upon
thirty (30) days notice to the commission and approval by the
commission, and all such changes shall be plainly indicated upon
existing schedules or by filing new schedules in lieu thereof thirty (30)
days prior to the time the same are to take effect. The commission may
prescribe a shorter time within which a change may be made. A public,
municipally owned, or cooperatively owned utility may not file a
request for a general increase in its basic rates and charges within
fifteen (15) months after the filing date of its most recent request for a
general increase in its basic rates and charges, except that the
commission may order a more timely increase if:
(1) the requested increase relates to a different type of utility
service;
(2) the commission finds that the utility's financial integrity or
service reliability is threatened; or
examination under this subsection, and to the extent permitted
under section 49 of this chapter, 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 price paid by the utility for the fuel or electricity.
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 either of the following:
(A) Actual decreases in the electric utility's other operating
expenses.
(B) Actual increases in the electric utility's revenues. 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;
are considered 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 or from affiliated
interests of the gas utility, 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. To the extent permitted under
section 49 of this chapter, the utility consumer counselor may
also examine the books and records of any affiliated interest
from which the gas utility purchases gas to determine the
price paid by the gas utility for the gas. 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 subsection, and to the extent
permitted under section 49 of this chapter, 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 price paid by the utility for the gas. 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, or any
affiliated interests of the gas utility from which the gas
utility purchases gas, has 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. 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;
are considered revenues of the gas utility.
(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.
SECTION 2.
IC 8-1-2-49
IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 49. (1) (a) The commission, or
any commissioner when authorized by the commission, or any person
or persons employed by the commission for that purpose shall upon
demand have the right to inspect the books, accounts, papers, records,
and memoranda of any public utility and to examine, under oath, any
officer, agent, or employee of such public utility in relation to its
business and affairs. Any person other than one of said commissioners
who shall make such demand shall produce his the person's authority
to make such inspection. The commission shall have jurisdiction over
holders of the voting capital stock of all public utility companies under
its jurisdiction to such extent as may be necessary to enable the
commission to require the disclosure of the identity in respective
interests of every owner of any substantial interest in such voting
capital stock. One percent (1%) or more is a substantial interest, within
the meaning of this section.
(2) Said (b) The commission shall have jurisdiction over an
affiliated interests interest having transactions, other than ownership
of stock and receipt of dividends thereon, with a utility corporations
and corporation or other utility companies company under the
jurisdiction of the commission, to the extent of access to all of the
affiliated interest's accounts and records, of joint or general expenses,
any portion of which may be applicable to such transactions, apply to
any transaction between the utility corporation or utility company
and the affiliated interest, and to the extent of authority to require
such reports to be submitted by such the affiliated interests interest as
the commission may prescribe. For the purpose of this section only,
"affiliated interests" include the following:
(a) (1) Every corporation and person owning or holding directly
or indirectly ten percent (10%) or more of the voting capital stock
of such utility corporation.
(b) (2) Every corporation and person in any chain of successive
ownership of ten percent (10%) or more of voting capital stock.
(c) (3) Every corporation ten percent (10%) or more of whose
voting capital stock is owned by any person or corporation
owning ten percent (10%) or more of the voting capital stock of
such utility corporation or by any person or corporation in any
such chain of successive ownership of ten percent (10%) or more
of voting capital stock.
(d) (4) Every person who is an officer or director of such utility
corporation or of any corporation in any chain of successive
ownership of ten percent (10%) or more of voting capital stock.
(e) (5) Every corporation which has one (1) or more officers or
one (1) or more directors in common with such utility corporation.
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) (c)(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 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 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) (d) 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.
SECTION 3. An emergency is declared for this act.