Citations Affected: IC 8-1-2.3.
Synopsis: Revocation of assigned electric service area. Provides that
the utility regulatory commission may revoke the sole right of an
electricity supplier to furnish retail electric service to a designated area
if: (1) the electricity supplier furnishes service to a town; (2) a different
electricity supplier furnishes service to areas adjacent to the town; and
(3) a majority of electricity consumers in the town petition the
commission to determine that the electricity supplier that furnishes
service to the town does not have the sole right to do so.
Effective: July 1, 2006.
January 4, 2006, read first time and referred to Committee on Utilities and Energy.
A BILL FOR AN ACT to amend the Indiana Code concerning
utilities and transportation.
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 6. The boundaries of
the assigned service areas of electricity suppliers may not be changed
except under any one (1) of the following circumstances:
(1) If a municipality which owns and operates an electric utility
system furnishing retail electric service to the public annexes an
area beyond the assigned service area of its municipally owned
electric utility, the municipally owned electric utility may petition
the commission to change the assigned service area of the
municipally owned electric utility to include the annexed area,
according to the following procedures:
(A) The municipally owned electric utility shall file its petition
with the commission not later than sixty (60) days after the
annexation becomes effective. The petition must include a
certified copy of the annexation ordinance, which serves as
conclusive evidence that the area has been lawfully annexed
and is part of the municipality. After the filing of a petition
under this subdivision, the commission shall promptly enter an
order changing the assigned service area facet maps of the
municipally owned electric utility and incumbent electricity
suppliers to include the annexed area within the assigned
service area of the municipally owned electric utility and
giving the right to serve and immediate possession to the
municipally owned electric utility. The commission order is
enforceable in court pending an appeal of that order. An
appellant from a court order enforcing a commission order
under this subdivision is not entitled to a stay of the court
order pending appeal. However, this subdivision does not
apply to incorporations, consolidations, mergers, or
annexations that are under IC 36-4-3-4(a)(3), IC 36-4-3-4(b),
IC 36-4-3-4(h), or IC 36-4-3-4.1 or that are not contiguous
under IC 36-4-3-13(b) or IC 36-4-3-13(c).
(B) Not later than thirty (30) days after filing a petition under
this subdivision, the municipally owned electric utility shall
determine for each affected incumbent electricity supplier and
pay to that supplier an amount not less than the value of all the
electric utility property of the incumbent electricity supplier
that is devoted to furnishing retail electric service within the
additional assigned service area at its then reproduction cost
new depreciated value. In addition, the municipally owned
electric utility shall pay the incumbent electricity supplier
severance damages in an amount equal to:
(i) the value of the incumbent electricity supplier's
distribution and substation facilities dedicated to and located
within the annexed area or relocated by reason of the
annexation or an amount equal to two and one-half (2 1/2)
times the incumbent electricity supplier's gross revenues
from electricity sales in the annexed area during the twelve
(12) month period immediately preceding the date the
annexation ordinance became effective, whichever is
greater; plus
(ii) if additional permanent service locations or service
accounts are established in the annexed area during the five
(5) year period beginning on the effective date of the
annexation ordinance, one-tenth of one cent ($0.001) for
each kilowatt hour of electricity sold to each of those
permanent service locations or service accounts for sales
that occur during a five (5) year period beginning on the
date each service location or service account is established,
up to a maximum of one hundred seventy thousand
(170,000) kilowatt hours per service account or service
location for each monthly billing period.
However, the municipally owned electric utility is not required
to pay severance damages under item (ii) if, at the time each
annual payment otherwise would accrue, it is purchasing all of
its requirements for electric power and energy, except for
generation directly provided by the municipally owned electric
utility or by a customer, from the incumbent electricity
supplier. Severance damages must be paid not later than thirty
(30) days after the end of each calendar year in which
severance damages have accrued. The municipally owned
electric utility and incumbent electricity suppliers shall
cooperate to calculate the amount of any severance damages
and shall furnish to each other all information and records
reasonably necessary for the determination and verification of
severance damages. If the municipally owned electric utility
and incumbent electricity suppliers cannot agree on the
amount of severance damages the municipally owned electric
utility is to pay, the commission shall determine the amount
and order payment in accordance with this clause. Not later
than twenty (20) days after making a payment, the municipally
owned electric utility shall certify to the commission and to
any affected incumbent electricity supplier that it has paid the
amounts required under this clause.
(C) If the municipally owned electric utility fails to make a
payment under clause (B), an affected incumbent electricity
supplier may, not later than sixty (60) days after the payment
is due and after giving the municipally owned electric utility
reasonable notice of and an opportunity to cure the defect, file
with the commission a petition alleging that a payment due
under clause (B) has not been made. If the commission finds
after notice and hearing that any payments owed to the
incumbent electricity supplier have not been timely and fully
paid, the commission shall order the municipally owned
electric utility to pay:
(i) the delinquent payments by a date determined by the
commission;
(ii) accrued interest at the rate set forth in IC 24-4.6-1-102;
and
(iii) the incumbent electricity supplier's costs of filing and
prosecuting a petition under this clause.
If the commission finds against the incumbent electricity
supplier, it shall order the incumbent electricity supplier to pay
the costs incurred by the municipally owned electric utility in
defending against the incumbent electricity supplier's petition.
(D) A certified copy of a final commission order that:
(i) determines and orders the payment of severance damages
under clause (B); or
(ii) orders the payment of delinquent payments, interest, and
costs under clause (C);
may be filed with the clerk of the circuit or superior court of
any county in which part or all of the annexed area is located.
A commission order that is filed in a court under this clause
may be enforced and executed in the same manner as if it were
a final judgment of that court.
(2) Upon mutual agreement of the affected electricity suppliers
and approval of the commission. If notice of a verified request for
a change of boundary lines by mutual agreement under this
subdivision is published in a newspaper of general circulation in
every county in which the boundary lines are located and an
affected electricity customer does not request a hearing within
twenty (20) days of the last date of publication, the commission
may approve the change without a hearing. The commission shall
approve a boundary line change under this subdivision unless the
commission finds, after a public hearing, that the change would
cause:
(A) duplication of electric utility facilities;