Reprinted
February 2, 2007
SENATE BILL No. 206
_____
DIGEST OF SB 206
(Updated February 1, 2007 4:01 pm - DI 101)
Citations Affected: IC 8-1.
Synopsis: Pollution control expenses for energy facilities. Amends the
definition of "clean coal technology" in various statutes. Defines the
term as a technology used at an electric generating facility to reduce
airborne emissions that are regulated, or reasonably anticipated to be
regulated, by the federal government, the state, or a political
subdivision of the state. (The current definition includes only
technologies that reduce sulfur or nitrogen emissions.) Allows an
existing electric generating facility to petition the utility regulatory
commission (IURC) for approval of a regulated air emissions project.
Requires the IURC to: (1) approve the project if the IURC finds, after
notice and hearing, the project to be reasonable and necessary; and (2)
provide certain financial incentives for the project. Allows the IURC
to provide certain additional incentives for an approved project.
Effective: Upon passage.
Gard
January 11, 2007, read first time and referred to Committee on Utilities & Regulatory
Affairs.
January 29, 2007, amended, reported favorably _ Do Pass.
February 1, 2007, read second time, amended, ordered engrossed.
Reprinted
February 2, 2007
First Regular Session 115th General Assembly (2007)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in
this style type, and deletions will appear in
this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in
this style type. Also, the
word
NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in
this style type or
this style type reconciles conflicts
between statutes enacted by the 2006 Regular Session of the General Assembly.
SENATE BILL No. 206
A BILL FOR AN ACT to amend the Indiana Code concerning
utilities and transportation.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 8-1-2-6.1; (07)SB0206.2.1. -->
SECTION 1. IC 8-1-2-6.1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6.1. (a) As used in
this section, "clean coal technology" means a technology (including
precombustion treatment of coal):
(1) that is used at a new or existing electric generating facility and
directly or indirectly reduces airborne emissions of
sulfur or
nitrogen based pollutants
that are:
(A) associated with the combustion or use of coal; and
(B) regulated, or reasonably anticipated to be regulated,
by:
(i) the federal government;
(ii) the state;
(iii) a political subdivision of the state; or
(iv) any agency of a unit of government described in
items (i) through (iii); and
(2) that either:
(A) is not in general commercial use at the same or greater
scale in new or existing facilities in the United States as of
January 1, 1989; or
(B) has been selected by the United States Department of
Energy for funding under its Innovative Clean Coal
Technology program and is finally approved for such funding
on or after January 1, 1989.
(b) As used in this section, "Indiana coal" means coal from a mine
whose coal deposits are located in the ground wholly or partially in
Indiana regardless of the location of the mine's tipple.
(c) Except as provided in subsection (d), the commission shall allow
a utility to recover as operating expenses those expenses associated
with:
(1) research and development designed to increase use of Indiana
coal; and
(2) preconstruction costs (including design and engineering costs)
associated with employing clean coal technology at a new or
existing coal burning electric generating facility if the
commission finds that the facility:
(A) utilizes and will continue to utilize (as its primary fuel
source) Indiana coal; or
(B) is justified, because of economic considerations or
governmental requirements, in utilizing nonIndiana coal;
after the technology is in place.
(d) The commission may only allow a utility to recover
preconstruction costs as operating expenses on a particular project if
the commission awarded a certificate under IC 8-1-8.7 for that project.
(e) The commission shall establish guidelines for determining
recoverable expenses.
SOURCE: IC 8-1-2-6.6; (07)SB0206.2.2. -->
SECTION 2. IC 8-1-2-6.6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6.6. (a) As used in
this section:
"Clean coal technology" means a technology (including
precombustion treatment of coal):
(1) that is used at a new or existing electric generating facility and
directly or indirectly reduces airborne emissions of sulfur or
nitrogen based pollutants that are:
(A) associated with the combustion or use of coal; and
(B) regulated, or reasonably anticipated to be regulated,
by:
(i) the federal government;
(ii) the state;
(iii) a political subdivision of the state; or
(iv) any agency of a unit of government described in
items (i) through (iii); and
(2) that either:
(A) is not in general commercial use at the same or greater
scale in new or existing facilities in the United States as of
January 1, 1989; or
(B) has been selected by the United States Department of
Energy for funding under its Innovative Clean Coal
Technology program and is finally approved for such funding
on or after January 1, 1989.
"Indiana coal" means coal from a mine whose coal deposits are
located in the ground wholly or partially in Indiana regardless of the
location of the mine's tipple.
"Qualified pollution control property" means an air pollution control
device on a coal burning electric generating facility or any equipment
that constitutes clean coal technology that has been approved for use
by the commission, that meets applicable state or federal requirements,
and that is designed to accommodate the burning of coal from the
geological formation known as the Illinois Basin.
"Utility" refers to any electric generating utility allowed by law to
earn a return on its investment.
(b) Upon the request of a utility that began construction after
October 1, 1985, and before March 31, 2002, of qualified pollution
control property that is to be used and useful for the public
convenience, the commission shall for ratemaking purposes add to the
value of that utility's property the value of the qualified pollution
control property under construction, but only if at the time of the
application and thereafter:
(1) the facility burns only Indiana coal as its primary fuel source
once the air pollution control device is fully operational; or
(2) the utility can prove to the commission that the utility is
justified because of economic considerations or governmental
requirements in utilizing some nonIndiana coal.
(c) The commission shall adopt rules under IC 4-22-2 to implement
this section.
SOURCE: IC 8-1-2-6.7; (07)SB0206.2.3. -->
SECTION 3. IC 8-1-2-6.7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6.7. (a) As used in
this section, "clean coal technology" means a technology (including
precombustion treatment of coal):
(1) that is used in a new or existing electric generating facility and
directly or indirectly reduces airborne emissions of sulfur or
nitrogen based pollutants that are:
(A) associated with the combustion or use of coal; and
(B) regulated, or reasonably anticipated to be regulated,
by:
(i) the federal government;
(ii) the state;
(iii) a political subdivision of the state; or
(iv) any agency of a unit of government described in
items (i) through (iii); and
(2) that either:
(A) is not in general commercial use at the same or greater
scale in new or existing facilities in the United States as of
January 1, 1989; or
(B) has been selected by the United States Department of
Energy for funding under its Innovative Clean Coal
Technology program and is finally approved for such funding
on or after January 1, 1989.
(b) The commission shall allow a public or municipally owned
electric utility that incorporates clean coal technology to depreciate that
technology over a period of not less than ten (10) years or the useful
economic life of the technology, whichever is less and not more than
twenty (20) years if it finds that the facility where the clean coal
technology is employed:
(1) utilizes and will continue to utilize (as its primary fuel source)
Indiana coal; or
(2) is justified, because of economic considerations or
governmental requirements, in utilizing nonIndiana coal;
after the technology is in place.
SOURCE: IC 8-1-2-6.8; (07)SB0206.2.4. -->
SECTION 4. IC 8-1-2-6.8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6.8. (a) This
section applies to a utility that begins construction of qualified
pollution control property after March 31, 2002.
(b) As used in this section, "clean coal technology" means a
technology (including precombustion treatment of coal):
(1) that is used in a new or existing energy generating facility and
directly or indirectly reduces airborne emissions of sulfur,
mercury, or nitrogen oxides or other regulated air emissions that
are:
(A) associated with the combustion or use of coal; and
(B) regulated, or reasonably anticipated to be regulated,
by:
(i) the federal government;
(ii) the state;
(iii) a political subdivision of the state; or
(iv) any agency of a unit of government described in
items (i) through (iii); and
(2) that either:
(A) was not in general commercial use at the same or greater
scale in new or existing facilities in the United States at the
time of enactment of the federal Clean Air Act Amendments
of 1990 (P.L.101-549); or
(B) has been selected by the United States Department of
Energy for funding under its Innovative Clean Coal
Technology program and is finally approved for such funding
on or after the date of enactment of the federal Clean Air Act
Amendments of 1990 (P.L.101-549).
(c) As used in this section, "qualified pollution control property"
means an air pollution control device on a coal burning energy
generating facility or any equipment that constitutes clean coal
technology that has been approved for use by the commission and that
meets applicable state or federal requirements.
(d) As used in this section, "utility" refers to any energy generating
utility allowed by law to earn a return on its investment.
(e) Upon the request of a utility that begins construction after March
31, 2002, of qualified pollution control property that is to be used and
useful for the public convenience, the commission shall for ratemaking
purposes add to the value of that utility's property the value of the
qualified pollution control property under construction.
(f) The commission shall adopt rules under IC 4-22-2 to implement
this section.
SOURCE: IC 8-1-8.7-1; (07)SB0206.2.5. -->
SECTION 5. IC 8-1-8.7-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 1. As used in this
chapter, "clean coal technology" means a technology (including
precombustion treatment of coal):
(1) that is used in a new or existing electric generating facility and
directly or indirectly reduces airborne emissions of sulfur or
nitrogen based pollutants that are:
(A) associated with the combustion or use of coal; and
(B) regulated, or reasonably anticipated to be regulated,
by:
(i) the federal government;
(ii) the state;
(iii) a political subdivision of the state; or
(iv) any agency of a unit of government described in
items (i) through (iii); and
(2) that either:
(A) is not in general commercial use at the same or greater
scale in new or existing facilities in the United States as of
January 1, 1989; or
(B) has been selected by the United States Department of
Energy for funding under its Innovative Clean Coal
Technology program and is finally approved for such funding
on or after January 1, 1989.
SOURCE: IC 8-1-8.7-3; (07)SB0206.2.6. -->
SECTION 6. IC 8-1-8.7-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 3. (a) Except as
provided in subsection (c), a public utility may not use clean coal
technology at a new or existing electric generating facility without first
applying for and obtaining from the commission a certificate that states
that public convenience and necessity will be served by the use of clean
coal technology.
(b) The commission shall issue a certificate of public convenience
and necessity under subsection (a) if the commission finds that a clean
coal technology project offers substantial potential of reducing sulfur
or nitrogen based pollutants described in section 1(1) of this chapter
in a more efficient manner than conventional technologies in general
use as of January 1, 1989. For purposes of this chapter, a project that
the United States Department of Energy has selected for funding under
its Innovative Clean Coal Technology program and is finally approved
for funding after December 31, 1988, is not considered a conventional
technology in general use as of January 1, 1989. When determining
whether to grant a certificate under this section, the commission shall
examine the following factors:
(1) The costs for constructing, implementing, and using clean coal
technology compared to the costs for conventional emission
reduction facilities.
(2) Whether a clean coal technology project will also extend the
useful life of an existing electric generating facility and the value
of that extension.
(3) The potential reduction of sulfur and nitrogen based pollutants
described in section 1(1) of this chapter that can be achieved
by the proposed clean coal technology system.
(4) The reduction of sulfur nitrogen based pollutants described
in section 1(1) of this chapter that can be achieved by
conventional pollution control equipment.
(5) Federal sulfur and nitrogen based pollutant emission
standards.
(6) The likelihood of success of the proposed project.
(7) The cost and feasibility of the retirement of an existing electric
generating facility.
(8) The dispatching priority for the facility utilizing clean coal
technology, considering direct fuel costs, revenues and expenses
of the utility, and environmental factors associated with
byproducts resulting from the utilization of the clean coal
technology.
(9) Any other factors the commission considers relevant,
including whether the construction, implementation, and use of
clean coal technology is in the public's interest.
(c) A public utility is not required to obtain a certificate under this
chapter for a clean coal technology project that constitutes a research
and development project that may be expensed under IC 8-1-2-6.1.
SOURCE: IC 8-1-8.8-3; (07)SB0206.2.7. -->
SECTION 7. IC 8-1-8.8-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 3. As used in this
chapter, "clean coal technology" means a technology (including
precombustion treatment of coal):
(1) that is used in a new or existing energy generating facility and
directly or indirectly reduces airborne emissions of sulfur,
mercury, or nitrogen oxides or other regulated air emissions that
are:
(A) associated with the combustion or use of coal; and
(B) regulated, or reasonably anticipated to be regulated,
by:
(i) the federal government;
(ii) the state;
(iii) a political subdivision of the state; or
(iv) any agency of a unit of government described in
items (i) through (iii); and
(2) that either:
(A) was not in general commercial use at the same or greater
scale in new or existing facilities in the United States at the
time of enactment of the federal Clean Air Act Amendments
of 1990 (P.L.101-549); or
(B) has been selected by the United States Department of
Energy for funding under its Innovative Clean Coal
Technology program and is finally approved for such funding
on or after the date of enactment of the federal Clean Air Act
Amendments of 1990 (P.L.101-549).
SOURCE: IC 8-1-8.8-6.3; (07)SB0206.2.8. -->
SECTION 8. IC 8-1-8.8-6.3 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]:
Sec. 6.3. As used in this chapter, "existing
electric generating facility" refers to a facility in Indiana, other
than a new energy generating facility, that, regardless of its fuel
source, is used to generate electricity.
SOURCE: IC 8-1-8.8-11.5; (07)SB0206.2.9. -->
SECTION 9. IC 8-1-8.8-11.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 11.5. (a) As used in this
section, "regulated air emissions" means air emissions from an
electric generating facility that are regulated, or reasonably
anticipated to be regulated, by:
(1) the federal government;
(2) the state;
(3) a political subdivision of the state; or
(4) any agency of a unit of government described in
subdivisions (1) through (3).
(b) As used in this section, "regulated air emissions project"
means a project designed to reduce regulated air emissions from an
existing electric generating facility. The term includes projects that
provide offset programs, such as agricultural and forestry
activities, that reduce the level of greenhouse gases in the
atmosphere.
(c) An energy utility (as defined in IC 8-1-2.5-2) may petition the
commission for approval of the construction, installation, and
operation of a regulated air emissions project. If the commission
finds, after notice and hearing, the proposed regulated air
emissions project to be reasonable and necessary, the commission
shall approve the project and provide the following incentives:
(1) The timely recovery of costs associated with the regulated
air emissions project, including capital, operation,
maintenance, depreciation, tax, and financing costs incurred
during the construction and operation of the project.
(2) The recovery of costs associated with:
(A) the purchase of emissions allowances; or
(B) the payment of emission taxes;
arising from compliance with air emissions regulations.
(d) In addition to the incentives described in subsection (c), the
commission may provide any of the following incentives for an
approved regulated air emissions project:
(1) The authorization of up to three (3) percentage points on
the return on shareholder equity that would otherwise be
allowed to be earned on the project.
(2) Other financial incentives the commission considers
appropriate.
SOURCE: ; (07)SB0206.2.10. -->
SECTION 10.
An emergency is declared for this act.