CHAPTER 2.3. ELECTRICITY SUPPLIERS' SERVICE AREA ASSIGNMENTS
IC 8-1-2.3
Chapter 2.3. Electricity Suppliers' Service Area Assignments
IC 8-1-2.3-1
Legislative findings and declaration of policy
Sec. 1. Legislative Findings and Declaration of Policy. It isdeclared to be in the public interest that, in order to encourage theorderly development of coordinated statewide electric service atretail, to eliminate or avoid unnecessary duplication of electric utilityfacilities, to prevent the waste of material and resources, and topromote economical, efficient, and adequate electric service to thepublic, the currently unincorporated areas of Indiana shall be dividedinto designated geographic areas within which an assigned electricitysupplier has the sole right to furnish retail electric service tocustomers.
As added by Acts 1980, P.L.69, SEC.1.
IC 8-1-2.3-2
Definitions
Sec. 2. (a) The definitions in this section apply throughout thischapter.
(b) "Electricity supplier" means a public utility, a local districtrural electric membership corporation, or a municipally ownedelectric utility which furnishes retail electric service to the public.
(c) "Retail electric service" means electric service furnished to acustomer for ultimate consumption, but does not include wholesaleelectric service furnished by an electricity supplier to anotherelectricity supplier for resale.
(d) "Existing electric distribution line" means an electricconductor which on January 1, 1979, was being used for thedistribution or delivery of retail electric service.
(e) "Assigned service area" means the designated geographic areawithin the boundaries of which an electricity supplier is authorizedto furnish all retail electric service, as provided in this chapter.
(f) "Municipality" means a city or town.
(g) "Existing municipal limits" means the corporate boundaries ofany municipality as such boundaries existed on January 1, 1979.
As added by Acts 1980, P.L.69, SEC.1. Amended by P.L.23-1988,SEC.30.
IC 8-1-2.3-3
Assigned service areas
Sec. 3. Assigned Service Areas. (a) Unless otherwise agreed uponbetween adjacent electricity suppliers, all areas inside existingmunicipal limits are hereby assigned to the electricity supplierserving a plurality of the electric meters within the municipality onJanuary 1, 1979.
(b) Where two (2) or more electricity suppliers are rendering retailelectric service within existing municipal limits, those suppliers shalltake one (1) or more of the following actions to assure that only one
(1) electricity supplier shall serve within the existing municipallimits:
(1) The electricity supplier serving a plurality of electric meterswithin the municipality on January 1, 1979, may purchase theelectric utility property of any other electricity supplier whichis devoted to retail electric service and is located within theexisting municipal limits, at its then reproduction cost newdepreciated value plus severance damages.
(2) At the option of the electricity supplier serving a plurality ofelectric meters within the municipality on January 1, 1979, andsubject to commission approval, the electricity suppliers mayexchange all or part of the electric utility property locatedoutside of the existing municipal limits for the electric utilityproperty located within the existing municipal limits.
(3) If the affected electricity suppliers do not agree upon apurchase or exchange of the electric utility property beforeSeptember 1, 1980, the commission shall determine theappropriate purchase price for the electric utility propertyaccording to subsection (b)(1) of this section.
(c) On or before July 1, 1981, each electricity supplier in eachcounty shall exchange with all other electricity suppliers in thecounty a map or maps showing all of its existing electric distributionlines in the county which are relevant to the assignment of serviceareas outside existing municipal limits and any other information itconsiders useful in determining the boundaries of an assigned servicearea.
(d) Until otherwise agreed upon between electricity suppliers orordered by the commission under section 3(g) of this chapter, theboundaries of the assigned service area for each adjacent electricitysupplier outside existing municipal limits shall be set as a lineequidistant from its existing electric distribution lines and the nearestexisting electric distribution lines of any other electricity supplier;the resulting assigned service area outside existing municipal limitsof an electricity supplier will be that area which is closer to theexisting electric distribution lines of a supplier than to the existingelectric distribution lines of any other electricity supplier.
(e) Each electricity supplier shall negotiate with all adjacentelectricity suppliers as soon as practicable in an effort to agree on theboundaries of the service areas to be assigned.
(f) Maps depicting the boundaries of such proposed service areaassignments shall be prepared by each electricity supplier for eachcounty in which the electricity supplier provides electric retailservice, and shall be filed, together with a petition requestingapproval and assignment of such service areas with the commissionon or before July 1, 1982, or on such other date as the commissionmay determine, but in any event on or before March 1, 1983.Thereafter, the commission shall hold a public hearing regarding theproposed service areas, after publication of notice of the hearing atleast ten (10) days before the hearing in the county or counties inwhich such proposed service areas are located. If the commission
finds that the proposed service areas comply with this chapter, itshall issue an order within twelve (12) months of the filing of thepetition and related maps, approving and assigning the service areasas designated on the prepared maps.
(g) If two (2) or more adjacent electricity suppliers cannot agreeupon the boundary line or lines between their respective proposedservice areas on or before July 1, 1982, or such other date as thecommission may determine, but in any event on or before March 1,1983, the commission on its own motion or upon petition of one (1)of the electricity suppliers shall hold a public hearing regarding thelocation of the boundary line or lines, after publication of notice ofthe hearing at least ten (10) days before the hearing in the county orcounties in which the boundary line or lines are located. Thecommission shall determine the boundary line or lines based asnearly as practicable upon a line equidistant between the existingelectric distribution lines of the adjacent electricity suppliers,consistent with good utility practice and public convenience andnecessity. The commission shall issue an order determining theboundary line or lines and assigning the service areas, and shalldirect the parties to file with the commission maps showing suchassigned service areas. If the commission determines that the mapscomply with its order, it shall issue a supplemental order approvingthe assigned service areas as designated on the maps.
(h) Once established according to this section, the boundaries ofassigned service areas may not be changed except as provided insection 6 of this chapter.
As added by Acts 1980, P.L.69, SEC.1. Amended by Acts 1982,P.L.71, SEC.1.
IC 8-1-2.3-4
Service area rights
Sec. 4. Service Area Rights. (a) As long as an electricity suppliercontinues to provide adequate retail service, it shall have the soleright to furnish retail electric service to each present and futureconsumer within the boundaries of its assigned service area and noother electricity supplier shall render or extend retail electric servicewithin its assigned service area unless the electricity supplier withthe sole right consents thereto in writing and the commissionapproves. This subsection does not prevent the commission fromexercising its authority under IC 8-1-2-69.
(b) If an electricity supplier unlawfully renders or extends retailelectric service within the assigned service area of another electricitysupplier, the electricity supplier which has the sole right to furnishretail electric service in that assigned service area may bring anaction in the circuit or superior court of the county where suchassigned service area is located to enjoin the other electricity supplierfrom rendering or extending such unlawful retail electric service.
If a violation is proved, the violator shall pay to the aggrievedelectricity supplier the gross revenues derived by the violator fromthe sale of electric service within the assigned service area of the
aggrieved electricity supplier, all witness fees, court costs andreasonable attorneys' fees incurred in any litigation brought toenforce this section. Payment of damages, fees and costs does notentitle a violator to furnish retail electric service in such assignedservice area. All such actions or proceedings must be brought withinthree (3) years after the violation occurs.
As added by Acts 1980, P.L.69, SEC.1.
IC 8-1-2.3-5
Effect of incorporation, annexation, consolidation, or merger
Sec. 5. Effect of Incorporation, Annexation, Consolidation orMerger. After January 1, 1979, the inclusion by incorporation,annexation, consolidation, or merger of any part of the assignedservice area of an electricity supplier does not impair or affect therights of an electricity supplier to continue to solely furnish andextend retail electric service throughout any part of its assignedservice area, except as provided in section 6 of this chapter.
As added by Acts 1980, P.L.69, SEC.1.
IC 8-1-2.3-6
Change of service area boundaries
Sec. 6. The boundaries of the assigned service areas of electricitysuppliers may not be changed except under any one (1) of thefollowing circumstances:
(1) If a municipality which owns and operates an electric utilitysystem furnishing retail electric service to the public annexes anarea beyond the assigned service area of its municipally ownedelectric utility, the municipally owned electric utility maypetition the commission to change the assigned service area ofthe municipally owned electric utility to include the annexedarea, according to the following procedures:
(A) The municipally owned electric utility shall file itspetition with the commission not later than sixty (60) daysafter the annexation becomes effective. The petition mustinclude a certified copy of the annexation ordinance, whichserves as conclusive evidence that the area has been lawfullyannexed and is part of the municipality. After the filing of apetition under this subdivision, the commission shallpromptly enter an order changing the assigned service areafacet maps of the municipally owned electric utility andincumbent electricity suppliers to include the annexed areawithin the assigned service area of the municipally ownedelectric utility and giving the right to serve and immediatepossession to the municipally owned electric utility. Thecommission order is enforceable in court pending an appealof that order. An appellant from a court order enforcing acommission order under this subdivision is not entitled to astay of the court order pending appeal. However, thissubdivision 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 arenot 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 petitionunder this subdivision, the municipally owned electric utilityshall determine for each affected incumbent electricitysupplier and pay to that supplier an amount not less than thevalue of all the electric utility property of the incumbentelectricity supplier that is devoted to furnishing retailelectric service within the additional assigned service area atits then reproduction cost new depreciated value. In addition,the municipally owned electric utility shall pay theincumbent electricity supplier severance damages in anamount equal to:
(i) the value of the incumbent electricity supplier'sdistribution and substation facilities dedicated to andlocated within the annexed area or relocated by reason ofthe annexation or an amount equal to two and one-half (21/2) times the incumbent electricity supplier's grossrevenues from electricity sales in the annexed area duringthe twelve (12) month period immediately preceding thedate the annexation ordinance became effective,whichever is greater; plus
(ii) if additional permanent service locations or serviceaccounts are established in the annexed area during thefive (5) year period beginning on the effective date of theannexation ordinance, one-tenth of one cent ($0.001) foreach kilowatt hour of electricity sold to each of thosepermanent service locations or service accounts for salesthat occur during a five (5) year period beginning on thedate each service location or service account isestablished, up to a maximum of one hundred seventythousand (170,000) kilowatt hours per service account orservice location for each monthly billing period.
However, the municipally owned electric utility is notrequired to pay severance damages under item (ii) if, at thetime each annual payment otherwise would accrue, it ispurchasing all of its requirements for electric power andenergy, except for generation directly provided by themunicipally owned electric utility or by a customer, from theincumbent electricity supplier. Severance damages must bepaid not later than thirty (30) days after the end of eachcalendar year in which severance damages have accrued.The municipally owned electric utility and incumbentelectricity suppliers shall cooperate to calculate the amountof any severance damages and shall furnish to each other allinformation and records reasonably necessary for thedetermination and verification of severance damages. If themunicipally owned electric utility and incumbent electricitysuppliers cannot agree on the amount of severance damagesthe municipally owned electric utility is to pay, the
commission shall determine the amount and order paymentin accordance with this clause. Not later than twenty (20)days after making a payment, the municipally owned electricutility shall certify to the commission and to any affectedincumbent electricity supplier that it has paid the amountsrequired under this clause.
(C) If the municipally owned electric utility fails to make apayment under clause (B), an affected incumbent electricitysupplier may, not later than sixty (60) days after the paymentis due and after giving the municipally owned electric utilityreasonable notice of and an opportunity to cure the defect,file with the commission a petition alleging that a paymentdue under clause (B) has not been made. If the commissionfinds after notice and hearing that any payments owed to theincumbent electricity supplier have not been timely and fullypaid, the commission shall order the municipally ownedelectric utility to pay:
(i) the delinquent payments by a date determined by thecommission;
(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 andprosecuting a petition under this clause.
If the commission finds against the incumbent electricitysupplier, it shall order the incumbent electricity supplier topay the costs incurred by the municipally owned electricutility in defending against the incumbent electricitysupplier's petition.
(D) A certified copy of a final commission order that:
(i) determines and orders the payment of severancedamages 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 ofany county in which part or all of the annexed area islocated. A commission order that is filed in a court underthis clause may be enforced and executed in the samemanner as if it were a final judgment of that court.
(2) Upon mutual agreement of the affected electricity suppliersand approval of the commission. If notice of a verified requestfor a change of boundary lines by mutual agreement under thissubdivision is published in a newspaper of general circulationin every county in which the boundary lines are located and anaffected electricity customer does not request a hearing withintwenty (20) days of the last date of publication, the commissionmay approve the change without a hearing. The commissionshall approve a boundary line change under this subdivisionunless the commission finds, after a public hearing, that thechange would cause:
(A) duplication of electric utility facilities; (B) waste of materials or resources; or
(C) uneconomic, inefficient, or inadequate electric service tothe public.
(3) In the case where a landowner owns a single tract of landthat is intersected by the boundary lines of two (2) or moreassigned service areas, and retail electric service can best besupplied by only one (1) electricity supplier, or in the casewhere a customer or customers are housed in a single structureor constitute a single governmental, industrial, or institutionaloperation, and the electricity suppliers involved are unable toagree which shall furnish the electric service, any of theelectricity suppliers may submit the matter to the commissionfor its determination based upon public convenience andnecessity. If, after notice and hearing, the commissiondetermines that one (1) or more electricity suppliers are tosupply the required retail electric service and the boundaries ofan assigned service area are to be changed, the assigned servicearea maps of the electricity suppliers shall be changed to reflectthe new boundaries.
As added by Acts 1980, P.L.69, SEC.1. Amended by P.L.91-1985,SEC.1; P.L.19-1986, SEC.27; P.L.79-1996, SEC.1;P.L.255-1997(ss), SEC.7; P.L.217-1999, SEC.1; P.L.56-2002,SEC.1.