CHAPTER 2.5. ALTERNATIVE UTILITY REGULATION
IC 8-1-2.5
Chapter 2.5. Alternative Utility Regulation
IC 8-1-2.5-1
Legislative findings
Sec. 1. The Indiana general assembly hereby declares thefollowing:
(1) That the provision of safe, adequate, efficient, andeconomical retail energy services is a continuing goal of thecommission in the exercise of its jurisdiction.
(2) That competition is increasing in the provision of energyservices in Indiana and the United States.
(3) That traditional commission regulatory policies andpractices, and certain existing statutes are not adequatelydesigned to deal with an increasingly competitive environmentfor energy services and that alternatives to traditional regulatorypolicies and practices may be less costly.
(4) That an environment in which Indiana consumers will haveavailable state-of-the-art energy services at economical andreasonable costs will be furthered by flexibility in the regulationof energy services.
(5) That flexibility in the regulation of energy servicesproviders is essential to the well-being of the state, its economy,and its citizens.
(6) That the public interest requires the commission to beauthorized to issue orders and to formulate and adopt rules andpolicies that will permit the commission in the exercise of itsexpertise to flexibly regulate and control the provision ofenergy services to the public in an increasingly competitiveenvironment, giving due regard to the interests of consumersand the public, and to the continued availability of safe,adequate, efficient, and economical energy service.
As added by P.L.108-1995, SEC.3.
IC 8-1-2.5-2
"Energy utility" defined
Sec. 2. As used in this chapter, "energy utility" means a publicutility or a municipally owned utility within the meaning ofIC 8-1-2-1, or a local district corporation or a general districtcorporation within the meaning of IC 8-1-13-23, engaged in theproduction, transmission, delivery, or furnishing of heat, light, orpower.
As added by P.L.108-1995, SEC.3.
IC 8-1-2.5-3
"Retail energy service" defined
Sec. 3. As used in this chapter, "retail energy service" meansenergy service furnished by an energy utility to a customer forultimate consumption, including energy service by a general districtcorporation to a local district corporation within the meaning of
IC 8-1-13-23. The term does not include wholesale energy servicefurnished by an energy utility for resale (other than energy service bya general district corporation to a local district corporation) toanother energy utility, a cooperatively owned electric utility, or amunicipally owned electric utility.
As added by P.L.108-1995, SEC.3.
IC 8-1-2.5-4
Petition from energy utility requesting relief
Sec. 4. Section 5 or 6, or both, of this chapter do not apply to anenergy utility unless the energy utility voluntarily submits a verifiedpetition to the commission stating the energy utility's election tobecome subject to such section or sections. A request for relief by anenergy utility under section 5 of this chapter shall be limited tojurisdiction over the energy utility or its retail energy services,including rates, charges, or both. A request for relief by an energyutility under section 6 of this chapter shall be limited to approval ofits energy services or the establishment of its rates and charges, orboth.
As added by P.L.108-1995, SEC.3.
IC 8-1-2.5-5
Commission's order declining jurisdiction
Sec. 5. (a) Notwithstanding any other law or rule adopted by thecommission, except those cited, or rules adopted that pertain to thosecited, in section 11 of this chapter, on the request of an energy utilityelecting to become subject to this section, the commission may enteran order, after notice and hearing, that the public interest requires thecommission to commence an orderly process to decline to exercise,in whole or in part, its jurisdiction over either the energy utility orthe retail energy service of the energy utility, or both.
(b) In determining whether the public interest will be served, thecommission shall consider the following:
(1) Whether technological or operating conditions, competitiveforces, or the extent of regulation by other state or federalregulatory bodies render the exercise, in whole or in part, ofjurisdiction by the commission unnecessary or wasteful.
(2) Whether the commission's declining to exercise, in whole orin part, its jurisdiction will be beneficial for the energy utility,the energy utility's customers, or the state.
(3) Whether the commission's declining to exercise, in whole orin part, its jurisdiction will promote energy utility efficiency.
(4) Whether the exercise of commission jurisdiction inhibits anenergy utility from competing with other providers offunctionally similar energy services or equipment.
As added by P.L.108-1995, SEC.3.
IC 8-1-2.5-6
Powers of commission in approving rates and services; alternativeregulatory plan Sec. 6. (a) Notwithstanding any other law or rule adopted by thecommission, except those cited, or rules adopted that pertain to thosecited, in section 11 of this chapter, in approving retail energyservices or establishing just and reasonable rates and charges, or bothfor an energy utility electing to become subject to this section, thecommission may do the following:
(1) Adopt alternative regulatory practices, procedures, andmechanisms, and establish rates and charges that:
(A) are in the public interest as determined by considerationof the factors described in section 5 of this chapter; and
(B) enhance or maintain the value of the energy utility'sretail energy services or property;
including practices, procedures, and mechanisms focusing onthe price, quality, reliability, and efficiency of the serviceprovided by the energy utility.
(2) Establish rates and charges based on market or averageprices, price caps, index based prices, and prices that:
(A) use performance based rewards or penalties, eitherrelated to or unrelated to the energy utility's return orproperty; and
(B) are designed to promote efficiency in the rendering ofretail energy services.
(b) This section:
(1) does not give a party to a collective bargaining agreementany greater rights under the collective bargaining agreementthan the party had before January 1, 1995;
(2) does not give the commission the authority to order a partyto a collective bargaining agreement to cancel, terminate,amend or otherwise modify the collective bargainingagreement; and
(3) may not be implemented by the commission in a way thatwould give a party to a collective bargaining agreement anygreater rights under the collective bargaining agreement thanthe party had before January 1, 1995.
(c) An energy utility electing to become subject to this sectionshall file with the commission an alternative regulatory planproposing how the commission will approve retail energy services orjust and reasonable rates and charges for the energy utility's retailenergy service.
(d) The energy utility shall publish a notice of the filing of apetition under this section in a newspaper of general circulationpublished in any county in which the energy utility provides retailenergy service.
(e) After notice and hearing, the commission may approve, reject,or modify the energy utility's proposed plan if the commission findsthat such action is consistent with the public interest. However, thecommission may not order that material modifications changing thenature, scope or duration of the plan take effect without theagreement of the energy utility. The energy utility shall have twenty(20) days after the date of a commission order modifying the energy
utility's proposed plan within which to, in writing, accept or rejectthe commission's order.
(f) An energy utility may withdraw a plan proposed under thissection without prejudice before the commission's approval of theplan, or the energy utility may timely reject a commission ordermodifying its proposed plan under this section without prejudice.However, the energy utility may not file a petition for comparablerelief under this section for a period of twelve (12) months after thedate of the energy utility's withdrawal of its proposed plan or the dateof the energy utility's rejection of the commission's order, whicheveris applicable.
As added by P.L.108-1995, SEC.3.
IC 8-1-2.5-7
Termination of plan; exercise of jurisdiction over energy utility
Sec. 7. The commission may:
(1) on its own motion;
(2) at the request of the utility consumer counselor;
(3) at the request of the affected energy utility; or
(4) at the request of any class satisfying the standingrequirements of IC 8-1-2-54;
enter an order notifying an energy utility subject to an alternativeregulatory plan or over which jurisdiction was either limited or notexercised under this chapter that the commission will proceed toterminate the plan, or any part thereof, or exercise jurisdiction overthe energy utility or its retail energy service to the extent the publicinterest requires, unless a formal request for a hearing is filed by theenergy utility with the commission not more than fifteen (15) daysafter the date of the order. In the event that such a formal request istimely filed, the commission shall hold a hearing concerning suchmatters and issue its order thereon based upon the evidenceintroduced at the hearing. However, if the commission has declinedjurisdiction in whole or in part or approved an alternative regulatoryplan under this chapter for a fixed term of years, such jurisdictionmay be reimposed or the plan, or any part of the plan, may beterminated before expiration of the term only if material andirreparable harm to the energy utility, the energy utility's customers,the state, or the safety of the energy utility's workforce has beenestablished.
As added by P.L.108-1995, SEC.3.
IC 8-1-2.5-8
Commencement of proceedings
Sec. 8. A proceeding before the commission under section 5 or 6,or both, of this chapter may be commenced only by an energy utilitythat elects to become subject to the applicable section.
As added by P.L.108-1995, SEC.3.
IC 8-1-2.5-9
Regulatory flexibility committee Sec. 9. (a) A regulatory flexibility committee established underIC 8-1-2.6-4 to monitor changes in the telephone industry shall alsoserve to monitor changes and competition in the energy utilityindustry.
(b) The commission shall before August 15 of each year preparefor presentation to the regulatory flexibility committee an analysis ofthe effects of competition or changes in the energy utility industry onservice and on the pricing of all energy utility services under thejurisdiction of the commission.
(c) In addition to reviewing the commission report prepared undersubsection (b), the regulatory flexibility committee shall also issuea report and recommendations to the legislative council beforeNovember 1 of each year that are based on a review of the followingissues:
(1) The effects of competition or changes in the energy utilityindustry and the impact of the competition or changes on theresidential rates.
(2) The status of modernization of the energy utility facilities inIndiana and the incentives required to further enhance thisinfrastructure.
(3) The effects on economic development of this modernization.
(4) The traditional method of regulating energy utilities and themethod's effectiveness.
(5) The economic and social effectiveness of traditional energyutility service pricing.
(6) The effects of legislation enacted by the United StatesCongress.
(7) All other energy utility issues the committee considersappropriate; however, it is not the intent of this section toprovide for the review of the statutes cited in section 11 of thischapter.
The report and recommendations issued under this subsection to thelegislative council must be in an electronic format under IC 5-14-6.
(d) This section:
(1) does not give a party to a collective bargaining agreementany greater rights under the agreement than the party had beforeJanuary 1, 1995;
(2) does not give the committee the authority to order a party toa collective bargaining agreement to cancel, terminate, amendor otherwise modify the collective bargaining agreement; and
(3) may not be implemented by the committee in a way thatwould give a party to a collective bargaining agreement anygreater rights under the agreement than the party had beforeJanuary 1, 1995.
(e) The regulatory flexibility committee shall meet on the call ofthe co-chairs to study energy utility issues described in subsection(c). The committee shall, with the approval of the commission, retainindependent consultants the committee considers appropriate toassist the committee in the review and study. The expenses for theconsultants shall be paid with funds from the public utility fees
assessed under IC 8-1-6.
(f) The legislative services agency shall provide staff support tothe committee.
(g) Each member of the committee is entitled to receive the sameper diem, mileage, and travel allowances paid to individuals whoserve as legislative members of interim study committees establishedby the legislative council.
As added by P.L.108-1995, SEC.3. Amended by P.L.78-1997, SEC.2;P.L.28-2004, SEC.70.
IC 8-1-2.5-10
Implementation of chapter
Sec. 10. The commission may also adopt rules under IC 4-22-2 toimplement this chapter, but the absence of such rules does not affectthe commission's authority under this chapter.
As added by P.L.108-1995, SEC.3.
IC 8-1-2.5-11
Limitations on chapter's applicability
Sec. 11. Nothing in this chapter affects the continuingapplicability of IC 8-1-2-87, IC 8-1-2-87.5, IC 8-1-2.3, or IC 8-1-3.
As added by P.L.108-1995, SEC.3.
IC 8-1-2.5-12
Wages of independent contractor
Sec. 12. For purposes of IC 8-1-2.5, wages paid to an independentcontractor of an energy utility for construction or maintenanceperformed for an energy utility shall not be found to be excessivemerely because the wages are those normally paid for work of thesame type and quality in the labor market in which the work for theenergy utility is being performed.
As added by P.L.108-1995, SEC.3.