CHAPTER 27. ENVIRONMENTAL COMPLIANCE PLANS
IC 8-1-27
Chapter 27. Environmental Compliance Plans
IC 8-1-27-1
"Clean Air Act" defined
Sec. 1. As used in this chapter, "Clean Air Act" refers to thefederal Clean Air Act (42 U.S.C. 7401 et seq.) and regulationsadopted under the federal Clean Air Act.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-2
"Clean Air Act Amendments of 1990" defined
Sec. 2. As used in this chapter, "Clean Air Act Amendments of1990" refers to Title IV, Acid Deposition Control, of the federalClean Air Act Amendments of 1990 (P.L.101-549) and regulationsadopted under the federal Clean Air Act Amendments of 1990.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-3
"Environmental compliance plan" defined
Sec. 3. As used in this chapter, "environmental compliance plan"means a plan developed by a public utility to comply in whole or inpart with the requirements of the Clean Air Act Amendments of1990.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-4
"Indiana coal" defined
Sec. 4. As used in this chapter, "Indiana coal" means coal from amine whose coal deposits are located in the ground wholly orpartially in Indiana regardless of the location of the mine's tipple.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-5
"Public utility" defined
Sec. 5. As used in this chapter, "public utility" means a publicutility, a municipally owned utility, or a cooperatively owned utility.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-5.5
"Change of fuel type" defined
Sec. 5.5. As used in this chapter, "change of fuel type" means anychange in the fuel, including a change from Indiana coal, used by apublic utility.
As added by P.L.92-1993, SEC.2.
IC 8-1-27-6
Environmental compliance plan; required information
Sec. 6. (a) A public utility that has at least one (1) generating unitaffected by Section 404 (Phase I) or Section 405 (Phase II) of the
Clean Air Act Amendments of 1990 may voluntarily submit averified environmental compliance plan that sets forth the manner inwhich the public utility intends to comply with the requirements ofthe Clean Air Act Amendments of 1990 to the commission for thecommission's review and approval under this chapter.
(b) An environmental compliance plan described in subsection (a)must include any information that the commission may reasonablyrequire. The commission shall require a plan described in subsection(a) to include at least the following information:
(1) A description of the requirements of the Clean Air ActAmendments of 1990 applicable to each generating unit ownedor operated by the public utility.
(2) A description of the measures the public utility proposes toimplement to comply with the requirements.
(3) The schedule under which the public utility proposes toimplement the measures.
(4) An estimate of the cost of implementing each of themeasures proposed by the public utility.
(5) An analysis of the comparative estimated costs of meetingthe applicable requirements of the Clean Air Act Amendmentsof 1990 through the measures proposed by the public utility andother alternative compliance measures considered by the publicutility.
(6) For all compliance plans submitted to the commission afterJuly 1, 1993, if an environmental compliance plan proposes achange of fuel type from the fuel type consumed in the publicutility's generating units and that change of fuel type wouldresult in the displacement or diminished use of Indiana coalfrom the quantity of Indiana coal consumed by the public utilityduring the calendar year 1990, or an average of the quantity ofIndiana coal consumed by the utility in calendar years 1990,1991, and 1992, whichever is submitted by the utility in theplan, the public utility shall submit the following as part of theenvironmental compliance plan:
(A) An analysis of the following:
(i) The economic and employment effects of the proposedchange of fuel type on the regions of Indiana in which themining of coal provides employment, and on the serviceterritory of the public utility.
(ii) The effects of the proposed modification on thepreservation of the mining of Indiana coal as a viablesource of fuel.
The analyses required under this clause must include acomparison of the effects likely to result from the alternativecompliance measures identified under subdivision (5).
(B) Information describing the availability, the reliability,the current costs, and the projected future costs of the fueltype proposed for use in connection with the environmentalcompliance plan.
As added by P.L.76-1991, SEC.1. Amended by P.L.92-1993, SEC.3.
IC 8-1-27-7
Public hearing on plan; notice
Sec. 7. The commission shall hold a public hearing for eachenvironmental compliance plan submitted by a public utility underthis chapter. The public utility shall publish a notice of the filing ofits petition for approval of an environmental compliance plan in one(1) newspaper of general circulation published in each county inwhich the public utility renders service. The provisions ofIC 8-1-2-62 through IC 8-1-2-67 apply to a public hearing held underthis section.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-8
Order approving plan; conditions
Sec. 8. The commission shall issue an order approving anenvironmental compliance plan if the commission:
(1) finds that the environmental compliance plan:
(A) is reasonably designed to meet or exceed the applicablerequirements of the Clean Air Act Amendments of 1990;
(B) constitutes a reasonable and least cost strategy over thelife of the investment consistent with providing reliable,efficient, and economical electrical service;
(C) is in the public interest; and
(D) either:
(i) provides for continued or increased use of Indiana coalin the coal-consuming electric generating units owned oroperated by the public utility and affected by the Clean AirAct Amendments of 1990; or
(ii) if the plan does not provide for continued or increaseduse of Indiana coal, such nonprovision is justified byeconomic considerations including the effects in theregions of Indiana in which the mining of coal providesemployment and in the service territory of the publicutility; and
(2) approves the cost and schedule estimate for developing andimplementing the environmental compliance plan.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-9
Rejection of plan; modified plan; withdrawal of plan withoutprejudice
Sec. 9. (a) If the commission finds that an environmentalcompliance plan submitted by a public utility does not satisfy therequirements of section 8 of this chapter, the commission may rejectthe plan.
(b) If a public utility's environmental compliance plan is rejectedby the commission, the public utility may voluntarily submit to thecommission a modified plan intended to satisfy the requirements ofsection 8 of this chapter.
(c) A modified plan submitted under subsection (b) shall be
considered by the commission under sections 7 and 8 of this chapter.
(d) A public utility may withdraw a proposed environmentalcompliance plan without prejudice.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-10
Submission of plan to government environmental agency; conflicts
Sec. 10. A public utility shall submit its environmentalcompliance plan or modified environmental compliance plan to anyapplicable state government environmental agency on or before thedate that the public utility submits the plan to the commission underthis chapter. If there is a conflict between the commission and afederal or state government environmental agency concerning thenecessary components of a public utility's environmental complianceplan or modified environmental compliance plan, the determinationby the government environmental agency shall control.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-11
Modification of previously approved plan; review by commission
Sec. 11. If a public utility:
(1) chooses to; or
(2) because of action by a federal or state governmentenvironmental agency, is required to;
modify a part of an environmental compliance plan that haspreviously been approved by the commission to comply with therequirements of the Clean Air Act, the public utility shall submit amodified environmental compliance plan to the commission for thecommission's review. The conflict provisions of section 10 of thischapter apply to a modified environmental compliance plansubmitted under this section.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-12
Recovery of costs by public utility for capital projects orimplemented plan
Sec. 12. (a) If the commission issues an order approving anenvironmental compliance plan submitted by a public utility underthis chapter, the commission shall, absent fraud, concealment, grossmismanagement, or inadequate quality control, allow the publicutility to do the following:
(1) If a public utility is allowed by law to earn a return on thepublic utility's investment, the public utility may add to the fairvalue of the public utility's property the fair value of acompleted capital project, or part of a capital project, that:
(A) is constructed and consists of:
(i) new systems, equipment, or facilities; or
(ii) modifications to existing systems, equipment, orfacilities; and
(B) is part of the environmental compliance plan approved
by the commission;
up to the amount approved under section 8(2) or 13 of thischapter, whichever is applicable.
(2) The public utility may recover the costs incurred by thepublic utility in the development and implementation of theapproved environmental compliance plan up to the amountapproved under section 8(2) or 13 of this chapter, whichever isapplicable.
(b) The public utility may not recover costs in excess of the costestimate approved by the commission under section 8(2) or 13 of thischapter, whichever is applicable, unless the commission finds thatthe additional costs were necessary and prudent.
(c) Except as provided in subsection (d), costs otherwiserecoverable by a public utility under subsections (a) and (b) shall berecovered only through a general rate proceeding for the publicutility and, to the extent such costs provide the public utility with areturn of, or return on, the public utility's investment in a completedcapital project, or a part of a capital project, such costs shall be sorecovered only if the capital project, or part of the capital project, isfound by the commission to be used and useful.
(d) Costs otherwise recoverable by a public utility undersubsections (a) and (b) that also qualify for recovery underIC 8-1-2-6.6 shall be recovered by the public utility when and asprovided under IC 8-1-2-6.6.
(e) This section does not apply if the public utility elects thereview described in section 19 of this chapter.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-13
Revised cost and schedule estimate for developing andimplementing plan; submission to commission
Sec. 13. (a) If a public utility makes a substantial change in a costand schedule estimate for developing and implementing anenvironmental compliance plan or a modified environmentalcompliance plan after the estimate has been approved by thecommission under this chapter, the public utility shall file with thecommission for the commission's review and approval the revisedcost and schedule estimate.
(b) To the extent the commission approves a revised cost andschedule estimate, the estimate shall be the approved cost andschedule estimate for the plan.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-14
Plan exceeding Clean Air Act Amendments of 1990 requirements;credits or additional benefits
Sec. 14. If the commission finds that an environmentalcompliance plan or a modified environmental compliance planapproved by the commission under this chapter exceeds theapplicable requirements of the Clean Air Act Amendments of 1990
by means of early or over compliance, the commission shall, in theorder approving the plan, determine the manner and timing of theapplicable ratemaking and regulatory treatment of any emissioncredits or other additional benefits expected to result from the earlyor over compliance.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-15
General rate proceedings; consideration of change in risk to utilityfollowing approval of plan
Sec. 15. In a general rate proceeding following the issuance of anorder by the commission approving an environmental complianceplan under this chapter, the commission shall, in reviewing andauthorizing the public utility's return, give due consideration to anychange in risk to the public utility as a result of the commission'sapproval of the environmental compliance plan and include in theorder issued with respect to the general rate proceeding a finding onthe change.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-16
Utility's recovery of expenditures due to plan modification
Sec. 16. If the commission issues an order under sections 8, 11, or18 of this chapter that approves modifications to a public utility'senvironmental compliance plan, the commission shall, absent fraud,concealment, gross mismanagement, or inadequate quality control,allow the public utility to recover under sections 12(a) and 12(b) ofthis chapter, to the extent permitted under sections 12(a) and 12(b)of this chapter, the following:
(1) The public utility's expenditures made under theenvironmental compliance plan before the date the commissionissued the order approving the modified environmentalcompliance plan.
(2) The public utility's expenditures made under the modifiedenvironmental compliance plan after the date the commissionissued the order approving the modified environmentalcompliance plan.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-17
Recovery of costs incurred by utility in implementing measure setforth in plan but disapproved by commission upon review
Sec. 17. If a public utility cancels the implementation of ameasure set forth in an environmental compliance plan as a result ofan order issued by the commission under section 18 or 19 of thischapter that withdraws the commission's approval of the inclusion ofthe measure in the environmental compliance plan, the public utilitymay, absent fraud, concealment, gross mismanagement, orinadequate quality control, recover:
(1) over a reasonable time; and (2) through the rates of the public utility;
the costs incurred by the public utility in implementing the measureand a reasonable return on the unamortized balance, to the extent theimplementation and the costs were approved previously by thecommission. The public utility may not recover costs in excess of thecost estimate approved by the commission under section 8(2) or 13of this chapter, whichever is applicable, unless the commission findsthat the additional costs were necessary and prudent.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-18
Review of plan by commission; withdrawal of approval ormodification of plan
Sec. 18. (a) If the commission, after an investigation commencedupon its own initiative or upon a petition of the public utility or aclass of persons satisfying the standing requirements of IC 8-1-2-54(including the office of the utility consumer counselor), finds thatsubstantial changes:
(1) in the need for or estimated cost of an approvedenvironmental compliance plan have occurred; or
(2) in the estimated cost of alternative compliance measureshave occurred;
the commission may commence a review of the approval of theenvironmental compliance plan.
(b) If the commission finds that all or part of an environmentalcompliance plan no longer meets the requirements of section 8 of thischapter, the commission may, consistent with sections 8 and 10 ofthis chapter, issue an order:
(1) withdrawing the commission's approval of all or part of theenvironmental compliance plan, whichever is applicable; or
(2) approving modifications to the environmental complianceplan.
(c) If the commission approves modifications to an environmentalcompliance plan under subsection (b), the modified environmentalcompliance plan shall constitute the public utility's approvedenvironmental compliance plan for purposes of this chapter.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-19
Ongoing review of cost and implementation of plan; progressreport; recovery of costs; approval or disapproval by commission;effect
Sec. 19. (a) In addition to the review of the continuedappropriateness of an environmental compliance plan under section18 of this chapter, the commission shall, at the request of a publicutility, conduct an ongoing review of the cost and implementation ofthe public utility's approved environmental compliance plan. Thepublic utility that has filed a compliance plan under this chapter shallsubmit to the commission:
(1) each year; or (2) at other times the commission and the public utility agreeon;
a progress report that includes any information the commission mayrequire.
(b) If the commission approves the cost and implementation of thepart of the environmental compliance plan under review, then, absentfraud, concealment, or gross mismanagement, the approvalforecloses subsequent challenges to:
(1) the recovery in rates of those costs; and
(2) if the public utility is allowed by law to earn a return on thepublic utility's investment, the addition to fair value of thepublic utility's property of the fair value of a completed capitalproject, or part of a capital project, that:
(A) is constructed and consists of:
(i) new systems, equipment, or facilities; or
(ii) modifications to existing systems, equipment, orfacilities; and
(B) is part of the environmental compliance planimplementation approved by the commission;
up to the amount approved under section 8(2) or 13 of thischapter, whichever is applicable. The public utility may notrecover costs in excess of the cost estimate approved by thecommission under section 8(2) or 13 of this chapter, whicheveris applicable, unless the commission finds that the additionalcosts were necessary and prudent.
(c) If the commission does not issue an order disapproving all orpart of the implementation of the part of the environmentalcompliance plan under review within six (6) months of thecommencement of the commission's review, the commission shall beconsidered to have approved all of the implementation of that part ofthe environmental compliance plan, unless the commission issues anorder extending the time for such review.
(d) Except as provided in subsection (e), costs otherwiserecoverable by a public utility under subsection (b) shall berecovered only through a general rate proceeding for the publicutility and, to the extent such costs provide the public utility with areturn of, or a return on, the public utility's investment in a completedcapital project, or portion of a capital project, such costs shall be sorecovered only if the capital project, or portion of the capital project,is found by the commission to be used and useful.
(e) Costs otherwise recoverable by a public utility undersubsection (b) that also qualify for recovery under IC 8-1-2-6.6 shallbe recovered by the public utility when and as provided underIC 8-1-2-6.6.
(f) This section applies instead of sections 12 and 16 of thischapter for a public utility that elects the review described in thissection.
(g) If the commission disapproves all or part of theimplementation of the part of the environmental compliance planunder review: (1) the commission may, consistent with sections 8 and 10 ofthis chapter, issue an order withdrawing the commission'sapproval of all or part of the environmental compliance plan;and
(2) the public utility may voluntarily submit a modifiedenvironmental compliance plan to the commission for thecommission's review and approval under this chapter.
If the commission issues an order approving all or part of themodified environmental compliance plan, the environmentalcompliance plan constitutes the public utility's approvedenvironmental compliance plan for purposes of this chapter.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-20
Annual plan review; compliance with IC 8-1-27-8
Sec. 20. The commission shall annually review eachenvironmental compliance plan, the implementation of which hasresulted in the displacement or diminished use of Indiana coal anddetermine whether a different compliance measure would more fullysatisfy the requirements of section 8 of this chapter.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-21
Repealed
(Repealed by P.L.1-1992, SEC.32.)
IC 8-1-27-22
Contract for sale and purchase of coal; effect of chapter
Sec. 22. (a) This chapter does not give a party to a contract for thesale and purchase of coal any greater rights under a force majeureprovision of the contract than the party had before July 1, 1991.
(b) The commission may not implement this chapter in a way thatwould give a party to a contract for the sale and purchase of coal anygreater rights under a force majeure provision of the contract than theparty had before July 1, 1991.
(c) This chapter does not give the commission the authority toorder a public utility to cancel, terminate, amend, or otherwisemodify a contract for the purchase and sale of coal.
As added by P.L.76-1991, SEC.1.
IC 8-1-27-23
Voluntary nature of chapter procedures
Sec. 23. (a) Use of the procedures in this chapter is voluntary toa public utility. The failure of a public utility to use the approvalprovisions of this chapter may not create a presumption ofimprudence or nonrecovery in rates for environmental complianceplan costs.
(b) This chapter does not require a public utility to use thischapter to recover a cost or expense otherwise recoverable in thepublic utility's rates. A higher standard for the recovery of such costs
or for determining the appropriateness of an environmentalcompliance plan may not be imposed because of a public utility'selection not to use the provisions of this chapter.
(c) An order of the commission approving an environmentalcompliance plan under this chapter may not limit or define themeasures that may be proposed in a compliance plan submitted byanother public utility or approved by the commission.
As added by P.L.76-1991, SEC.1.