CHAPTER 8.8. UTILITY GENERATION AND CLEAN COAL TECHNOLOGY
IC 8-1-8.8
Chapter 8.8. Utility Generation and Clean Coal Technology
IC 8-1-8.8-1
Legislative findings and declaration of purpose
Sec. 1. (a) The general assembly makes the following findings:
(1) Growth of Indiana's population and economic base hascreated a need for new energy production or generatingfacilities in Indiana.
(2) The development of a robust and diverse portfolio of energyproduction or generating capacity, including coal gasificationand the use of renewable energy resources, is needed if Indianais to continue to be successful in attracting new businesses andjobs.
(3) Indiana has considerable natural resources that are currentlyunderutilized and could support development of new energyproduction or generating facilities, including coal gasificationfacilities, at an affordable price.
(4) Certain regions of the state, such as southern Indiana, couldbenefit greatly from new employment opportunities created bydevelopment of new energy production or generating facilitiesutilizing the plentiful supply of coal from the geologicalformation known as the Illinois basin.
(5) Technology can be deployed that allows high sulfur coalfrom the geological formation known as the Illinois Basin to beburned or gasified efficiently while meeting strict state andfederal air quality limitations. Specifically, the state shouldencourage the use of advanced clean coal technology, such ascoal gasification.
(6) It is in the public interest for the state to encourage theconstruction of new energy production or generating facilitiesthat increase the in-state capacity to provide for current andanticipated energy demand at a competitive price.
(b) The purpose of this chapter is to enhance Indiana's energysecurity and reliability by ensuring all of the following:
(1) Indiana's energy production or generating capacity continuesto be adequate to provide for Indiana's current and future energyneeds, including the support of the state's economicdevelopment efforts.
(2) The vast and underutilized coal resources of the IllinoisBasin are used as a fuel source for new energy production orgenerating facilities.
(3) The electric transmission and gas transportation systemswithin Indiana are upgraded to distribute additional amounts ofelectricity and gas more efficiently.
(4) Jobs are created as new energy production or generatingfacilities are built in regions throughout Indiana.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,SEC.11.
IC 8-1-8.8-2
"Clean coal and energy projects" defined
Sec. 2. As used in this chapter, "clean coal and energy projects"means any of the following:
(1) Any of the following projects:
(A) Projects at new energy production or generatingfacilities that employ the use of clean coal technology andthat produce energy, including substitute natural gas,primarily from coal or gases, derived from coal from thegeological formation known as the Illinois Basin.
(B) Projects to provide advanced technologies that reduceregulated air emissions from existing energy production orgenerating plants that are fueled primarily by coal or gasesfrom coal from the geological formation known as theIllinois Basin, such as flue gas desulfurization and selectivecatalytic reduction equipment.
(C) Projects to provide electric transmission facilities toserve a new energy production or generating facility.
(D) Projects that produce substitute natural gas from Indianacoal by construction and operation of a coal gasificationfacility.
(2) Projects to develop alternative energy sources, includingrenewable energy projects and coal gasification facilities.
(3) The purchase of fuels produced by a coal gasificationfacility.
(4) Projects described in subdivisions (1) through (3) that usecoal bed methane.
As added by P.L.159-2002, SEC.6. Amended by P.L.174-2005,SEC.2; P.L.175-2007, SEC.12.
IC 8-1-8.8-3
"Clean coal technology" defined
Sec. 3. As used in this chapter, "clean coal technology" means atechnology (including precombustion treatment of coal):
(1) that is used in a new or existing energy production orgenerating facility and directly or indirectly reduces or avoidsairborne emissions of sulfur, mercury, or nitrogen oxides orother regulated air emissions associated with the combustion oruse of coal; and
(2) that either:
(A) was not in general commercial use at the same or greaterscale in new or existing facilities in the United States at thetime of enactment of the federal Clean Air Act Amendmentsof 1990 (P.L.101-549); or
(B) has been selected by the United States Department ofEnergy for funding or loan guaranty under an InnovativeClean Coal Technology or loan guaranty program under theEnergy Policy Act of 2005, or any successor program, andis finally approved for such funding or loan guaranty on orafter the date of enactment of the federal Clean Air Act
Amendments of 1990 (P.L.101-549).
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,SEC.13.
IC 8-1-8.8-4
"Coal gasification facility" defined
Sec. 4. As used in this chapter, "coal gasification facility" meansa facility in Indiana that uses a manufacturing process that convertscoal into a clean gas that can be used as a fuel to generate energy orsubstitute natural gas.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,SEC.14.
IC 8-1-8.8-5
"Costs associated with qualified utility system property" defined
Sec. 5. As used in this chapter, "costs associated with qualifiedutility system property" means capital, operation, maintenance,depreciation, tax costs, and financing costs of or for qualified utilitysystem property.
As added by P.L.159-2002, SEC.6.
IC 8-1-8.8-6
"Eligible business" defined
Sec. 6. As used in this chapter, "eligible business" means anenergy utility (as defined in IC 8-1-2.5-2) or owner of a coalgasification facility that:
(1) proposes to construct or repower a new energy productionor generating facility;
(2) proposes to construct or repower a project described insection 2(1) or 2(2) of this chapter;
(3) undertakes a project to develop alternative energy sources,including renewable energy projects; or
(4) purchases fuels produced by a coal gasification facility.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,SEC.15.
IC 8-1-8.8-7
"Group" defined
Sec. 7. As used in this chapter, "group" refers to the forecastinggroup established by IC 8-1-8.5-3.5.
As added by P.L.159-2002, SEC.6.
IC 8-1-8.8-8
"New energy generating facility" defined
Sec. 8. (a) As used in this chapter, "new energy generatingfacility" refers to a generation or coal gasification facility thatsatisfies all of the following:
(1) The facility produces energy primarily from coal or gasesfrom coal from the geological formation known as the IllinoisBasin. (2) The facility is a:
(A) newly constructed or newly repowered energygeneration plant; or
(B) newly constructed generation capacity expansion at anexisting facility;
dedicated primarily to serving Indiana retail customers.
(3) The repowering, construction, or expansion of the facilitywas begun by an Indiana utility after July 1, 2002.
(4) Except for a facility that is a clean coal and energy projectunder section 2(2) of this chapter, the facility has an aggregaterated electric generating capacity of at least one hundred (100)megawatts for all units at one (1) site or a generating capacityof at least four hundred thousand (400,000) pounds per hour ofsteam.
(b) The term includes the transmission lines, gas transportationfacilities, and associated equipment employed specifically to servea new energy generating or coal gasification facility.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,SEC.16.
IC 8-1-8.8-9
"Qualified utility system property" defined
Sec. 9. As used in this chapter, "qualified utility system property"means any new energy generating or coal gasification facility used,or to be used, in whole or in part, by an energy utility to provideretail energy service (as defined in IC 8-1-2.5-3) regardless ofwhether that service is provided under IC 8-1-2.5 or anotherprovision of this article.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,SEC.17.
IC 8-1-8.8-10 Version a
"Renewable energy resources" defined
Note: This version of section effective until 1-1-2011. See alsofollowing version of this section, effective 1-1-2011.
Sec. 10. (a) As used in this chapter, "renewable energy resources"means alternative sources of renewable energy, including thefollowing:
(1) Energy from wind.
(2) Solar energy.
(3) Photovoltaic cells and panels.
(4) Dedicated crops grown for energy production.
(5) Organic waste biomass, including any of the followingorganic matter that is available on a renewable basis:
(A) Agricultural crops.
(B) Agricultural wastes and residues.
(C) Wood and wood wastes, including the following:
(i) Wood residues.
(ii) Forest thinnings.
(iii) Mill residue wood. (iv) Waste from clean construction and demolition.
(D) Animal wastes.
(E) Aquatic plants.
(6) Hydropower from existing dams.
(7) Fuel cells.
(8) Energy from waste to energy facilities.
(9) Energy storage systems.
(b) Except for energy described in subsection (a)(8), the term doesnot include energy from the incinerations, burning, or heating of anyof the following:
(1) Tires.
(2) General household, institutional, commercial, industriallunchroom, office, or landscape waste.
(c) The term excludes treated or painted lumber.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,SEC.18; P.L.151-2009, SEC.4.
IC 8-1-8.8-10 Version b
"Renewable energy resources" defined
Note: This version of section effective 1-1-2011. See alsopreceding version of this section, effective until 1-1-2011.
Sec. 10. (a) As used in this chapter "renewable energy resources"means alternative sources of renewable energy, including thefollowing:
(1) Energy from wind.
(2) Solar energy.
(3) Photovoltaic cells and panels.
(4) Dedicated crops grown for energy production.
(5) Organic waste biomass, including any of the followingorganic matter that is available on a renewable basis:
(A) Agricultural crops.
(B) Agricultural wastes and residues.
(C) Wood and wood wastes, including the following:
(i) Wood residues.
(ii) Forest thinnings.
(iii) Mill residue wood.
(D) Animal wastes.
(E) Animal byproducts.
(F) Aquatic plants.
(G) Algae.
(6) Hydropower from existing dams.
(7) Fuel cells.
(8) Energy from waste to energy facilities.
(9) Energy storage systems.
(b) Except for energy described in subsection (a)(8), the term doesnot include energy from the incinerations, burning, or heating of anyof the following:
(1) Tires.
(2) General household, institutional, commercial, industriallunchroom, office, or landscape waste. (c) The term excludes treated or painted lumber.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,SEC.18; P.L.151-2009, SEC.4; P.L.95-2010, SEC.1.
IC 8-1-8.8-11
Incentives for clean coal and energy projects; application tocommission; commission's time for determining eligibility
Sec. 11. (a) The commission shall encourage clean coal andenergy projects by creating the following financial incentives forclean coal and energy projects, if the projects are found to bereasonable and necessary:
(1) The timely recovery of costs incurred during constructionand operation of projects described in section 2(1) or 2(2) ofthis chapter.
(2) The authorization of up to three (3) percentage points on thereturn on shareholder equity that would otherwise be allowedto be earned on projects described in subdivision (1).
(3) Financial incentives for the purchase of fuels produced bya coal gasification facility, including cost recovery and theincentive available under subdivision (2).
(4) Financial incentives for projects to develop alternativeenergy sources, including renewable energy projects.
(5) Other financial incentives the commission considersappropriate.
(b) An eligible business must file an application to thecommission for approval of a clean coal and energy project underthis section. This chapter does not relieve an eligible business of theduty to obtain any certificate required under IC 8-1-8.5 or IC 8-1-8.7.An eligible business seeking a certificate under IC 8-1-8.5 orIC 8-1-8.7 and this chapter for one (1) project may file a singleapplication for all necessary certificates. If a single application isfiled, the commission shall consider all necessary certificates at thesame time.
(c) The commission shall promptly review an application filedunder this section for completeness. The commission may requestadditional information the commission considers necessary to aid inits review.
(d) The commission shall, after notice and hearing, issue adetermination of a project's eligibility for the financial incentivesdescribed in subsection (a) not later than one hundred twenty (120)days after the date of the application, unless the commission findsthat the applicant has not cooperated fully in the proceeding.
As added by P.L.159-2002, SEC.6.
IC 8-1-8.8-12
Recovery of costs; rate adjustment mechanisms
Sec. 12. (a) The commission shall provide financial incentives toeligible businesses for new energy producing and generatingfacilities in the form of timely recovery of the costs incurred inconnection with the construction, repowering, expansion, operation,
or maintenance of the facilities.
(b) An eligible business seeking authority to timely recover thecosts described in subsection (a) must apply to the commission forapproval of a rate adjustment mechanism in the manner determinedby the commission.
(c) An application must include the following:
(1) A schedule for the completion of construction, repowering,or expansion of the new energy generating or coal gasificationfacility for which rate relief is sought.
(2) Copies of the most recent integrated resource plan filed withthe commission, if applicable.
(3) The amount of capital investment by the eligible business inthe new energy generating or coal gasification facility.
(4) Other information the commission considers necessary.
(d) The commission shall allow an eligible business to recover thecosts associated with qualified utility system property if the eligiblebusiness provides substantial documentation that the expected costsassociated with qualified utility system property and the schedule forincurring those costs are reasonable and necessary.
(e) The commission shall allow an eligible business to recover thecosts associated with the purchase of fuels produced by a coalgasification facility if the eligible business provides substantialdocumentation that the costs associated with the purchase arereasonable and necessary.
(f) A retail rate adjustment mechanism proposed by an eligiblebusiness under this section may be based on actual or forecasteddata. If forecast data is used, the retail rate adjustment mechanismmust contain a reconciliation mechanism to correct for any variancebetween the forecasted costs and the actual costs.
As added by P.L.159-2002, SEC.6. Amended by P.L.175-2007,SEC.19.
IC 8-1-8.8-13
Monthly report to lieutenant governor required
Sec. 13. An eligible business shall file a monthly report with thelieutenant governor stating the following information:
(1) The amount of Illinois Basin coal, if any, purchased duringthe previous month for use in a new energy generating or coalgasification facility.
(2) The amount of any fuel produced by a coal gasificationfacility and purchased by the eligible business during theprevious month.
(3) Any other information the lieutenant governor mayreasonably require.
As added by P.L.159-2002, SEC.6. Amended by P.L.1-2006,SEC.151; P.L.175-2007, SEC.20.
IC 8-1-8.8-14
Annual study of using renewable energy resources
Sec. 14. The group shall conduct an annual study on the use,
availability, and economics of using renewable energy resources inIndiana. Each year, the group shall submit a report on the study to thecommission for inclusion in the commission's annual report to theregulatory flexibility committee described in IC 8-1-2.5-9 andIC 8-1-2.6-4. The report must include suggestions from the group toencourage the development and use of renewable energy resourcesand technologies appropriate for use in Indiana. In formulating thesuggestions, the group shall evaluate potential renewable energygeneration opportunities from biomass and algae production systems.
As added by P.L.159-2002, SEC.6. Amended by P.L.71-2009, SEC.2.
IC 8-1-8.8-15
Commission's power to review approved projects
Sec. 15. The commission may review any project approved underthis chapter to determine that the project continues to comply withthe commission's order initially approving incentives under thischapter. The commission may revoke any incentive approved in theorder if the commission finds that the project no longer complieswith the provisions of the order concerning the incentive.
As added by P.L.159-2002, SEC.6.