§ 8-1-13-17 — Services, facilities, and charges; sinking fund; REA borrowers

(a) A corporation shall furnish reasonably
adequate services and facilities. The charge made by any corporation
for any service rendered or to be rendered, either directly or in
connection therewith, shall be nondiscriminatory, reasonable, and just,
and every discriminatory, unjust, or unreasonable charge for the service
is prohibited.
(b) A reasonable and just charge for service within the meaning of
this section are charges that produce sufficient revenue:
(1) to pay all legal and other necessary expense incident to the
operation of its system, to include maintenance cost, operating
charges, upkeep, depreciation and amortization, repairs, and
interest charges on bonds or other obligations;
(2) to provide a sinking fund for the liquidation of bonds or other
evidences of indebtedness;
(3) to provide adequate funds to be used as working capital, as
well as funds for making extensions and replacements (to the
extent not provided for through depreciation);
(4) to meet reasonable financial agreements entered into by the
corporation in the process of securing capital; and
(5) for the payment of any taxes that may be assessed against the
corporation or its property.
(c) The purpose of this section is to ensure that the charges produce
an income sufficient to maintain the corporation property in a sound
physical and financial condition to render adequate and efficient
service. Any rate too low to meet the requirements of this section is
unlawful.
(d) Revenues and receipts not needed for the purposes of this
section shall be returned to the members on an equitable basis, either
in cash or in abatement of current charges for energy, as the board may
decide.
(e) As used in subsections (g) and (h), "financial assistance" means:
(1) a loan or loan guarantee; or
(2) a lien accommodation provided to secure a loan made by
another lender;
that is made by the Rural Electrification Administration of the United
States Department of Agriculture (REA).
(f) As used in subsections (g) and (h), "REA borrower" means a
corporation created under this chapter that is the recipient of financial
assistance.
(g) In determining rates under this section, once the commission
determines that property of an REA borrower is reasonably necessary
for the provision of electric service and has been placed in service, the
commission shall approve rates to be charged by the REA borrower
sufficient to enable the REA borrower to:
(1) satisfy its reasonable expenses and obligations; and
(2) repay the full amount of any financial assistance and the
interest thereon.
(h) So long as there remains any unpaid portion of any financial
assistance associated with the property of an REA borrower determined
under subsection (g) to be reasonably necessary and placed in service,
the rates of the REA borrower shall be set at a level sufficient to repay
the financial assistance, regardless of any change in the regulatory
status of the property, including, without limitation, the full or partial
retirement of the property or any other change in the status of the
property as reasonably necessary or used and useful.
(i) Subsections (g) and (h) do not apply to a corporation that is not
created under this chapter, whether or not the rates of the corporation
are set by the commission under this section.
Formerly: Acts 1935, c.175, s.17. As amended by P.L.121-1987,
SEC.2; P.L.109-1989, SEC.4; P.L.74-1991, SEC.2; P.L.1-1992,
SEC.31.