§ 8-1-2-6 — Valuation of property

Indiana § 8-1-2-6

• Jurisdiction: Indiana
• Art. 1: UTILITIES GENERALLY
• Ch. 2: Utility Regulation

Text

(a) The commission shall value all property of
every public utility actually used and useful for the convenience of the
public at its fair value, giving such consideration as it deems
appropriate in each case to all bases of valuation which may be
presented or which the commission is authorized to consider by the
following provisions of this section. As one of the elements in such
valuation the commission shall give weight to the reasonable cost of
bringing the property to its then state of efficiency. In making such
valuation, the commission may avail itself of any information in
possession of the department of local government finance or of any
local authorities. The commission may accept any valuation of the
physical property made by the interstate commerce commission of any
public utility subject to the provisions of this act.
(b) The lands of such public utility shall not be valued at a greater
amount than the assessed value of said lands exclusive of
improvements as valued for taxation. In making such valuation no
account shall be taken of presumptive value resting on natural
resources independent of any structures in relation thereto, the natural
resource itself shall be viewed as the public's property. No account
shall be taken of good will for presumptive values growing out of the
operation of any utility as a going concern, all such values to rest with
the municipality by reason of the special and exclusive grants given
such utility enterprises. Except in a proceeding under IC 8-1-30, and
except as provided in IC 8-1-30.3-5 and IC 8-1.5-2-6.1, no account
shall be taken of construction costs unless such costs were actually
incurred and paid as part of the cost entering into the construction of
the utility. Except in a proceeding under IC 8-1-30, and except as
provided in IC 8-1-30.3-5 and IC 8-1.5-2-6.1, all public utility
valuations shall be based upon tangible property, that is, such property
as has value by reason of construction costs, either in materials
purchased or in assembling of materials into structures by the labor of
workers and the services of superintendents, including engineers, legal
and court costs, accounting systems and transportation costs, and also
including insurance and interest charges on capital accounts during the
construction period. As an element in determining value the
commission may also take into account reproduction costs at current
prices, less depreciation, based on the items set forth in the last
sentence hereof and shall not include good will, going value, or natural
resources.
(c) In determining the amount of allowable operating expenses of a
utility, the commission may not take into consideration or approve any
expense for institutional or image building advertising, charitable
contributions, or political contributions.
Formerly: Acts 1913, c.76, s.9; Acts 1933, c.190, s.4; Acts
1947, c.307, s.1. As amended by Acts 1979, P.L.85, SEC.1;
P.L.90-2002, SEC.309; P.L.98-2016, SEC.1; P.L.9-2024,
SEC.280.