§ 8-1-2.4-4 — Electric and steam utilities required to enter into purchase contracts; rates for new and existing facilities; utilities not required to construct additional facilities or distribute power from private generation projects; commission review of utilities' rates for supplemental or backup power

Indiana § 8-1-2.4-4

• Jurisdiction: Indiana
• Art. 1: UTILITIES GENERALLY
• Ch. 2.4: Alternate Energy Production, Cogeneration, and Small

Text

(a) Subject to section 5 of this chapter, the
commission shall require electric utilities and steam utilities to enter
into long term contracts to:
(1) purchase or wheel electricity or useful thermal energy from
alternate energy production facilities, cogeneration facilities, or
small hydro facilities located in the utility's service territory,
under the terms and conditions that the commission finds:
(A) are just and economically reasonable to the corporation's
ratepayers;
(B) are nondiscriminatory to alternate energy producers,
cogenerators, and small hydro producers; and
(C) will further the policy stated in section 1 of this chapter;
and
(2) provide for the availability of supplemental or backup power
to alternate energy production facilities, cogeneration facilities, or
small hydro facilities on a nondiscriminatory basis and at just and
reasonable rates.
(b) Upon application by the owner or operator of any alternate
energy production facility, cogeneration facility, or small hydro facility
or any interested party, the commission shall establish for the affected
utility just and economically reasonable rates for electricity purchased
under subsection (a)(1). The rates shall be established at levels
sufficient to stimulate the development of alternate energy production,
cogeneration, and small hydro facilities in Indiana, and to encourage
the continuation of existing capacity from those facilities.
(c) The commission shall base the rates for new facilities or new
capacity from existing facilities on the following factors:
(1) The estimated capital cost of the next generating plant,
including related transmission facilities, to be placed in service by
the utility.
(2) The term of the contract between the utility and the seller.
(3) A levelized annual carrying charge based upon the term of the
contract and determined in a manner consistent with both the
methods and the current interest or return requirements associated
with the utility's new construction program.
(4) The utility's annual energy costs, including current fuel costs,
related operation and maintenance costs, and any other
energy-related costs considered appropriate by the commission.
(d) The commission shall base the rates for existing facilities on the
factors listed in subsection (c). However, the commission shall also
consider the original cost less depreciation of existing facilities and
may establish a rate for existing facilities that is less than the rate
established for new facilities.
(e) In the case of a utility that purchases all or substantially all of its
electricity requirements, the rates established under this section must
be equal to the current cost to the utility of similar types and quantities
of electrical service.
(f) In lieu of the other procedures provided by this section, a utility
and an owner or operator of an alternate energy production facility,
cogeneration facility, or small hydro facility may enter into a long term
contract in accordance with subsection (a) and may agree to rates for
purchase and sale transactions. A contract entered into under this
subsection must be filed with the commission in the manner provided
by IC 8-1-2-42.
(g) This section does not require an electric utility or steam utility
to:
(1) construct any additional facilities unless those facilities are
paid for by the owner or operator of the affected alternate energy
production facility, cogeneration facility, or small hydro facility;
or
(2) distribute, transmit, deliver, or wheel electricity from a private
generation project.
As added by Acts 1982, P.L.72, SEC.1. Amended by
P.L.264-2017, SEC.3; P.L.156-2020, SEC.34.