§ 8-1-37-13 — Shareholder financial incentive; periodic rate adjustment mechanism for cost recovery; application to commission; commission's determination; duration of incentive; duration of periodic rate adjustment mechanism

(a) The commission may establish a
shareholder incentive consisting of the authorization of an increased
overall rate of return on equity, not to exceed fifty (50) basis points
over a participating electricity supplier's authorized rate of return,
whenever the participating electricity supplier attains a CPS goal set
forth in section 12(a) of this chapter. The number of additional basis
points authorized by the commission under this subsection may:
(1) be different for each of the CPS goal periods identified in
section 12(a) of this chapter, as the commission determines is
appropriate; and
(2) in the case of a particular participating electricity supplier, be
based on the extent to which the participating electricity supplier
met a particular CPS goal using clean energy resources listed in
section 4(a)(1) through 4(a)(16) of this chapter.
The additional basis points authorized by the commission under this
subsection for each CPS goal period are not cumulative. In determining
a participating electricity supplier's authorized rate of return to which
additional basis points may be added upon the participating electricity
supplier's achievement of a particular CPS goal, the commission shall
not include as part of the authorized rate of return any additional basis
points awarded to the participating electricity supplier for having
achieved the immediately preceding CPS goal.
(b) If the commission approves an electricity supplier's application
under section 11(c) of this chapter, the commission shall authorize the
incentive described in subsection (a) and the recovery of costs, by
means of a periodic rate adjustment mechanism, as described in
subsection (c), based on the following considerations:
(1) The sharing of achieved savings or as a percentage of costs.
(2) Avoided costs resulting from achieving demand side
management or energy efficiency targets.
(3) The recovery of lost revenues associated with implementation
of demand side management or energy efficiency initiatives.
(4) The designation of electricity produced or conserved by a
clean energy resource as an energy savings for purposes of any
initiative, rule, or order approved by the commission to promote
the efficient use and production of electricity, including initiatives
to implement demand side management, energy efficiency, or
conservation measures in accordance with commission rules.
(c) If the commission approved an electricity supplier's application
under section 11(c) of this chapter, the commission shall permit the
recovery, by means of a periodic rate adjustment mechanism, of all
just, reasonable, and necessary program costs incurred by a
participating electricity supplier in:
(1) constructing, operating, or maintaining facilities that generate
clean energy that:
(A) is used by the participating electricity supplier in its efforts
to meet a CPS goal set forth in section 12(a) of this chapter; and
(B) meets the requirements set forth in section 12(c) of this
chapter; or
(2) otherwise generating or purchasing clean energy that is used
by the participating electricity supplier in its efforts to meet a CPS
goal set forth in section 12(a) of this chapter.
For purposes of this subsection and subsection (h)(1), "program costs"
includes administrative costs, ancillary costs, capacity costs, costs
associated with CECs, capital costs, depreciation costs, tax costs, and
financing costs incurred in connection with an activity described in
subdivision (1) or (2).
(d) A participating electricity supplier that seeks an incentive
established by the commission under subsection (a) or a periodic rate
adjustment mechanism established by the commission under subsection
(c) must apply to the commission:
(1) in the manner and on a form prescribed by the commission;
and
(2) not later than any dates specified by the commission in rules
adopted under section 10 of this chapter;
for approval for the incentive or periodic rate adjustment mechanism
sought.
(e) The commission shall review an application filed under this
section for completeness. The commission may request additional
information the commission considers necessary to aid in the
commission's review.
(f) The commission shall, after notice and hearing, issue a
determination of a participating electricity supplier's eligibility for the
financial incentive or periodic rate adjustment mechanism sought. The
commission shall issue a determination under this subsection not later
than one hundred twenty (120) days after the date of the application,
unless the commission finds that the applicant has not cooperated fully
in the proceeding.
(g) Subject to the participating electricity supplier's continuing
compliance with the applicable CPS goal, as determined according to
the measurement and evaluation procedures described in section
10(b)(1)(B) of this chapter, a shareholder incentive described in
subsection (a) continues in effect until the earlier of the following:
(1) A time or upon an event specified in the commission's order
approving the shareholder incentive.
(2) The commission issues a new order authorizing the
participating electricity supplier to receive a shareholder incentive
for meeting the next CPS program goal.
(h) Subject to the participating electricity supplier's continuing
compliance with the applicable CPS goal, as determined according to
the measurement and evaluation procedures described in section
10(b)(1)(B) of this chapter, a periodic rate adjustment mechanism
described in subsection (c) continues in effect until the earlier of the
following:
(1) The participating electricity supplier has recovered the
program costs for which the periodic rate adjustment mechanism
was allowed.
(2) A time or upon an event specified in the commission's order
approving the periodic rate adjustment mechanism.

Legislative History

As added by P.L.150-2011, SEC.16. Amended by P.L.83-2023, SEC.7.