§ 8-1-8.5-10 — Energy efficiency goals and programs; evaluation, measurement, and verification; recovery of program costs; opt out by industrial customers

Indiana § 8-1-8.5-10

• Jurisdiction: Indiana
• Art. 1: UTILITIES GENERALLY
• Ch. 8.5: Electric Utility Resource Planning and Certification

Text

(a) For purposes of this section, "electricity
supplier" means a public utility (as defined in IC 8-1-2-1) that furnishes
retail electric service to customers in Indiana. The term does not
include a utility that is:
(1) a municipally owned utility (as defined in IC 8-1-2-1(h));
(2) a corporation organized under IC 8-1-13;
(3) a corporation organized under IC 23-17 that is an electric
cooperative and that has at least one (1) member that is a
corporation organized under IC 8-1-13; or
(4) a joint agency created under IC 8-1-2.2-8.
(b) For purposes of this section, "energy efficiency" means a
reduction in electricity use for a comparable level of electricity service.
(c) For purposes of this section, "energy efficiency goals" means all
energy efficiency produced by cost effective plans that are:
(1) reasonably achievable;
(2) consistent with an electricity supplier's integrated resource
plan; and
(3) designed to achieve an optimal balance of energy resources in
an electricity supplier's service territory.
(d) For purposes of this section, "energy efficiency program" or
"program" means a program that is:
(1) sponsored by an electricity supplier; and
(2) designed to implement energy efficiency improvements.
The term does not include a program designed primarily to reduce
demand for limited intervals of time, such as during peak electricity
usage or emergency conditions.
(e) For purposes of this section, "lost revenues" means the
difference, if any, between:
(1) revenues lost; and
(2) the variable operating and maintenance costs saved;
by an electricity supplier as a result of implementing energy efficiency
programs.
(f) For purposes of this section, "plan" refers to the goals, programs,
program budgets, program costs, and procedures submitted by an
electricity supplier to the commission under subsection (h).
(g) For purposes of this section, "program costs" include the
following:
(1) Direct and indirect costs of energy efficiency programs.
(2) Costs associated with the evaluation, measurement, and
verification of program results.
(3) Other recoveries or incentives approved by the commission,
including lost revenues and financial incentives approved by the
commission under subsection (o).
(h) Beginning not later than calendar year 2017, and not less than
one (1) time every three (3) years, an electricity supplier shall petition
the commission for approval of a plan that includes:
(1) energy efficiency goals;
(2) energy efficiency programs to achieve the energy efficiency
goals;
(3) program budgets and program costs; and
(4) evaluation, measurement, and verification procedures that
must include independent evaluation, measurement, and
verification.
An electricity supplier may submit a plan required under this
subsection to the commission for a determination of the overall
reasonableness of the plan either as part of a general basic rate
proceeding or as an independent proceeding. A petition submitted
under this subsection may include a home energy efficiency assistance
program for qualified customers of the electricity supplier whether or
not the program is cost effective. The commission shall make the
petition and its disclosable contents available through the commission's
website.
(i) At the same time an electricity supplier petitions the commission
under subsection (h), the electricity supplier shall:
(1) provide a copy of the petition and plan to the office of utility
consumer counselor; and
(2) post an electronic copy of the petition and plan on the
electricity supplier's website. The electricity supplier may redact
confidential or proprietary information.
(j) In making a determination of the overall reasonableness of a plan
submitted under subsection (h), the commission shall consider the
following:
(1) Projected changes in customer consumption of electricity
resulting from the implementation of the plan.
(2) A cost and benefit analysis of the plan, including the
likelihood of achieving the goals of the energy efficiency
programs included in the plan.
(3) Whether the plan is consistent with the following:
(A) The state energy analysis developed by the commission
under section 3 of this chapter.
(B) The electricity supplier's most recent long range integrated
resource plan submitted to the commission.
(4) The inclusion and reasonableness of procedures to evaluate,
measure, and verify the results of the energy efficiency programs
included in the plan, including the alignment of the procedures
with applicable environmental regulations, including federal
regulations concerning credits for emission reductions.
(5) Any undue or unreasonable preference to any customer class
resulting, or potentially resulting, from the implementation of an
energy efficiency program or from the overall design of a plan.
(6) Comments provided by customers, customer representatives,
the office of utility consumer counselor, and other stakeholders
concerning the adequacy and reasonableness of the plan,
including alternative or additional means to achieve energy
efficiency in the electricity supplier's service territory.
(7) The effect, or potential effect, in both the long term and the
short term, of the plan on the electric rates and bills of customers
that participate in energy efficiency programs compared to the
electric rates and bills of customers that do not participate in
energy efficiency programs.
(8) The lost revenues and financial incentives associated with the
plan and sought to be recovered or received by the electricity
supplier.
(9) The electricity supplier's current integrated resource plan and
the underlying resource assessment.
(10) Any other information the commission considers necessary.
(k) If, after notice and hearing, the commission determines that an
electricity supplier's plan is reasonable in its entirety, the commission
shall:
(1) approve the plan in its entirety;
(2) allow the electricity supplier to recover all associated program
costs on a timely basis through a periodic rate adjustment
mechanism; and
(3) allocate and assign costs associated with a program to the
class or classes of customers that are eligible to participate in the
program.
(l) If, after notice and hearing, the commission determines that an
electricity supplier's plan is not reasonable because the costs associated
with one (1) or more programs included in the plan exceed the
projected benefits of the program or programs, the commission:
(1) may exclude the program or programs and approve the
remainder of the plan; and
(2) shall allow the electricity supplier to recover only those
program costs associated with the portion of the plan approved
under subdivision (1) on a timely basis through a periodic rate
adjustment mechanism.
(m) If, after notice and hearing, the commission determines that an
electricity supplier's plan is not reasonable in its entirety, the
commission shall issue an order setting forth the reasons supporting its
determination. The electricity supplier shall submit a modified plan
within a reasonable time. After notice and hearing, the commission
shall issue an order approving or denying the modified plan. If the
commission approves the modified plan, the commission shall allow
the electricity supplier to recover program costs associated with the
modified plan on a timely basis through a periodic rate adjustment
mechanism.
(n) The commission may not:
(1) require an energy efficiency program to be implemented by a
third party administrator; or
(2) in making a determination of reasonableness under subsection
(j), consider whether a third party administrator implements an
energy efficiency program.
(o) If the commission finds a plan submitted by an electricity
supplier under subsection (h) to be reasonable, the commission shall
allow the electricity supplier to recover or receive the following:
(1) Reasonable financial incentives that:
(A) encourage implementation of cost effective energy
efficiency programs; or
(B) eliminate or offset regulatory or financial bias:
(i) against energy efficiency programs; or
(ii) in favor of supply side resources.
(2) Reasonable lost revenues.
A retail rate adjustment mechanism proposed by an electricity supplier
under this section to implement the timely recovery of program costs
(including reasonable lost revenues) may be based on a reasonable
forecast, with consideration given to the electricity supplier's historical
lost revenue forecasting accuracy. If forecasted data is used, the retail
rate adjustment mechanism must include a reconciliation mechanism
to correct for any variance between the forecasted program costs
(including reasonable lost revenues and financial incentives) and the
actual program costs (including reasonable lost revenues and financial
incentives based on the evaluation, measurement, and verification of
the energy efficiency programs under the plan).
(p) An industrial customer (as defined in section 9(e) of this
chapter) may opt out of an electricity supplier's plan under this section
by following the procedure set forth in section 9(f) and 9(g) of this
chapter. The opt out of an industrial customer who has previously
complied with the procedure set forth in section 9(f) of this chapter
constitutes an opt out of an electricity supplier's plan under this section.
An industrial customer may follow the procedure set forth in section
9(g) of this chapter to opt back in.
(q) The commission shall adopt:
(1) rules under IC 4-22-2; or
(2) guidelines;
to assist electricity suppliers and industrial customers in complying
with this section.

Legislative History

As added by P.L.246-2015, SEC.4. Amended by P.L.1-2025, SEC.117.