Section 8-1-8.5-10 - Energy efficiency goals and programs; evaluation, measurement, and verification; recovery of program costs; opt out by industrial customers(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: (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 Internet web site.
(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 Internet web site. 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.
Added by P.L. 246-2015, SEC. 4, eff. 5/6/2015.