Ind. Code ch. 8-1-31

Ind. Code ch. 8-1-31
in effect

Ind. Code § 8-1-31-1 Applicability of definitions

Sec. 1. The definitions in IC 8-1-2-1 apply throughout this chapter. As added by P.L.94-2000, SEC.1.

Ind. Code § 8-1-31-1.3 "Adjustment amount"

Sec. 1.3. As used in this chapter, "adjustment amount" means the amount proposed in a petition filed under section 8 of this chapter to allow the adjustment of an eligible utility's basic rates and charges to provide for recovery of infrastructure improvement costs. As added by P.L.209-2014, SEC.1. Amended by P.L.212-2015, SEC.1.

Ind. Code § 8-1-31-1.5 "Adjustment revenues"

Sec. 1.5. As used in this chapter, "adjustment revenues" means revenues produced through an adjustment amount approved under section 9 of this chapter exclusive of revenues from all other rates and charges. As added by P.L.209-2014, SEC.2.

Ind. Code § 8-1-31-5 "Eligible infrastructure improvements"

Sec. 5. As used in this chapter, "eligible infrastructure improvements" means projects that: (1) are: (A) new water or wastewater utility distribution or collection plant projects; or (B) projects to relocate existing utility plant, including projects to relocate utility plant or equipment to accommodate the construction, reconstruction, or improvement of a highway, street, or road (as defined in IC 8-23-1.1-22), including projects under IC 8-25; (2) do not increase revenues by connecting to new customers, even if the projects provide greater available capacity with respect to an eligible utility's distribution or collection plant; and (3) either: (A) for a public utility: (i) are in service and used and useful; and (ii) were not included in the public utility's rate base in its most recent general rate case; or (B) for a municipally owned or not-for-profit utility: (i) are or will be extensions or replacements of projects described in subdivision (1), as described in section 5.5(2)(B) or 5.5(3)(B) of this chapter, as applicable; (ii) were not included on the utility's balance sheet as plant in service in the utility's most recent general rate case; and (iii) are not infrastructure improvements that are being recovered or have been recovered through rates or another rate adjustment mechanism. As added by P.L.94-2000, SEC.1. Amended by P.L.209-2014, SEC.6; P.L.212-2015, SEC.2; P.L.91-2017, SEC.6; P.L.61-2022, SEC.4; P.L.145-2026, SEC.30.

Ind. Code § 8-1-31-5.2 "Eligible utility"

Sec. 5.2. As used in this chapter, "eligible utility" means a: (1) public utility; (2) municipally owned utility; or (3) not-for-profit utility; that provides water or wastewater service and is under the jurisdiction of the commission for the approval of rates and charges. As added by P.L.212-2015, SEC.3.

Ind. Code § 8-1-31-5.5 "Infrastructure improvement costs"

Sec. 5.5. As used in this chapter, "infrastructure improvement costs" means the following: (1) For a public utility: (A) depreciation expenses, including deferred depreciation expense beginning with the in service date of eligible infrastructure improvements; (B) property taxes to be paid by the public utility based upon the first assessment date following placement in service; (C) pretax return; and (D) post in service carrying costs, compounded monthly and based on the overall weighted cost of capital most recently approved by the commission; associated with eligible infrastructure improvements. (2) The following for a municipally owned utility: (A) Depreciation expenses. (B) Adequate money for making extensions and replacements of eligible infrastructure improvements to the extent not provided for through depreciation, as provided in IC 8-1.5-3-8(c). (C) Debt service on funds borrowed to pay for eligible infrastructure improvements. (D) To the extent applicable, property taxes to be paid by the municipally owned utility based upon the first assessment date following placement in service of eligible infrastructure improvements. (3) The following for a not-for-profit utility: (A) Debt service on funds borrowed to pay for eligible infrastructure improvements. (B) Adequate money for making extensions and replacements of eligible infrastructure improvements. (C) To the extent applicable, property taxes to be paid by the not-for-profit utility based upon the first assessment date following placement in service of eligible infrastructure improvements. As added by P.L.209-2014, SEC.7. Amended by P.L.212-2015, SEC.4; P.L.61-2022, SEC.5; P.L.24-2025, SEC.4.

Ind. Code § 8-1-31-5.9 "Not-for-profit utility"

Sec. 5.9. As used in this chapter, "not-for-profit utility" has the meaning set forth in IC 8-1-2-125(a). The term includes a utility company owned, operated, or held in trust by a consolidated city. As added by P.L.212-2015, SEC.5.

Ind. Code § 8-1-31-6 "Pretax return"

Sec. 6. As used in this chapter, "pretax return" means the revenues necessary to: (1) produce net operating income equal to a public utility's weighted cost of capital multiplied by the net original cost of eligible distribution or collection system improvements; and (2) pay state and federal income taxes applicable to such income. As added by P.L.94-2000, SEC.1. Amended by P.L.209-2014, SEC.8; P.L.212-2015, SEC.6.

Ind. Code § 8-1-31-8 Petition by eligible utility for rate adjustment

Sec. 8. (a) Except as provided in subsection (d), an eligible utility may file with the commission a petition setting forth rate schedules establishing an amount that will allow the adjustment of the eligible utility's basic rates and charges to provide for recovery of infrastructure improvement costs. The adjustment: (1) shall be calculated as a monthly fixed charge based upon meter size; (2) shall not include recovery of any infrastructure improvement costs recovered by the eligible utility through contributions in aid of construction (as defined in IC 8-1-2-101.6); and (3) in the case of a municipally owned utility or a not-for-profit utility, shall be recovered over a twelve (12) month period, regardless of the amount of time over which the infrastructure improvement costs were incurred. (b) The eligible utility shall serve the office of the utility consumer counselor a copy of its filing at the time of its filing with the commission. (c) Publication of notice of the filing is not required. (d) An eligible utility may not file a petition under this section in the same calendar year in which the eligible utility has filed a request for a general increase in the basic rates and charges of the eligible utility. As added by P.L.94-2000, SEC.1. Amended by P.L.209-2014, SEC.9; P.L.212-2015, SEC.8; P.L.91-2017, SEC.7; P.L.39-2023, SEC.1.

Ind. Code § 8-1-31-9 Hearing and order; incorrect calculation of adjustment amount; authority of commission to provide correct calculation

Sec. 9. (a) When a petition is filed under section 8 of this chapter, the commission shall conduct a hearing. (b) The office of the utility consumer counselor may do the following: (1) Examine information of the eligible utility, limited to confirmation of the following: (A) That the infrastructure improvements are in accordance with section 5 of this chapter. (B) Proper calculation of the adjustment amount proposed under section 8(a) of this chapter. (2) Submit a report, limited to confirmation of the information described in subdivision (1), to the commission not later than thirty (30) days after the petition is filed. (c) The commission shall hold the hearing and issue its order not later than sixty (60) days after the petition is filed. (d) If the commission finds that a petition filed under section 8 of this chapter complies with the requirements of this chapter, the commission shall enter an order approving the petition. If the commission finds that the adjustment amount has not been calculated correctly, the commission shall: (1) provide the correct calculation of the adjustment amount; and (2) allow the eligible utility to implement the corrected adjustment amount. As added by P.L.94-2000, SEC.1. Amended by P.L.209-2014, SEC.10; P.L.212-2015, SEC.9; P.L.104-2016, SEC.2; P.L.39-2023, SEC.2.

Ind. Code § 8-1-31-10 Petition for change in initial adjustment amount

Sec. 10. (a) Except as provided in subsection (b), an eligible utility may, but is not required to, file a petition for a change in its initial adjustment amount not more often than one (1) time every twelve (12) months. (b) Except as provided in section 15 of this chapter, an eligible utility may not file a petition described in subsection (a) in the same calendar year in which the eligible utility has filed a request for a general increase in the basic rates and charges of the eligible utility. As added by P.L.94-2000, SEC.1. Amended by P.L.209-2014, SEC.11; P.L.212-2015, SEC.10.

Ind. Code § 8-1-31-11 Pretax return factors

Sec. 11. In determining an appropriate pretax return, the commission may consider the following factors: (1) The current state and federal income tax rates. (2) The public utility's actual regulatory capital structure. (3) The actual cost rates for the public utility's long term debt and preferred stock. (4) The public utility's cost of common equity. (5) Other components that the commission considers appropriate. As added by P.L.94-2000, SEC.1.

Ind. Code § 8-1-31-11.5 Allowable recovery for municipally owned utility; factors

Sec. 11.5. In determining the amount of allowable recovery of infrastructure improvement costs for a municipally owned utility, the commission may consider the following factors: (1) Adequate money for making extensions and replacements of eligible infrastructure improvements, to the extent not provided for through depreciation, as provided in IC 8-1.5-3-8(c). (2) Debt service on funds borrowed to pay for eligible infrastructure improvements. (3) Depreciation expenses on eligible infrastructure improvements based on the same rate or rates of depreciation approved by the commission for the calculation of depreciation in the utility's most recent rate case. (4) Other expenses that the commission considers appropriate, including money for the payment of any taxes that may be assessed against the municipally owned utility. As added by P.L.212-2015, SEC.11. Amended by P.L.61-2022, SEC.6; P.L.39-2023, SEC.3.

Ind. Code § 8-1-31-11.6 Allowable recovery for not-for-profit utility; factors

Sec. 11.6. In determining the amount of allowable recovery of infrastructure improvement costs for a not-for-profit utility, the commission may consider the following factors: (1) Adequate money for making extensions and replacements of eligible infrastructure improvements. (2) Debt service on funds borrowed to pay for eligible infrastructure improvements. (3) Other expenses that the commission considers appropriate, including money for the payment of any taxes that may be assessed against the not-for-profit utility or its property. As added by P.L.212-2015, SEC.12. Amended by P.L.61-2022, SEC.7; P.L.39-2023, SEC.4.

Ind. Code § 8-1-31-12 Cost of common equity

Sec. 12. The cost of common equity to be used in the calculation of the charge shall be the most recent determination by the commission in a general rate proceeding of the public utility. If the commission finds that the last such determination is no longer representative of current conditions, the commission may make a new determination of the common equity cost rate for use in determining the charge, after notice and hearing. The most recent prior determination shall be used pending any redetermination. As added by P.L.94-2000, SEC.1.

Ind. Code § 8-1-31-13 Limit on total adjustment revenues; exceptions

Sec. 13. (a) The commission may not approve a petition filed under section 8 or 10 of this chapter to the extent it would: (1) for a public utility, produce total adjustment revenues exceeding ten percent (10%) of the eligible utility's base revenue level approved by the commission in the eligible utility's most recent general rate proceeding; or (2) for a municipally owned or not-for-profit utility, produce total adjustment revenues over the course of each twelve (12) month recovery period that exceed ten percent (10%) of the eligible utility's base revenue level approved by the commission in the eligible utility's most recent general rate proceeding. (b) Subsection (a) does not apply to: (1) infrastructure improvement costs associated with eligible infrastructure improvements that are placed in service due to the construction, reconstruction, or improvement of a highway, street, or road (as defined in IC 8-23-1.1-22), including projects under IC 8-25; or (2) property taxes associated with eligible infrastructure improvements. As added by P.L.94-2000, SEC.1. Amended by P.L.209-2014, SEC.12; P.L.45-2015, SEC.1; P.L.212-2015, SEC.13; P.L.137-2020, SEC.1; P.L.61-2022, SEC.8; P.L.39-2023, SEC.5; P.L.145-2026, SEC.31.

Ind. Code § 8-1-31-14 Adjustment amount calculation; reconciliation

Sec. 14. An adjustment amount proposed under section 8 of this chapter may be calculated based on a reasonable estimate of meter size in the period in which the charge will be in effect. At the end of each twelve (12) month recovery period following the date on which the commission initially approves an adjustment amount for an eligible utility following the eligible utility's most recent general rate case, and using procedures approved by the commission, the eligible utility shall reconcile the difference between adjustment revenues and infrastructure improvement costs during the recovery period and recover or refund the difference, as appropriate, through additional adjustments. In the case of an eligible utility that is a municipally owned utility or a not-for-profit utility, the adjustment amount shall be reset to zero (0) after all previously approved infrastructure improvement costs have been collected, with the exception of any amount necessary to reconcile the difference between adjustment revenues and infrastructure improvement costs. As added by P.L.94-2000, SEC.1. Amended by P.L.209-2014, SEC.13; P.L.212-2015, SEC.14; P.L.61-2022, SEC.9; P.L.39-2023, SEC.6.

Ind. Code § 8-1-31-15 Public utilities; resetting of adjustment amount after increase in basic rates and charges

Sec. 15. A public utility for which the commission has approved a petition under section 8 or 10 of this chapter shall file revised rate schedules resetting the adjustment amount if new basic rates and charges become effective for the public utility following a commission order authorizing a general increase in rates and charges that includes in the public utility's rate base eligible infrastructure improvements reflected in the adjustment amount. As added by P.L.94-2000, SEC.1. Amended by P.L.209-2014, SEC.14; P.L.212-2015, SEC.15; P.L.61-2022, SEC.10.

Ind. Code § 8-1-31-15.5 Municipally owned utilities and not-for-profit utilities; resetting of adjustment amount upon approval of new basic rates and charges that include eligible infrastructure improvements

Sec. 15.5. (a) This section applies only to an eligible utility that is: (1) a municipally owned utility; or (2) a not-for-profit utility. (b) An eligible utility's adjustment amount approved under section 8 or 10 of this chapter shall be reset to zero (0) upon the approval of new basic rates and charges for the eligible utility by the commission in a general rate case that results in the inclusion of eligible infrastructure improvements in the eligible utility's basic rates and charges. However, an adjustment amount approved under this chapter shall not be reset to zero (0) to the extent infrastructure improvement costs approved previously by the commission have not been fully collected. As added by P.L.61-2022, SEC.11. Amended by P.L.39-2023, SEC.7.

Ind. Code § 8-1-31-16 Filing of petition not general increase in basic rates and charges

Sec. 16. For purposes of IC 8-1-2-42(a), the approval of a petition filed under section 8 or 10 of this chapter is not a general increase in basic rates and charges. As added by P.L.94-2000, SEC.1. Amended by P.L.209-2014, SEC.15.

Ind. Code § 8-1-31-17 Adoption of other procedures

Sec. 17. The commission may adopt by rule under IC 4-22-2 or by order other procedures not inconsistent with this chapter that the commission finds reasonable or necessary to administer this chapter. As added by P.L.94-2000, SEC.1. Amended by P.L.209-2014, SEC.16.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/8Fetched: 10/17/2026