Ind. Code ch. 8-1-30.3

Ind. Code ch. 8-1-30.3
in effect

Ind. Code § 8-1-30.3-0.5 Acquired utility assets; incentive mechanisms for utility companies; commission authorization and required findings

Sec. 0.5. (a) To encourage the consolidation of utility companies under this chapter, the commission shall consider and authorize mechanisms: (1) outside of a general rate case; and (2) in addition to the inclusion of a cost differential in a utility company's rate base under section 5 of this chapter; to allow utility companies to integrate into their systems, invest in, and earn on acquired utility assets. (b) The commission shall authorize a mechanism under subsection (a) if the commission finds that the proposed mechanism is just and reasonable and in the public interest. (c) The commission may adopt rules under IC 4-22-2 to implement this section. As added by P.L.24-2025, SEC.3.

Ind. Code § 8-1-30.3-1 "Cost differential"

Sec. 1. As used in this chapter, "cost differential" means the difference between: (1) the cost to a utility company that acquires utility property from an offered utility, including the purchase price, incidental expenses, and other costs of acquisition; minus (2) the difference between: (A) the cost of the utility property when originally put into service by the offered utility; minus (B) contributions or advances in aid of construction plus applicable accrued depreciation. As added by P.L.189-2015, SEC.1. Amended by P.L.229-2019, SEC.2.

Ind. Code § 8-1-30.3-2.5 "Not-for-profit utility"

Sec. 2.5. 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.98-2016, SEC.2.

Ind. Code § 8-1-30.3-2.6 "Offered utility"

Sec. 2.6. As used in this chapter, "offered utility" means a utility company whose property is the subject of an acquisition described in section 5(a) of this chapter. As added by P.L.229-2019, SEC.4.

Ind. Code § 8-1-30.3-3 "Utility company"

Sec. 3. As used in this chapter, "utility company" means: (1) a: (A) public utility; (B) municipally owned utility; or (C) not-for-profit utility; that provides water or wastewater service; or (2) a regional sewer or water district. As added by P.L.189-2015, SEC.1. Amended by P.L.98-2016, SEC.3.

Ind. Code § 8-1-30.3-4 "Utility property"

Sec. 4. As used in this chapter, "utility property" refers to property of a utility company that is the subject of an acquisition described in section 5(a) of this chapter. As added by P.L.189-2015, SEC.1.

Ind. Code § 8-1-30.3-5 Acquisition of offered utility; presumption of reasonableness of cost differential; inclusion of cost differential in acquiring utility's rate base; notice to customers of acquiring utility; final order; net original cost of assets

Sec. 5. (a) Except as provided in section 6.6 of this chapter, this section applies if: (1) a utility company acquires property from an offered utility in a transaction involving a willing buyer and a willing seller; and (2) at least one (1) utility company described in subdivision (1) is subject to the jurisdiction of the commission under this article. (b) Subject to subsection (c), there is a rebuttable presumption that a cost differential is reasonable. (c) If the acquisition: (1) is made under IC 8-1.5-2-6.1, and to the extent the purchase price does not exceed the appraised value as determined under IC 8-1.5-2-5; or (2) is not made under IC 8-1.5-2-6.1, and to the extent the purchase price does not exceed the appraised value as determined under section 5.5 of this chapter; the purchase price is considered reasonable for purposes of subsection (d) and any resulting cost differential is considered reasonable. (d) Before closing on the acquisition, the utility company that acquires the utility property may petition the commission to include any cost differential as part of its rate base in future rate cases. The commission shall approve the petition if the commission finds the following: (1) The utility property is used and useful to the offered utility in providing water service, wastewater service, or both water and wastewater service. (2) The offered utility is too small to capture economies of scale or has failed to furnish or maintain adequate, efficient, safe, and reasonable service and facilities. (3) The utility company will improve economies of scale or, if otherwise needed, make reasonable and prudent improvements to the offered utility's plant, the offered utility's operations, or both, so that customers of the offered utility will receive adequate, efficient, safe, and reasonable service. (4) The acquisition of the utility property is the result of a mutual agreement made at arms length. (5) The actual purchase price of the utility property is reasonable. (6) The utility company and the offered utility are not affiliated and share no ownership interests. (7) The rates charged by the utility company will not increase unreasonably in future general rate cases solely as a result of acquiring the utility property from the offered utility. For purposes of this subdivision, the rates and charges will not increase unreasonably in future general rate cases so long as the net original cost proposed to be recorded under subsection (f) is not greater than two percent (2%) of the acquiring utility's net original cost rate base as determined in the acquiring utility's most recent general rate case, plus any adjustments to the rate base under IC 8-1-31 and IC 8-1-31.7 that have occurred after the rate case. If the amount proposed to be recorded under subsection (f) is greater than two percent (2%) of the acquiring utility's net original cost rate base as determined in the acquiring utility's most recent general rate case, plus any adjustments to the rate base under IC 8-1-31 and IC 8-1-31.7 that have occurred after the rate case, the commission shall proceed to determine whether the rates charged by the utility company will increase unreasonably in future general rate cases solely as a result of acquiring the utility property from the offered utility and, in making the determination, may consider evidence of: (A) the anticipated dollar value increase; and (B) the increase as a percentage of the average bill. (8) The cost differential will be added to the utility company's rate base to be amortized as an addition to expense over a reasonable time with corresponding reductions in the rate base. (e) In connection with its petition under subsection (d), the acquiring utility company shall provide the following: (1) Notice to customers of the acquiring utility company that a petition has been filed with the commission under this chapter. The notice provided under this subdivision must include the cause number assigned to the petition. Notice under this subdivision may be provided to customers in a billing insert. (2) Notice to the office of the utility consumer counselor. (3) A statement of known infrastructure, environmental, or other issues affecting the offered utility, and the process for determining reasonable and prudent improvements upon completing the acquisition. (f) In a proceeding under subsection (d), the commission shall issue its final order not later than two hundred ten (210) days after the filing of the petitioner's case in chief. If the commission grants the petition, the commission's order shall authorize the acquiring utility company to make accounting entries recording the acquisition and that reflect: (1) the full purchase price; (2) incidental expenses; and (3) other costs of acquisition; as the net original cost of the utility plant in service assets being acquired, allocated in a reasonable manner among appropriate utility plant in service accounts. As added by P.L.189-2015, SEC.1. Amended by P.L.98-2016, SEC.4; P.L.64-2018, SEC.1; P.L.229-2019, SEC.5; P.L.160-2020, SEC.5; P.L.61-2022, SEC.3; P.L.34-2024, SEC.1.

Ind. Code § 8-1-30.3-5.5 Appraisal of utility property acquired by non-municipal utility; qualification of appraisers

Sec. 5.5. (a) For purposes of this section, an individual, or the company employing the individual, is qualified to perform an appraisal if the individual is: (1) an engineer registered under IC 25-31; or (2) an appraiser licensed under IC 25-34.1-8. (b) For purposes of this section, an individual performing an appraisal, or the company employing the individual, is disinterested if: (1) the fee for the appraisal services is fixed before the individual performs the appraisal; (2) the individual is not an employee of one (1) of the parties to the acquisition; (3) the individual is not a state or municipal employee; and (4) the: (A) individual; and (B) company, if applicable; do not have affiliated interests (as defined in IC 8-1-2-49) in one (1) of the parties to the acquisition. (c) An appraisal under section 5(c)(2) of this chapter must be performed by three (3) qualified and disinterested appraisers, including: (1) at least one (1) appraiser qualified under subsection (a)(1); and (2) at least one (1) appraiser qualified under subsection (a)(2). (d) If the three (3) appraisers performing an appraisal for purposes of section 5(c)(2) of this chapter cannot agree as to an appraised value, the appraisal is sufficient for purposes of section 5(c)(2) of this chapter if the appraisal is signed by two (2) of the appraisers. As added by P.L.160-2020, SEC.6.

Ind. Code § 8-1-30.3-6 Offered utility; economies of scale; failure to furnish or maintain adequate and reasonable service and facilities; commission findings

Sec. 6. For purposes of section 5(d)(2) of this chapter, an offered utility is too small to capture economies of scale or is not furnishing or maintaining adequate, efficient, safe, and reasonable service and facilities if the commission finds one (1) or more of the following: (1) The offered utility violated one (1) or more state or federal statutory or regulatory requirements in a manner that the commission determines affects the safety, adequacy, efficiency, or reasonableness of its services or facilities. (2) The offered utility has inadequate financial, managerial, or technical ability or expertise. (3) The offered utility fails to provide water in sufficient amounts, that is palatable, or at adequate volume or pressure. (4) The offered utility, due to necessary improvements to its plant or distribution or collection system or operations, is unable to furnish and maintain adequate service to its customers at rates equal to or less than those of the acquiring utility company. (5) The offered utility serves fewer than eight thousand (8,000) customers. (6) Any other facts that the commission determines demonstrate the offered utility's inability to capture economies of scale or to furnish or maintain adequate, efficient, safe, or reasonable service or facilities. As added by P.L.189-2015, SEC.1. Amended by P.L.98-2016, SEC.5; P.L.85-2017, SEC.37; P.L.229-2019, SEC.6; P.L.160-2020, SEC.7.

Ind. Code § 8-1-30.3-6.5 Water and wastewater utility allocation of wastewater improvement costs to water customers

Sec. 6.5. (a) This section applies to a utility company that is an eligible utility under IC 8-1-31.7-3 and that provides both water and wastewater service in one (1) or more areas in which the utility company has acquired wastewater utility property in an acquisition that was eligible for approval, or was approved, under: (1) this chapter; or (2) IC 8-1.5-2-6.1. (b) A utility company described in subsection (a) may, in a petition to the commission for approval of a plan for service enhancement improvements to the utility company's wastewater utility property under IC 8-1-31.7, propose to allocate a portion of eligible costs of the utility company's wastewater utility property to the utility company's water customers. (c) If a utility company makes a proposal under subsection (b), the utility company shall submit the following as part of the utility company's case in chief: (1) The estimated adjustment rider that would result if there were no allocation of eligible costs to the utility company's water customers. (2) A calculation of two percent (2%) of the utility company's authorized total revenues for purposes of subsection (f)(1). (3) Information regarding the availability of grants or low interest loans and whether the utility company considered using available grants or low interest loans to help the utility company finance or reduce the cost of the service enhancement improvements for the utility company and the utility company's customers. (4) Documentation demonstrating that the utility company has developed an asset management program, as defined in guidelines adopted by the Indiana finance authority under IC 5-1.2. (5) An estimate of the life cycle management costs, as defined in guidelines adopted by the Indiana finance authority under IC 5-1.2, that will be incurred over the useful life of the assets to be financed by the service enhancement improvements for which approval is sought under IC 8-1-31.7. (6) Information as to whether the wastewater utility property acquired by the utility company was subject, before the acquisition, to an enforcement order (as defined in IC 8-1-1.9-5). (d) The commission may approve a utility company's proposal under subsection (b) to the extent the commission finds that: (1) subject to subsection (e), because of reasonable and necessary improvements that are proposed for the wastewater utility property, the resulting rates charged to wastewater customers would reach levels necessitating the provision of financial assistance to the customers in accordance with IC 8-1-2-0.5 and in a manner consistent with IC 8-1-2-4; (2) the total rates charged by the utility company for water service will not increase unreasonably as a result of the allocation; (3) the utility company included in its proposal information regarding the availability of grants or low interest loans and whether the utility company considered using available grants or low interest loans to help the utility company finance or reduce the cost of the service enhancement improvements for the utility company and the utility company's customers, as described in subsection (c)(3); and (4) the utility company has developed an asset management program, as defined in guidelines adopted by the Indiana finance authority under IC 5-1.2, as described in subsection (c)(4). (e) The commission may consider available reasonable measures that could be taken to reduce the cost of the service enhancement improvements described in subsection (d)(1). (f) For purposes of subsection (d)(2): (1) an increase in the total rates charged for water service is not unreasonable to the extent the allocation under subsection (b) results in an increase in authorized total revenues of two percent (2%) or less; and (2) the commission shall use the utility company's most recently authorized total revenue, inclusive of adjustments in accordance with adjustable rate mechanisms approved by the commission, for purposes of making the determination under subdivision (1). (g) If the commission approves a utility company's proposal under subsection (d): (1) the utility company shall include a notice on or with water customer monthly bills specifying the amount of the adjustment rider under IC 8-1-31.7 approved by the commission that recovers necessary wastewater utility improvements; (2) the utility company shall, in subsequent general rate cases, submit a cost of service study as part of the utility company's case in chief; and (3) the commission shall: (A) evaluate the allocation of eligible costs of the utility's wastewater utility property to the utility company's water customers in those subsequent general rate cases described in subdivision (2); and (B) order, to the extent the commission finds necessary, any changes to the utility's rates to ensure just and reasonable rates. (h) In the commission's annual report under IC 8-1-1-14 the commission shall include a description of any activity under this section in the fiscal year ending June 30 of the year in which the report is due. As added by P.L.100-2023, SEC.1.

Ind. Code § 8-1-30.3-6.6 Alternate filing procedure for acquisition of offered utility with appraised value of $3,000,000 or less

Sec. 6.6. (a) This section does not apply to a petition that is filed with the commission under section 5 of this chapter before July 1, 2024. (b) Subject to subsection (d) and notwithstanding any other law or any rule of the commission, including 170 IAC 1-6-1(b), if: (1) the appraised value of the utility property to be acquired, as determined under: (A) section 5.5 of this chapter; or (B) IC 8-1.5-2-5; as applicable, does not exceed three million dollars ($3,000,000); and (2) the purchase price for the utility property is less than the appraised value; a utility company seeking to acquire the utility property of an offered utility is not required to file a petition under section 5 of this chapter, and may instead submit to the commission a filing to obtain the relief set forth in section 5 of this chapter under the procedures set forth in 170 IAC 1-6, as modified by this section. (c) A filing authorized under subsection (b) must include the following: (1) A copy of the purchase agreement entered into between the acquiring utility company and the offered utility. (2) A copy of the journal entry reflecting the accounting entries recording the acquisition in accordance with section 5(f) of this chapter. (3) A copy of the appraisal of the utility property under: (A) section 5.5 of this chapter; or (B) IC 8-1.5-2-5; as applicable. (4) A statement of known infrastructure, environmental, or other issues affecting the offered utility, and the process for determining reasonable and prudent improvements upon completing the acquisition. (5) Any other information required to be submitted under the procedures set forth in 170 IAC 1-6, as modified by this section. (d) In an order approving a filing submitted under this section, the commission: (1) may only authorize the acquiring utility company to make accounting entries recording the acquisition that reflect: (A) the full purchase price, as set forth in section 5(f)(1) of this chapter; and (B) the estimated: (i) incidental expenses, as set forth in section 5(f)(2) of this chapter; and (ii) other costs of acquisition, as set forth in section 5(f)(3) of this chapter; as the net original cost of the utility plant in service assets being acquired; and (2) shall provide that any: (A) estimated incidental expenses, as set forth in section 5(f)(2) of this chapter; or (B) other estimated costs of acquisition, as set forth in section 5(f)(3) of this chapter; are subject to a reasonableness review as part of the acquiring utility company's next base rate case. As added by P.L.34-2024, SEC.2.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/8Fetched: 10/17/2026

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