Indiana § 8-1-30-6 - Municipal requirement to sell utility property

§ 8-1-30-6. Municipal requirement to sell utility property

Sec. 6. (a) This section does not apply to the following:

(1) A municipality that, as of July 1, 2012, had established and operated a water utility.

(2) An action brought under:

(A) IC 8-1-2-92;

(B) IC 8-1-2-93; or

(C) IC 8-1.5-2;

before March 1, 2013.

(b) A municipality or other governmental unit may not require a utility company that provides water or sewer service to sell property used in the provision of such service to the municipality or governmental unit under IC 8-1-2-92, IC 8-1-2-93, or otherwise, unless:

(1) the commission has made all necessary findings under section 4 of this chapter; and

(2) the procedures and requirements of this chapter have been complied with and satisfied.

As added by P.L.145-1999, SEC.7. Amended by P.L.270-2013, SEC.3.

IC 8-1-30.3Chapter 30.3. Acquisition of Distressed Water or Wastewater Utilities

8-1-30.3-0.5Acquired utility assets; incentive mechanisms for utility companies; commission authorization and required findings 8-1-30.3-1"Cost differential" 8-1-30.3-2Repealed 8-1-30.3-2.5"Not-for-profit utility" 8-1-30.3-2.6"Offered utility" 8-1-30.3-3"Utility company" 8-1-30.3-4"Utility property" 8-1-30.3-5Acquisition 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 8-1-30.3-5.5Appraisal of utility property acquired by non-municipal utility; qualification of appraisers 8-1-30.3-6Offered utility; economies of scale; failure to furnish or maintain adequate and reasonable service and facilities; commission findings 8-1-30.3-6.5Water and wastewater utility allocation of wastewater improvement costs to water customers 8-1-30.3-6.6Alternate filing procedure for acquisition of offered utility with appraised value of $3,000,000 or less 8-1-30.3-7Repealed

IC 8-1-30.3-0.5Acquired 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.

IC 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.

IC 8-1-30.3-2RepealedAs added by P.L.189-2015, SEC.1. Repealed by P.L.229-2019, SEC.3.

IC 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.

IC 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.

IC 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.

IC 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.

IC 8-1-30.3-5Acquisition 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.

IC 8-1-30.3-5.5Appraisal 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.

IC 8-1-30.3-6Offered 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.

IC 8-1-30.3-6.5Water 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.

IC 8-1-30.3-6.6Alternate 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.

IC 8-1-30.3-7RepealedAs added by P.L.189-2015, SEC.1. Repealed by P.L.71-2022, SEC.5.

IC 8-1-30.5Chapter 30.5. RepealedRepealed by P.L.102-2016, SEC.1.

IC 8-1-30.7Chapter 30.7. ExpiredExpired 7-1-2018 by P.L.102-2016, SEC.2 and P.L.215-2018(ss), SEC.21.

IC 8-1-30.8Chapter 30.8. Non-Revenue Water Audits

8-1-30.8-1"Authority" 8-1-30.8-2"Commission" 8-1-30.8-2.2"Independent evaluator" 8-1-30.8-3"Non-revenue water" 8-1-30.8-4"Water utility" 8-1-30.8-5Annual audit 8-1-30.8-6Independent verification; results submitted to authority 8-1-30.8-7Authority to compile and report results 8-1-30.8-8Audits a prerequisite to financial assistance 8-1-30.8-9Repealed

IC 8-1-30.8-1"Authority" Sec. 1. As used in this chapter, "authority" refers to the Indiana finance authority established by IC 5-1.2-3.

As added by P.L.15-2019, SEC.7.

IC 8-1-30.8-2"Commission" Sec. 2. As used in this chapter, "commission" refers to the Indiana utility regulatory commission created by IC 8-1-1-2.

As added by P.L.15-2019, SEC.7.

IC 8-1-30.8-2.2"Independent evaluator" Sec. 2.2. As used in this chapter, "independent evaluator" means a person or entity that is qualified to assess the accuracy or validity of methodology or results of an audit under this chapter. The independent evaluator must be listed as preapproved by the authority after consultation with the department, prior to undertaking an evaluation.

As added by P.L.224-2023, SEC.2.

IC 8-1-30.8-3"Non-revenue water" Sec. 3. As used in this chapter, "non-revenue water" means the difference between:

(1) the volume of water entering a water utility's water distribution system; and

(2) the volume of water:

(A) that is received by the water utility's customers; and

(B) for which the water utility bills its customers.

As added by P.L.15-2019, SEC.7.

IC 8-1-30.8-4"Water utility" Sec. 4. As used in this chapter, "water utility" means:

(1) a public utility (as defined in IC 8-1-2-1(a));

(2) a municipally owned utility (as defined in IC 8-1-2-1(h));

(3) a not-for-profit utility (as defined in IC 8-1-2-125(a));

(4) a cooperatively owned corporation;

(5) a conservancy district established under IC 14-33; or

(6) a regional water district established under IC 13-26;

that provides water service to the public in Indiana for a fee.

As added by P.L.15-2019, SEC.7.

IC 8-1-30.8-5Annual audit Sec. 5. At least once in each calendar year, a water utility shall perform an audit of its water distribution system through the use of the latest version of the American Water Works Association's free water audit software, or other methodology software as the authority may direct, to determine the causes of the water utility's non-revenue water.

As added by P.L.15-2019, SEC.7. Amended by P.L.224-2023, SEC.3.

IC 8-1-30.8-6Independent verification; results submitted to authority Sec. 6. (a) The results of:

(1) the audit performed by a water utility under section 5 of this chapter during calendar year 2020; and

(2) the audit performed by a water utility under section 5 of this chapter during each even-numbered calendar year after 2020;

must be verified by an independent evaluator who is not employed by the water utility except for purposes of the evaluation of audits under this section.

(b) The results of an audit performed by a water utility under section 5 of this chapter during an even-numbered calendar year, as verified by an independent evaluator under subsection (a), must be submitted to the authority by August 1 of the year during which the audit is performed.

As added by P.L.15-2019, SEC.7.

IC 8-1-30.8-7Authority to compile and report results Sec. 7. Beginning in 2020, during each even-numbered year the authority shall:

(1) compile the verified results it receives under section 6(b) of this chapter;

(2) before December 15, prepare a report that:

(A) summarizes the information contained in the verified audit results; and

(B) presents observations based on the information in the verified audit results that the authority decides to include; and

(3) deliver an electronic copy of the report to the executive director of the legislative services agency under IC 5-14-6.

As added by P.L.15-2019, SEC.7.

IC 8-1-30.8-8Audits a prerequisite to financial assistance Sec. 8. To apply to the authority for a loan, a grant, or other financial assistance from:

(1) the drinking water revolving loan program established by IC 5-1.2-10; or

(2) the water infrastructure assistance program established by IC 5-1.2-14;

a water utility must demonstrate to the authority that it has complied with this chapter.

As added by P.L.15-2019, SEC.7.

IC 8-1-30.8-9RepealedAs added by P.L.15-2019, SEC.7. Repealed by P.L.224-2023, SEC.4.

IC 8-1-30.9Chapter 30.9. Long Haul Water Pipelines

8-1-30.9-1"Commission" 8-1-30.9-2"Long haul water pipeline" 8-1-30.9-3"Water utility" 8-1-30.9-4"Withdrawal source" 8-1-30.9-5Certificate of public convenience and necessity to construct long haul water pipeline; transfer, sale, or lease of long haul water pipeline; notice to commission 8-1-30.9-6Application for certificate; required information 8-1-30.9-7Public hearing; commission's order; required findings; revocation, suspension, or modification of certificate 8-1-30.9-8Commission's ongoing review of construction and costs; water utility's election to defer review until completion or cancellation of long haul water pipeline 8-1-30.9-9Water utility's recovery of costs incurred; inclusion in rate base or revenue requirement; completed construction; cancellation of project; construction subject to subsequent review; limitation on recovery of costs exceeding estimate

IC 8-1-30.9-1"Commission" Sec. 1. As used in this chapter, "commission" refers to the Indiana utility regulatory commission created by IC 8-1-1-2.

As added by P.L.99-2025, SEC.1.

IC 8-1-30.9-2"Long haul water pipeline" Sec. 2. (a) As used in this chapter, "long haul water pipeline" means a newly constructed, continuous pipeline that has the ability to transport water:

(1) at a capacity of at least ten million (10,000,000) gallons per day; and

(2) to a destination located at least thirty (30) miles from the withdrawal source.

(b) The term does not include:

(1) a project that will return at least fifty percent (50%) of the transported water after utilization back to the withdrawal source; or

(2) a pipeline project located, in whole or in part, inside the Great Lakes-St. Lawrence River basin (as defined in IC 14-25-15-1).

As added by P.L.99-2025, SEC.1.

IC 8-1-30.9-3"Water utility" Sec. 3. As used in this chapter, "water utility" means:

(1) a public utility (as defined in IC 8-1-2-1(a));

(2) a municipally owned utility (as defined in IC 8-1-2-1(h));

(3) a not-for-profit utility (as defined in IC 8-1-2-125(a));

(4) a cooperatively owned corporation;

(5) a conservancy district established under IC 14-33; or

(6) a regional water district established under IC 13-26;

that provides water service to the public in Indiana for compensation.

As added by P.L.99-2025, SEC.1.

IC 8-1-30.9-4"Withdrawal source" Sec. 4. As used in this chapter, "withdrawal source" means:

(1) a river, lake, reservoir, spring, or ground water aquifer; or

(2) the connection point with a water utility.

As added by P.L.99-2025, SEC.1.

IC 8-1-30.9-5Certificate of public convenience and necessity to construct long haul water pipeline; transfer, sale, or lease of long haul water pipeline; notice to commission Sec. 5. (a) Except as provided in this chapter, the construction of a long haul water pipeline after June 30, 2025, is prohibited.

(b) After June 30, 2025, a water utility may construct a long haul water pipeline if the water utility first obtains from the commission a certificate that the public convenience and necessity requires, or will require, the construction of the long haul water pipeline.

(c) A certificate of public convenience and necessity under this chapter is not required for the transfer, purchase, sale, or lease of a long haul water pipeline that has been constructed in accordance with a certificate issued under this chapter. However, a person that transfers, sells, or leases a long haul water pipeline must provide written notice to the commission of the transfer, sale, or lease not later than sixty (60) days after the transfer, sale, or lease is finalized. Notice under this subsection shall be submitted in the form and manner prescribed by the commission and must include the name and contact information for the transferee, purchaser, or lessee. The commission may issue a general administrative order regarding the information to be included in a notice required under this subsection.

As added by P.L.99-2025, SEC.1.

IC 8-1-30.9-6Application for certificate; required information Sec. 6. A water utility that seeks to construct a long haul water pipeline must submit an application to the commission for a certificate of public convenience and necessity. The application must include the following:

(1) The purpose and necessity of the long haul water pipeline, including a description of how the water being transported will be used and discharged.

(2) The volume of water to be transported via the long haul water pipeline.

(3) The location of the source water, transfer points, and destination of the water being transported via the long haul water pipeline.

(4) An assessment of the hydraulic carrying capacity of, and the environmental impact on, the receiving waters in the specific areas that will receive and eventually discharge the water resources.

(5) An assessment of the hydraulic and environmental impacts of the proposed water withdrawals on the source area.

(6) A feasibility assessment that includes a consideration of whether alternate water sources could be used instead of the proposed transfer, including engineering, geological, environmental, and economic analyses.

(7) A list of conservation programs or practices conducted or proposed by the water utility with respect to the area to which water is proposed to be transferred.

(8) The date the water utility intends to begin transferring water.

(9) An estimate of costs associated with the construction of the long haul water pipeline.

(10) The impact of the long haul water pipeline on customer rates.

(11) Any other information required by the commission.

As added by P.L.99-2025, SEC.1.

IC 8-1-30.9-7Public hearing; commission's order; required findings; revocation, suspension, or modification of certificate Sec. 7. (a) The commission shall hold a public hearing on each application.

(b) The commission may consider all relevant information related to construction costs.

(c) The commission shall issue an order granting or denying a certificate of public convenience and necessity not later than two hundred forty (240) days after the date the application for the certificate and the applicant's case in chief are filed with the commission.

(d) The commission may issue a general administrative order establishing guidelines regarding the information to be included in the applicant's case in chief.

(e) The commission shall grant a certificate of public convenience and necessity only if the commission makes a finding:

(1) as to the best estimate of the construction costs based on the evidence of record;

(2) that the estimated costs described in subdivision (1) are reasonable;

(3) that the public convenience and necessity requires or will require the construction of the long haul water pipeline; and

(4) that the construction of the long haul water pipeline is in the public interest.

(f) The commission may approve or disapprove an application in whole or part, including any amendments to the application. A certificate issued by the commission under this chapter may include any terms considered reasonably necessary by the commission.

(g) The commission may revoke, suspend, or modify a certificate if any of the following apply:

(1) A water utility violates the terms of the certificate.

(2) A water utility obtained the certificate by fraud, misrepresentation, or other malfeasance.

As added by P.L.99-2025, SEC.1.

IC 8-1-30.9-8Commission's ongoing review of construction and costs; water utility's election to defer review until completion or cancellation of long haul water pipeline Sec. 8. (a) Except as provided in subsection (b), the commission shall maintain an ongoing review of the construction of a long haul water pipeline as it proceeds. The applicant shall submit each year during construction, or at other times agreed to by commission and the water utility, a progress report and any revisions in the cost estimates for the construction.

(b) A water utility may elect to forego ongoing review under subsection (a) and defer the review of the construction and cost until completion or cancellation of the long haul water pipeline.

(c) If the commission approves the construction and the cost of the portion of the long haul water pipeline under review under this section, the certificate remains in full force and effect.

(d) If the commission disapproves of all or part of the construction or cost of the portion of the long haul water pipeline under review under this section, the commission may modify or revoke the certificate, subject to section 9 of this chapter.

As added by P.L.99-2025, SEC.1.

IC 8-1-30.9-9Water utility's recovery of costs incurred; inclusion in rate base or revenue requirement; completed construction; cancellation of project; construction subject to subsequent review; limitation on recovery of costs exceeding estimate Sec. 9. Absent fraud, concealment, or gross mismanagement, a water utility shall recover through rates the actual costs the water utility has incurred in reliance on a certificate issued under this chapter as follows:

(1) If construction of a long haul water pipeline has been subject to ongoing review under section 8(a) of this chapter and the commission finds the construction of the long haul water pipeline has been completed, the costs of construction approved by the commission during the ongoing review shall be included, without further commission review, in:

(A) the water utility's rate base, in the case of a public utility; or

(B) the water utility's revenue requirement for extensions and replacements expense, depreciation expense, or debt service expense, as applicable, in the case of a:

(i) municipally owned utility;

(ii) not-for-profit utility;

(iii) conservancy district; or

(iv) regional water district.

(2) If construction of a long haul water pipeline is subject to subsequent review under section 8(b) of this chapter and the commission finds the construction of the long haul water pipeline to be completed, the costs of construction that do not exceed the estimate under section 7(e)(1) of this chapter, and that are not shown to result from inadequate quality controls, shall be included in:

(A) the water utility's rate base, in the case of a public utility; or

(B) the water utility's revenue requirement for extensions and replacements expense, depreciation expense, or debt service expense, as applicable, in the case of a:

(i) municipally owned utility;

(ii) not-for-profit utility;

(iii) conservancy district; or

(iv) regional water district.

However, inclusion of costs in excess of the estimate under section 7(e)(1) of this chapter in the water utility's rate base or revenue requirement is not permitted unless shown by the water utility to be necessary and prudent in the construction of the long haul water pipeline.

(3) If a long haul water pipeline has been canceled as a result of:

(A) the modification or revocation of the certificate under this chapter; or

(B) local permitting or other issues beyond the water utility's control;

and the long haul water pipeline's construction has been subject to ongoing review under section 8(a) of this chapter (including reviews after cancellation), the costs of construction approved by the commission during the review shall be recovered by the water utility by inclusion in rates and amortization over a reasonable time to be determined by the commission. A water utility that is a public utility shall be permitted to earn a return, computed using the water utility's authorized rate of return, on the unamortized balance.

(4) If a long haul water pipeline has been canceled as a result of:

(A) the modification or revocation of the certificate under this chapter; or

(B) local permitting or other issues beyond the water utility's control;

and the long haul water pipeline's construction is subject to subsequent review under section 8(b) of this chapter, the costs of construction incurred before cancellation that were included in the estimate under section 7(e)(1) of this chapter and that have not been shown to result from inadequate quality controls shall be recovered by the water utility by inclusion in rates and amortization over a reasonable time to be determined by the commission. A water utility that is a public utility shall be permitted to earn a return, computed using the water utility's authorized rate of return, on the unamortized balance. However, costs that were not included in the estimate under section 7(e)(1) of this chapter may not be included in rates unless shown by the water utility to be necessary and prudent in the construction of the long haul water pipeline.

As added by P.L.99-2025, SEC.1.

IC 8-1-31Chapter 31. Infrastructure Improvement Charges

8-1-31-1Applicability of definitions 8-1-31-1.3"Adjustment amount" 8-1-31-1.5"Adjustment revenues" 8-1-31-2Repealed 8-1-31-3Repealed 8-1-31-4Repealed 8-1-31-5"Eligible infrastructure improvements" 8-1-31-5.2"Eligible utility" 8-1-31-5.5"Infrastructure improvement costs" 8-1-31-5.9"Not-for-profit utility" 8-1-31-6"Pretax return" 8-1-31-7Repealed 8-1-31-8Petition by eligible utility for rate adjustment 8-1-31-9Hearing and order; incorrect calculation of adjustment amount; authority of commission to provide correct calculation 8-1-31-10Petition for change in initial adjustment amount 8-1-31-11Pretax return factors 8-1-31-11.5Allowable recovery for municipally owned utility; factors 8-1-31-11.6Allowable recovery for not-for-profit utility; factors 8-1-31-12Cost of common equity 8-1-31-13Limit on total adjustment revenues; exceptions 8-1-31-14Adjustment amount calculation; reconciliation 8-1-31-15Public utilities; resetting of adjustment amount after increase in basic rates and charges 8-1-31-15.5Municipally owned utilities and not-for-profit utilities; resetting of adjustment amount upon approval of new basic rates and charges that include eligible infrastructure improvements 8-1-31-16Filing of petition not general increase in basic rates and charges 8-1-31-17Adoption of other procedures