Indiana Administrative Code
Title 170 - INDIANA UTILITY REGULATORY COMMISSION
Article 4 - ELECTRIC UTILITIES
Rule 6 - Ratemaking Treatment of Qualified Pollution Control Property Under Construction
Section 6-1 - Definitions

Universal Citation: 170 IN Admin Code 6-1

Current through September 18, 2024

Authority: IC 8-1-2-6.1; IC 8-1-2-6.6

Affected: IC 8-1-8.7; IC 8-1-27-12; IC 8-1-27-19

Sec. 1.

(a) As used in this rule, "air pollution control device(s)" means the systems, equipment, facilities, appliances, controls, monitors, processes, and identifiable structures or parts of structures located at a utility's coal burning electric generating facility which are:

(1) designed to directly or indirectly reduce airborne emissions that result from the combustion of coal or designed to temporarily or permanently control, remove, store, or otherwise dispose of solid or liquid effluent byproducts resulting from the direct or indirect reduction of airborne emissions of sulfur or nitrogen based pollutants;

(2) not intended to reduce airborne emissions of sulfur or nitrogen based pollutants by replacing the generation of electricity through coal combustion with another method of electricity generation; and

(3) not intended to generate additional amounts of electricity for the operations described in subdivision (1).

(b) As used in this rule, "allowance for funds used during construction (AFUDC)" means the cost for the period of construction of borrowed funds used for the construction of qualified pollution control property, as defined in subsection (l), and a reasonable rate on other funds when so used. AFUDC for qualified pollution control property shall be recorded in separate subaccounts or their subdivisions in accordance with the FERC or NARUC uniform system of accounts.

(c) As used in this rule, "clean coal technology" means a technology (including precombustion treatment of coal):

(1) that is used in a new or existing electric generating facility and directly or indirectly reduces airborne emissions of sulfur or nitrogen based pollutants associated with the combustion or use of coal; and

(2) that either:
(A) is not in general commercial use at the same or greater scale in new or existing facilities in the United States as of January 1, 1989; or

(B) has been selected by the United States Department of Energy for funding under its Innovative Clean Coal Technology program and is finally approved for such funding on or after January 1, 1989.

(d) As used in this rule, "commission" means the Indiana utility regulatory commission.

(e) As used in this rule, "construction work in progress (CWIP)" means the balances of all work orders for qualified pollution control property, as defined in subsection (l), under construction. Balances of construction expenditures shall be recorded in separate subaccounts or their subdivisions in accordance with the FERC or NARUC uniform system of accounts.

(f) As used in this rule, "equipment that constitutes clean coal technology" means the systems, equipment, facilities, appliances, processes, controls, monitors, and identifiable structures or parts of structures that constitute a utility project implementing or using clean coal technology, as defined in subsection (c), to the extent that the utility project has received and continues to possess a valid certificate of public convenience and necessity from the commission under IC 8-1-8.7.

(g) As used in this rule, the "FERC Uniform System of Accounts" means the rules and regulations governing the classification of accounts for Class A-B private electric utilities, as approved, prescribed, and promulgated by the Federal Energy Regulatory Commission in 18 CFR 41 and 18 CFR 101 and adopted by the commission for Indiana electric utilities at 170 IAC 4-2-1.1.

(h) As used in this rule, "Indiana coal" means coal from a mine whose coal deposits are located in the ground wholly or partially in Indiana regardless of the location of the mine's tipple.

(i) As used in this rule, the "NARUC Uniform System of Accounts" means the rules and regulations governing the classification of accounts for Class C-D private electric utilities and Class A-B-C-D municipal electric utilities, as developed by the National Association of Regulatory Utility Commissioners and adopted by the commission for Indiana electric utilities under 170 IAC 4-2-2.

(j) As used in this rule, "preconstruction costs" means the costs of employing clean coal technology incurred and recorded in the utility's accounts before commencing construction of a project for which the utility has been awarded a certificate under IC 8-1-8.7. Preconstruction costs shall include the cost of the following:

(1) Engineering and design prior to commencing construction.

(2) Site investigation and analysis and site preparation.

(3) Licensing, permitting, and application for a certificate under IC 8-1-8.7.

(4) Environmental assessments.

(5) The preparation and submission of technical proposals to a governmental or not-for-profit entity engaged in the research or development of clean coal technology for the purpose of receiving joint funding for the utility's clean coal technology project.

(6) Other costs approved by the commission.

(k) As used in this rule, "primary fuel source" means the specific fuel consumed for the production of electricity at a utility's coal burning electric generating facility, where the specific fuel consumption amounts to no less than one hundred percent (100%) of the total fuel consumed at the facility within any twelve (12) months after the qualified pollution control property is fully operating at the facility, and where:

(1) the specific fuel and total fuel consumption at the facility are measured in terms of British thermal units (Btu); and

(2) the total fuel consumption at the facility does not include such items as:
(A) the minimum amounts of fuel required for ignition, start-up, testing, flame stabilization, and control uses; and

(B) the minimum amounts of fuel required to alleviate or prevent:
(i) unanticipated equipment outages; and

(ii) emergencies directly affecting the public health, safety, or welfare which would result from electric power outages.

(l) As used in this rule, "qualified pollution control property" means an air pollution control device or equipment that:

(1) constitutes clean coal technology;

(2) meets applicable state or federal requirements; and

(3) is designed to accommodate the burning of coal from the geological formation known as the Illinois Basin.

(m) As used in this rule, "research and development" means the planned efforts of a utility for the design, development, or implementation of:

(1) an experimental facility;

(2) a plant process;

(3) a product;

(4) a formula;

(5) an invention;

(6) a system or similar items; or

(7) the improvement of already existing items of a like nature; for the express purpose of increasing the use of Indiana coal.

(n) As used in this rule, "utility" means an electric generating utility allowed by law to earn a return on its investment.

(o) As used in this rule, "value of qualified pollution control property under construction" means the value of CWIP, including the amounts of AFUDC, for a utility's qualified pollution control property under construction, where these amounts have been recorded in the utility's accounts in accordance with the FERC or NARUC Uniform System of Accounts at the date of valuation.

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