In May 2011, Indiana enacted SB 251, creating the Clean Energy Portfolio Standard (CPS). The program sets a voluntary goal of 10% clean energy by 2025, based on the amount of electricity supplied by the utility in 2010. The Indiana Utility Regulatory Commission (IURC) adopted emergency rules (RM #11-05) for the CPS in December 2011. Final rules were adopted in June 2012, effective July 9, 2012.
In order to participate in the program, electric utilities must apply directly to the IURC no later than 2 years after the beginning of Goal Periods I or II, as outlined below. Only public utilities may participate in the program; municipally-owned utilities, rural electric cooperatives, or electric cooperatives with at least one rural electric cooperative member may not participate in the program. Applications must include a plan to meet the goals, including a detailed business plan and the identification of specific projects and resources.
- Goal Period I: Between January 1, 2013 and December 31, 2018, an average of at least 4% of electricity supplied must be from clean energy
- Goal Period II: Between January 1, 2019 and December 31, 2024, an average of at least 7% of electricity supplied must be from clean energy
- Goal Period III: Between January 1, 2025 and December 31, 2025, an average of at least 10% of electricity supplied must be from clean energy
Utilities that participate in the program and meet the program goals are eligible for incentives which are used to pay for the compliance projects. A utility may apply to the commission to increase its Return on Equity by as much as 50 basis points over its current rate of return, or request a periodic rate adjustment mechanism. Applications to receive incentives must be filed no later than 6 months after the end of each Goal Period.
Program reports from each utility are due annually on March 1 beginning in 2014. Reports must include a detailed explanation and supporting documentation of any requests for rate adjustments for cost recovery associated with the CPS program.
Clean energy technologies include wind; solar energy; photovoltaic cells and panels; dedicated crops grown for energy production; organic waste biomass, including agricultural crops, agricultural wastes and residues, wood residues, forest thinnings, mill residue wood, animal wastes, animal byproducts, aquatic plants and algae; hydropower; fuel cells; hydrogen; energy from waste to energy facilities, including energy derived from advanced solid waste conversion technologies; energy storage systems or technologies; geothermal energy; coal bed methane; industrial byproduct technologies that use fuel or energy that is a byproduct of an industrial process; waste heat recovery from capturing and reusing the waste heat in industrial processes for heating or for generating mechanical or electrical work; and demand side management or energy efficiency initiatives.
Up to 30% of the goal may be met with clean coal technology; nuclear energy; combined heat and power systems; natural gas that displaces electricity from coal; clean coal technology; and net-metered distributed generation facilities. Fifty percent of qualifying energy obtained by Indiana utilities participating in the CPS must come from within the state. Thermal energy used for heating, cooling, or mechanical work is eligible for the goal. In order to measure thermal energy for the purpose of goal compliance, it may be measured directly through a meter, calculated using an equation set forth in IAC 17.1, or a utility may seek approval from the commission to use an alternative equation.
Utilities may purchase, sell, or trade Clean Energy Credits, which are defined as 1 MW of clean energy (as defined above) or 3,412,000 BTUs. Any excess amounts of clean energy supplied during a specific goal period, or any Clean Energy Credits purchased from another supplier, may be counted toward the next goal period. Other than this exception, all clean energy sources must be in service, purchased, or contracted for by the effective dates of the CPS program goals.