Indiana utilities may waive connection fees for some affordable homes

A utility may waive or reduce water or sewer connection fees through a special contract. The nonprofit must be tax-exempt and build single-family homes or duplexes for households earning below the area median income. The homes must be near jobs and cost no more than 30% of household income each month to buy or rent. The nonprofit must have an agreement with the Indiana housing and community development authority to build the homes. If the connection adds to the utility’s overall costs over 20 years, the utility may not charge the capacity or connection fee. If it does not, the utility may charge a reduced fee, set by the contract. A utility may limit how many contracts it accepts to keep other customers from unfairly subsidizing them. This section takes effect upon passage.

Eligible utilities may recover certain replacement, chemical, and power costs through rate adjustments. These provisions apply to eligible utilities seeking recovery for plant or equipment replacement and specified chemical or power costs related to maintaining existing health, safety, or environmental protections. For replacement costs, the commission must find the work reasonable and necessary. Chemical and power costs may be recalculated only after at least two years and when average annual costs have changed by at least 3%. Increases count as expenses and decreases as credits. Chemical and power cost adjustments are recovered in full through a rider, without the usual 20% deferral. Other covered improvement costs generally require commission plan approval and are recovered 80% through the rider, with 20% deferred to the next general rate case. These provisions take effect July 1, 2026. A utility may seek chemical or power cost recalculation after at least two years have passed since its latest order setting basic rates.

Utilities with approved riders for recalculated chemical or power costs must petition to change the adjustment each year. This applies to an eligible utility with a commission-approved rider for chemical or power costs recalculated under the specified process. The utility must send the petition to the Office of Utility Consumer Counselor. The commission must hold a hearing and issue an order. The petition is due within 30 days after each 12-month period following rider approval, until the commission issues an order in the utility’s next general rate case. The commission must act within 60 days after the petition is filed.