170 IAC 4-8-5 Cost recovery

Sec. 5. (a) The commission shall approve the recovery of reasonable energy efficiency program costs and may approve the recovery of reasonable demand response program costs on a timely basis through a periodic rate adjustment mechanism. (b) The commission shall limit the periodic rate adjustment mechanism to the incremental energy efficiency program costs or demand response program costs, or both, not already included in the utility's base rates, if applicable. (c) Nothing in this rule precludes a utility from requesting or the commission from approving in a rate case the following: (1) The inclusion of the energy efficiency program costs or demand response program costs, or both, in the utility's base rates using a balancing account, where appropriate, to reconcile the utility's recovered expenditures. (2) The inclusion of the capital cost, with accumulated AFUDC, in the utility's rate base amortized over a period set by the commission. (3) The accumulation, with a carrying charge, of the non-capital cost incurred and not otherwise recovered through the utility's base rates or through periodic adjustments in a deferred account to be amortized over a period set by the commission. (d) Recovery of energy efficiency program costs or demand response program costs, or both, under this section shall continue as determined by the commission provided that the utility maintains satisfactory EM&V activities as specified in section 4 of this rule. (e) To ensure that energy efficiency program and demand response program benefits and costs are allocated between utility shareholders, participants, and nonparticipants in a fair and economical way, the utility must demonstrate to the commission that a customer incentive paid by the utility for participation, when combined with the reduction in the participant's utility bills: (1) reflects the net benefit of the energy efficiency or demand response program to the utility and customers; and (2) minimizes cross-subsidies between customer groups and between program participants and nonparticipants within a customer group.