Authority: IC 8-1-1-3; IC 8-1-8.5-10

Affected: IC 8-1-8.5

Sec. 7. (a) A utility may propose a financial incentive based on particular attributes of an energy efficiency program or demand response program and the program's desired results. A financial incentive may include, but is not limited to, the following:

1. (1) Granting a utility a percentage share of the net benefit attributable to an energy efficiency program or demand response program.
2. (2) Allowing a utility to earn a greater than normal return on equity for a rate-based energy efficiency program or demand response program costs.
3. (3) Adjusting a utility's overall return on equity in response to quantitative or qualitative evaluation of an energy efficiency program's or demand response program's performance.

(b) The commission may terminate a financial incentive.

(c) A financial incentive shall not provide an incentive payment for an energy efficiency program or demand response program unless the net kilowatt or kilowatt-hour impact, or both, can be reasonably determined.

(d) Load building and load retention programs are not eligible for financial incentives.

(e) A financial incentive must reflect the value to the utility's customers of the supply-side resource cost avoided or deferred by the utility's energy efficiency program or demand response program minus the incurred utility program costs.

(f) To reflect only the energy efficiency and demand impact of an energy efficiency program or demand response program, the financial incentive must exclude the effect of free-riders from the incentive calculation.

(g) A financial incentive may be based on forecasted demand reductions or energy savings until the information on demand reductions and energy savings from the utility's EM&V activities becomes available.

(Indiana Utility Regulatory Commission; 170 IAC 4-8-7; filed Aug 31, 1995, 10:00 a.m.: 19 IR 28; readopted filed Jul 11, 2001, 4:30 p.m.: 24 IR 4233; readopted filed Apr 24, 2007, 8:21 a.m.: 20070509-IR-170070147RFA; readopted filed Aug 2, 2013, 2:16 p.m.: 20130828-IR-170130227RFA; filed Dec 5, 2018, 11:49 a.m.: 20190102-IR-170180127FRA; readopted filed Apr 11, 2019, 9:04 a.m.: 20190508-IR-170190136RFA; readopted filed Sep 12, 2025, 11:43 a.m.: 20251001-IR-170240381RFA)