Authority: IC 8-1-1-3; IC 8-1-31-17

Affected: IC 8-1-2; IC 8-1.5-3-8

Sec. 1. (a) The definitions in this section apply throughout this rule.

(b) "Commission" means the Indiana utility regulatory commission.

(c) "Distribution system" means:

1. (1) distribution mains;
2. (2) valves;
3. (3) hydrants;
4. (4) service lines;
5. (5) meters;
6. (6) meter installation;
7. (7) and other appurtenances;

necessary to transport treated water from the point it exits the treatment facility to the point at which it is delivered to the customer.

(d) "Distribution system improvement charges" or "DSIC" means a distribution system improvement charge approved under IC 8-1-31.

(e) "DSIC costs" means depreciation expenses and the pretax return associated with eligible distribution system improvements.

(f) "DSIC revenues" means utility revenues produced through a DSIC exclusive of revenues from all other rates and charges.

(g) "Eligible distribution system improvements" means new used and useful water utility plant projects that:

1. (1) do not increase revenues by connecting the distribution system to new customers;
2. (2) are in service; and
3. (3) were not included in the utility's rate base in its most recent general rate case.

(h) "Utility" means every public or municipally-owned utility.

(i) "Public utility" means every:

1. (1) corporation;
2. (2) company;
3. (3) partnership;
4. (4) limited liability company;
5. (5) individual; or
6. (6) association of individuals;

or their lessees, trustees, or receivers appointed by a court, that may own, operate, manage, or control any plant or equipment within the state for the production, delivery, or furnishing of water.

(j) "Municipally-owned utility" includes every utility owned or operated by a municipality.

(k) "Pretax return" means the following:

1. (1) For investor-owned utilities the revenue necessary to:

   1. (A) produce net operating income equal to the utility's weighted cost of capital multiplied by the original cost of eligible distribution system improvements; and
   2. (B) pay any state and federal income taxes applicable to such income.

2. (2) "Pretax return" for a municipally-owned utility:

   1. (A) the average annual debt service associated with the distribution system improvement; or
   2. (B) the return on plant under IC 8-1.5-3-8 granted in its most recent rate case computed by multiplying the authorized return times the cost of eligible distribution system improvement.

(Indiana Utility Regulatory Commission; 170 IAC 6-1.1-1; filed Sep 27, 2005, 8:45 a.m.: 29 IR 456; readopted filed Sep 23, 2011, 11:52 a.m.: 20111019-IR-170110397RFA; readopted filed Aug 2, 2013, 2:16 p.m.: 20130828-IR-170130227RFA; readopted filed Apr 11, 2019, 9:04 a.m.: 20190508-IR-170190136RFA; readopted filed Sep 12, 2025, 11:43 a.m.: 20251001-IR-170240381RFA)