All Roll Calls
Yes: 122 • No: 18
IndianaSB 426First Regular Session 124th General Assembly (2025)Senate
Water utilities.
Sponsored By: Eric Koch (Republican)
Signed by Governor
Summary
Includes water utilities within the scope of the statute that subjects wastewater utilities that: (1) are not under the jurisdiction of the Indiana utility regulatory commission (IURC) for the approval of rates and charges; and (2) have been issued one or more enforcement orders by the department of environmental management; to a series of oversight actions by the IURC for each additional enforcement order, including rate review, rate regulation, and the initiation of a receivership proceeding. Makes a conforming amendment to the statute that governs the process by which water utilities and wastewater utilities may withdraw from the jurisdiction of the IURC. Amends the statute governing the acquisition of water utilities and wastewater utilities to require the IURC to consider and authorize mechanisms to allow utility companies to integrate into their systems, invest in, and earn on acquired utility assets, subject to a finding by the IURC that the proposed mechanism is just and reasonable and in the public interest. Amends the statute governing the recovery of costs for eligible infrastructure improvements made by water or wastewater utilities to provide that, in the case of a public utility (as defined in the Indiana Code), "infrastructure improvement costs" eligible for recovery include: (1) deferred depreciation expense; and (2) post in service carrying costs; for the eligible infrastructure improvements. Adds language to the Indiana Code chapter governing public water supplies to provide that a complaint: (1) seeking damages from a water utility; and (2) arising out of an alleged exposure to drinking water supplied by the water utility; is barred if the water supplied by the water utility met applicable regulatory standards under specified federal and state law. Amends the Indiana Code section prohibiting the department of natural resources (department) from regulating certain activities within the 100 year flood level of a water supply reservoir owned and operated by a municipality or a public utility for the purpose of providing water utility service to the public to also prohibit the department from ordering the closure or removal, or the partial closure or removal, of: (1) a dam that forms such a water supply reservoir; or (2) a dam that forms or contains a body of water that is used to supply one or more private water wells; if the closure or removal, or the partial closure or removal, of the dam would impact the provision of water utility service to the public or the supply of water to one or more private water wells.
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Bill Overview
Analyzed Economic Effects
5 provisions identified: 1 benefits, 2 costs, 2 mixed.
Limits on drinking water damage claims
Beginning July 1, 2025, the law bars certain damage claims against covered water utilities. The bar applies to claims about exposure to drinking water that met applicable safety standards. Those standards include the federal Safe Drinking Water Act, Indiana law, and Indiana State Board of Health rules. Households cannot recover money through a covered complaint when the water met those standards.
Protection for dams supplying drinking water
Indiana's Department of Natural Resources cannot order covered water-supply reservoir dams closed or removed, even partly, when public water service would be affected. This protection covers municipal and public-utility reservoir dams. It also covers dams supplying private wells when closure or removal would affect that water supply. The department keeps its authority over dam safety, maintenance, and emergency measures.
More infrastructure costs eligible for recovery
Beginning July 1, 2025, utilities can count more costs for eligible infrastructure improvements. These include deferred depreciation starting when the improvements enter service. They also include carrying costs after that date, compounded monthly using the commission's latest approved overall weighted cost of capital. That rate reflects the utility's financing costs. The added costs can affect what utilities seek to recover through customer bills; no household amount is set.
New earnings tools for utility acquisitions
Beginning July 1, 2025, the commission must authorize tools outside regular rate cases for utility acquisitions. These tools let companies combine acquired systems with their own, invest in them, and earn a return on acquired assets. They are in addition to the existing rate-base cost differential. Each plan must be just, reasonable, and in the public interest. The tools support system investment, but allowing earnings on acquired assets can also affect customer bills.
Repeat utility violations trigger rate oversight
Beginning July 1, 2025, enforcement-based rate oversight extends to water utilities whose rates are not otherwise commission-approved. Qualifying wastewater orders must come after June 30, 2022; water orders must come after June 30, 2025. After a first order, an informal review checks whether rates cover operations, maintenance, and debts, and whether asset management is adequate. For water service, this review requires 12 months to pass and the violation to remain unresolved. A second order for the same service within two years triggers commission rate control and a full rate case. One more rate case is required, no earlier than three years after the first rate order. Oversight lasts at least five years after the first rate order and one year after the second. Withdrawal then requires commission approval, completion of the required rate cases, and no further enforcement orders during that period. Stormwater revenue can count when setting wastewater rates, but the commission cannot set stormwater rates. Further orders or environmental or health concerns can lead the commission to seek a court-appointed receiver in consultation with environmental officials. Agency actions are subject to judicial review, but commission staff cannot be cross-examined in proceedings tied to the informal review. These rules add oversight of troubled systems, while rate cases can change customer bills.
Sponsors & Cosponsors
Sponsor
Eric Koch
Republican • Senate
Cosponsors
Alaina Shonkwiler
Republican • House
Andrea Hunley
Democratic • Senate
Blake Doriot
Republican • Senate
Edmond Soliday
Republican • House
J.D. Ford
Democratic • Senate
Jean Leising
Republican • Senate
Stacey Donato
Republican • Senate
Roll Call Votes
House vote • 3/20/2025
Third reading: passed
Yes: 76 • No: 15
Senate vote • 2/11/2025
Third reading: passed
Yes: 46 • No: 3
Actions Timeline
Signed by the Governor
4/3/2025SenatePublic Law 24
4/3/2025SenateSigned by the President of the Senate
3/27/2025SenateSigned by the President Pro Tempore
3/24/2025SenateSigned by the Speaker
3/24/2025HouseReturned to the Senate without amendments
3/21/2025HouseThird reading: passed; Roll Call 292: yeas 76, nays 15
3/20/2025HouseRepresentative Hamilton removed as cosponsor
3/20/2025HouseRepresentatives Shonkwiler and Hamilton added as cosponsors
3/20/2025HouseSecond reading: ordered engrossed
3/17/2025HouseCommittee report: do pass, adopted
3/13/2025HouseFirst reading: referred to Committee on Utilities, Energy and Telecommunications
3/3/2025HouseReferred to the House
2/12/2025SenateHouse sponsor: Representative Soliday
2/11/2025SenateSenators Leising, Ford J.D., Donato added as coauthors
2/11/2025SenateSenator Hunley added as third author
2/11/2025SenateThird reading: passed; Roll Call 108: yeas 46, nays 3
2/11/2025SenateSenator Doriot added as second author
2/10/2025SenateSecond reading: amended, ordered engrossed
2/10/2025SenateAmendment #1 (Koch) prevailed; voice vote
2/10/2025SenateCommittee report: amend do pass, adopted
2/6/2025SenateAuthored by Senator Koch
1/13/2025SenateFirst reading: referred to Committee on Utilities
1/13/2025Senate
Bill Text
Engrossed Senate Bill (H)
Enrolled Senate Bill (S)
Introduced Senate Bill (S)
Senate Bill (S)
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