Investing.com -- Bank of America said Indiana's utility regulator is conducting a broader review of electric utility rules, with increased focus on how risk and returns are shared between utilities and customers under multi-year rate plans.

The Indiana Utility Regulatory Commission held technical conferences that examined how risk should be measured and divided under multi-year rate plans, with emphasis on transparency and affordability, according to BofA. The bank said Indiana remains supportive of utilities but future proceedings may require more detailed justification for returns on equity and cost-recovery methods.

In Cause No. 46428, staff focused on creating a historical risk baseline before evaluating how multi-year rate plans affect utility and customer risk, BofA said. The review extends beyond return on equity methodology to include equity capitalization, credit metrics and total financing costs. Staff questioned whether parent-company comparison groups always provide appropriate benchmarks for regulated operating utilities.

BofA said multi-year rate plans should reduce regulatory delays and improve cost recovery, supporting utility credit quality. The bank noted that parties may argue that forward test years, annual rate-base adjustments and reopener provisions reduce utility risk and should be reflected in authorized returns.

In Cause No. 46429, staff examined whether cost-recovery trackers remain necessary under multi-year rate plans, BofA said. Staff identified three core considerations for tracker eligibility: whether costs are outside utility control, volatile and materially significant.

The bank said the discussion did not indicate complete elimination of trackers, as statutory trackers will remain subject to existing law. BofA expects tighter standards, potential consolidation and clearer distinctions among capital, expense and customer-benefit trackers.

Initial issue-list suggestions are due on Aug. 21, followed by responsive comments on Aug. 28. The commission expects to issue formal issue lists and procedural schedules in September.