Anti-consumer energy laws passed in Indiana over the last two decades need to be repealed.

June 2012

The Indiana General Assembly passed four bills of note that threaten ratepayer wallets and impede robust energy efficiency and renewable energy markets in Indiana.  The only reason that these bills were needed by utility companies is because the investments are unnecessary and Wall Street considers them too risky to finance.  These bills shift the financial risk from utility companies onto the backs of ratepayers.

• Senate Enrolled Act 560 (2013) allows Indiana electric and natural gas to raise your rates virtually automatically, and at the same time effectively deregulates most of their monopoly revenue and profits.  SB560 gives the utilities a tracker for transmission and distribution, instead of requiring a full rate case before the Indiana Utility Regulatory Commission (IURC). This gives them excessive profit to do something they are supposed to be doing anyway: provide reliable electric and gas service. Trackers shift the burden of cost and risk of running a monopoly utility company from voluntary investors to captive ratepayers.

  SB560 also contains “self-implemented rate-making,” the ability for the utilities to raise base rates virtually automatically. It will allow the utilities to increase your rates up to 75% of the rate hike they are asking for if the IURC has not issued an order after 300 days, less than a year.

   

• Senate Enrolled Act 340 (2014) kills the Energizing Indiana programs, allows the largest users of electricity to not pay into or participate in future energy efficiency programs, and forbids the IURC from requiring the utilities to use an independent 3rd party administrator, like Energizing Indiana, to run future energy efficiency programs in Indiana. These programs have been running for a couple of years now, and they're working - energy efficiency is reducing the demand for electricity in our state.  This reduces the need to build more power plants, which means we don't have to pay for more power plants, which keeps our electric bills from skyrocketing.  

   

• Senate Enrolled Act 29 (2002) allows for construction work in progress (CWIP).  This allows utilities to charge ratepayers for the power plant while it is under construction, before it is producing any electricity, and even if it NEVER produces any electricity.  This bill enabled Duke Energy’s problem-plagued and scandal ridden Edwardsport IGCC plant to be financed by Duke ratepayers, a plant which is now close to $1.5 billion over budget.

   

• House Enrolled Act 1722 (2007) and Senate Enrolled Act 423 (2009) - force ratepayers into a 30-year contract to purchase substitute natural gas (SNG) from an out of State investment firm (Leucadia, a.k.a. Indiana Gasification, LLC), regardless of the fact that less expensive gas is available on the market.  The intent of this bill was to enable the construction of the Indiana Gasification SNG plant proposed for Rockport, IN, which if built, will cost Indiana gas ratepayers billions in unjust and unreasonable charges.

   

• Senate Enrolled Act 251 (2011) defines nuclear power and coal gasification as “clean” energy and provides utilities with huge and unnecessary incentives for investments that they’ve already made or have been ordered to make. SEA251 shifts ALL of the costs of ANY Federal mandate onto the backs of consumers without the requirement that utilities provide the least cost energy.  Indiana Michigan Power cited SEA251 as justification in their 2013 filing before the IURC to force ratepayers to assume ALL of the costs and risks associated with a $1.4 billion project for their DC Cook nuclear power plant in Bridgman, MI, that serves I&M ratepayers.

Indiana needs an energy policy that protects the well-being of Hoosiers!

Legislators are ignoring policies that can benefit taxpayers, ratepayers, and the economy as a whole.  Instead, they work to protect the monopoly utilities at taxpayer and ratepayer expense.   We need policies and programs that accelerate the market preference for efficiency and renewables.  These represent the least cost approach for taxpayers and ratepayers.  Efficiency and renewables create the most jobs, improve quality of health, and address air quality and other hazardous emissions in a cost-effective, responsible manner.

Pro-consumer Indiana energy policies like these need to be enacted:

• Mandatory Renewable Electricity Standard: A renewable electricity standard would mandate that Indiana utilities must generate a certain percentage of their electricity using renewable electricity by a certain date.  The definition of “renewable” must be limited to wind, solar, geothermal, and hydroelectric power, and must exclude the use of fossil fuels, nuclear power, and burning trash.

   

• Feed in Tariff (FIT): A feed in tariff would allow individuals, small businesses, and organizations to generate their own electricity, and would require the utilities to buy that electricity at a premium.  This would not only encourage the growth of renewable electricity and distributed resources, it would allow people willing to invest in these resources to recover their investments and to make a modest profit once the investment has been paid off.  This would be especially beneficial for entities that give back to the community - churches, community groups, schools, libraries, etc.

   

• Property Assessed Clean Energy (PACE):  PACE helps individuals, small businesses, and organizations to finance their renewable energy investments through municipal loans that are paid back through property taxes.  This allows these entities to realize the energy savings from these investments even before the investments are completely paid off.

   

• Elected utility regulators:  Indiana is one of only three states where the Regulatory Commission is appointed by the Governor with virtually NO oversight by either the public or the legislative branch.  There is a revolving door and an all-too-cozy relationship between the regulators (the IURC) and the regulated (the utilities).  The result is that average electric bills across Indiana have increased by about 45% in the past ten years.  Allowing us to elect our utility regulators will go a long way toward building accountability into the regulatory structure and ensuring that regulators are working to protect consumers.