Solar farm is a tax

October 1, 2011

It is ironic that in the same [Sept. 26] issue where the lead editorial warns that alternative energy is “fraught with risk” and cautions against government subsidies, IBJ provides only cursory page 6 coverage of the Indianapolis Airport Authority’s awarding of a contract to a private company to develop and operate a “$35 million to $45 million” solar farm.

An earlier IBJ online story quoted the airport as saying “no public or airport funds are expected to be involved in the project.” The reality is that this project is to be 100-percent funded by the “public” in the form of the captive and unrepresented ratepayers of the Indianapolis Power & Light utility monopoly.

The fundamental economic principle behind this project is outrageous and unjustifiable payments to be made by IPL to the airport (and by extension, the project developer/operator) under its “Renewable Energy Production” tariff. IPL’s tariff provides for a payment of 20 cents per kilowatt hour produced by solar projects of this type. This represents a premium of eight times over IPL’s published cost of 2.5 cents per kilowatt hour for the production of an incremental kilowatt hour of power.

Most noteworthy, the tariff approved by the Indiana Utility Regulatory Commission further provides for the cost for this inefficient solar project to be allocated to and recovered from the basic rates paid by all IPL customers and not IPL shareowners.

This scheme represents an unwarranted transfer of wealth from IPL ratepayers to the airport authority and the project developer/operator. Quite simply, it is taxation without representation.
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Stephen Woodrow
Indianapolis
 

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