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Green bills sprout at Statehouse

January 12, 2009
Bills requiring electric utilities to supply a portion of their power in the form of renewable energy shorted out during the last session of the Indiana General Assembly.

But potentially the most aggressive measure yet has been filed this session, requiring utilities to provide at least 25 percent of their power by 2026 in the form of wind turbines, landfill gas or other renewable sources.

It's among a handful of green legislation filed or contemplated for the 2009 session ranging from creating jobs through alternative energy manufacturing to updating building codes to spur energy efficiency and job growth.

Senate Bill 36, filed by Sen. Tim Lanane, D-Anderson, would create a so-called renewable energy standard for Indiana. The required percentage of green power supplied would rise in six increments from 2 percent in 2011 to the 25-percent minimum in 2026.

Utilities failing to hit the mark would pay a penalty: the number of megawatt hours of renewable energy short of the target multiplied by $50.

Those penalties would be deposited in a "renewable energy resources fund." It would be administered by the Indiana Economic Development Corp. and would be used to support development and construction of renewable energy projects in the state.

The IEDC, with guidance from the Indiana Utility Regulatory Commission, would also "develop a strategy to attract renewable energy manufacturing facilities, including wind turbine component manufacturers, to Indiana."

Such manufacturing is more than speculative in a state better known for a preponderance of coal-fired power plants. Last October, Italian manufacturer Brevini announced it was moving its U.S. headquarters to Muncie and opening its first North American wind turbine gear design and manufacturing center there.

Currently, Duke Energy and Indianapolis Power & Light buy relatively small amounts of electricity from wind farms popping up in Benton County and thereabouts in the northern third of the state. Recently, IPL sought requests for proposals to add up to 200 more megawatts of energy to its system from renewable sources such as wind or biomass gas.

Lanane's bill isn't wedded to wind and other more popular green-generation modes. It also allows utilities to count toward meeting the standard certain types of energy-efficiency programs that reduce electric consumption, such as home weatherization and lighting-efficiency modifications.

That might make the bill more palatable to the state's electric providers. The Indiana Energy Association, which represents utilities, has argued that wind's unpredictability requires costly backup systems that raise costs compared with conventional generation.

Citizens Action Coalition, a group that has advocated energy efficiency and alternative generation, counters that the issue is less about actual costs than about electric utilities and their friends in the Legislature being too beholden to the state's coal industry.

Whatever the case, it's clear Indiana has lagged behind many of its neighboring states by not adopting a renewable energy standard. Indiana became the only state in the upper Midwest not requiring utilities to supply a percentage of power from renewable sources when Michigan, last November, mandated 10 percent by 2015.

Environmental groups say Indiana, which generates the vast majority of electricity from coal, is particularly vulnerable to carbon dioxide regulations expected to be mandated by the federal government. The State Utility Forecasting Group at Purdue University previously estimated that electric rates could rise about 45 percent by 2025 under some of the future carbon-regulation scenarios envisioned.

"We're putting our fantastic manufacturing sector at risk by not thinking of the implications of carbon controls," said Jesse Kharbanda, executive director of the Hoosier Environmental Council.

The HEC is backing other pro-environment bills that, as of IBJ deadline, had not yet been filed. Among them would be one known as the "green jobs development act," which the council said would provide a stimulus for retrofitting buildings for energy efficiency.

Rep. Ryan Dvorak, D-South Bend, and Sen. Sue Errington, D-Muncie, are expected to file a measure that may encompass a renewable electricity standard. It may also include net metering regulations allowing residents and businesses that generate their own electricity to roll their meters backward and send excess power back to the grid, and an update to the state's 15-year-old commercial building code to require more energy-efficient buildings.

"If you want job creation immediately, you go to efficiency," said Grant Smith, executive director of Citizens Action Coalition. "There is a lot of retrofitting to be done and a lot of jobs to be had."

Proposed energy-efficiency standards for public buildings failed during the last legislative session. A number of commercial and public buildings in recent years have been constructed to the Leadership in Energy and Environmental Design, or LEED, specifications of the U.S. Green Building Council, but "they're an extraordinarily small minority," Kharbanda said.

Some environmentally friendly bills are expected to be filed in the realm of transportation. The HEC said it expects State Rep. Terri Austin to again propose a funding mechanism that would allow municipalities to capture a portion of state sales tax toward public transit uses such as commuter rail and bus service.
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