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Big businesses fight over Indiana energy program

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Two giant corporations that sell products that save electricity have weighed in to try to rescue an Indiana program designed to promote energy efficiency, pitting them against other big businesses who want Gov. Mike Pence to kill it.

Honeywell and Ingersoll Rand, which both have operations in Indiana, warned in a joint statement this week that it would "set the state back years," if Pence signs legislation passed by the Republican-dominated legislature to halt the program called Energizing Indiana at year's end.

Ingersoll Rand sells energy-saving heating and air conditioning systems while Honeywell makes products that help industrial motors power up and down more efficiently. Both benefit from rebates under the Indiana program.

Those rebates and other incentives are financed through fees utility customers pay. The Indiana Manufacturers Association, which represents some 1,400 companies, including big steelmakers such as ArcelorMittal and Nucor Steel, lobbied to kill the program. The industry group said the program has increased its members' electricity bills by 1 to 3 percent.

The fight between the different businesses has landed in the lap of Pence, a Republican champion of business, who must decide by March 27 whether to sign or veto the legislation, or it will automatically become law.

Pence said last Friday after lawmakers ended their session that he'll "very carefully consider the importance of energy efficiency programs and conservation" that he called "an important aspect" of Indiana's energy strategy.

"But we're also going to take a careful look at the overall energy costs in the state of Indiana and then we'll try and make the best decision we can based on balancing those interests," he said.

Although the program's website says it's saved enough electricity in the past two years to power nearly 79,000 Indiana homes, opponents argued during the legislative session that it has proven too costly, and that industrial users were getting few benefits under the program.

The bill sponsored by Sen. Jim Merritt, R-Indianapolis, would prohibit the Indiana Utility Regulatory Commission from extending or beginning new contracts with the program after this year. It also would also prevent the commission from requiring utilities to meet specific energy efficiency goals.

Merritt said the program has cost Indiana ratepayers $500 million since it was started and would cost another $1.9 billion by 2019.

On Tuesday, members of the Sierra Club, the Citizens Action Coalition, and Hoosier Interfaith Power and Light delivered about 4,100 signatures, including some signed on online petitions, to Pence's office asking the governor to save the program.

Jodi Perras, director of the Sierra Club's Beyond Coal campaign in Indiana, said companies such as Honeywell and Ingersoll Rand have mobilized because the late-session changes to the bill that would effectively end the program they have benefited from.

"This happened so quickly, the business community didn't have a chance to testify because this came out of the blue really quickly, so now they're trying to get involved," she said.

Honeywell spokesman Aaron Parker said the company, which has about 1,100 employees at six Indiana locations, offers rebates through Energizing Indiana for its variable frequency drives for commercial and industrial customers. Those save energy by allowing motors to ramp up and down, instead of operating in a simple on-or-off mode, he said.

Rebates for the company's energy-efficiency commercial lighting systems are also offered through Indiana's program.

Ingersoll Rand spokeswoman Paige Muhlenkamp said the company sells numerous energy-efficient products, including the Trane brand of heating and air conditioning systems for residential and commercial users. Rebates for those products are also offered through Energizing Indiana, she said.

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  • Merritt's Argument Seems Weak
    I'm still trying to figure out where Merritt got his $500 million and $1.9 billion estimated costs to ratepayers. His argument might be more persuasive if he could explain how these costs where determined. In addition, I thought the Public Utilities Commission determined rates and I doubt that the Energize Indiana Program would have caused the Commission to allow higher rates. Merritt seems to be just protecting his large campaign donors.
  • End The Subsidies
    If these products are so beneficial to the end users in terms of energy cost savings or lower operational costs, then they'll still buy them without the rebates. If however the ONLY way they were cost beneficial was because taxpayers and/or consumers were paying more to cover them, then they are a bad deal, and the manufacturers need to figure out how to produce them for less. If I were to be cynical, I'd suggest that the "rebate" does nothing more than pad the profit on these things.

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