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Indiana House panel amends utility rate bill

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Indiana manufacturers and consumer groups opposed to a bill that would make it easier for power companies to raise their rates won concessions Wednesday from House lawmakers trying to strike a balance between the needs of businesses and the utilities.

The House Utilities & Energy Committee passed the bill sponsored by Sen. Brandt Hershman, R-Buck Creek, after its chairman, Rep. Eric Koch, proposed several amendments to address business and ratepayer concerns, The Indianapolis Star reported.

The amendments include a cap on the amount of rate increase utilities can seek for upgrades such as new power lines and natural gas lines, and a reduction of temporary rate hikes that utilities would be allowed to implement if state regulators don't decide on a proposed rate increase within the new deadlines.

Consumer groups and big companies such as Eli Lilly and Co. and Honda have contended the bill as originally proposed would drive up energy bills and could push manufacturers out of the state.

"It presents a significant obstacle to us being able to do business in Indiana," said Chris Olsen, vice president of government affairs at Tate & Lyle, a manufacturer of high-fructose corn syrup. "We operate in other states with much lower costs."

Indiana's utilities say the legislation would simply accelerate rate increases, not make those increases larger. The bill would allow utilities to seek rate increases for upgrades such as replacing power lines or natural gas pipelines more frequently through a more limited review process known as "tracking."

Ed Simcox, president of the Indiana Energy Association, the trade group for the state's investor-owned utilities, said new federal environmental regulations and Indiana's dependence on coal are to blame for rising costs.

"There is nothing in this bill that increases costs to the consumer," he said.

But the state's big manufacturing companies, which employ thousands of Indiana residents, have feared the bill would add to already rising electric rates.

The companies have seen Indiana electricity rates shoot up nearly 62 percent over the last 10 years. Residential rates have increased 47 percent.

"Our annual (energy) bill is in the tens of millions of dollars," said Olsen, the Tate & Lyle official. "Energy as a whole is our second largest cost of doing business. If we had the same rates in Indiana that we have in Illinois, we'd be saving millions a year."

AARP Indiana President Clyde Hall testified against the bill during the House panel's hearing Wednesday.

"Any time there's any legislation that's going to raise rates, it's going to get our concern," he said. "Allowing the utility companies an easier and faster way to raise rates ... is not in the best interest of those on fixed incomes."

Jennifer Terry, who represents a group of 23 Indiana manufacturers that had opposed the bill, said the group had changed its position to neutral after the amendments.

"The amendments do go a ways toward addressing our concerns," she said.

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  1. You are correct that Obamacare requires health insurance policies to include richer benefits and protects patients who get sick. That's what I was getting at when I wrote above, "That’s because Obamacare required insurers to take all customers, regardless of their health status, and also established a floor on how skimpy the benefits paid for by health plans could be." I think it's vital to know exactly how much the essential health benefits are costing over previous policies. Unless we know the cost of the law, we can't do a cost-benefit analysis. Taxes were raised in order to offset a 31% rise in health insurance premiums, an increase that paid for richer benefits. Are those richer benefits worth that much or not? That's the question we need to answer. This study at least gets us started on doing so.

  2. *5 employees per floor. Either way its ridiculous.

  3. Jim, thanks for always ready my stuff and providing thoughtful comments. I am sure that someone more familiar with research design and methods could take issue with Kowalski's study. I thought it was of considerable value, however, because so far we have been crediting Obamacare for all the gains in coverage and all price increases, neither of which is entirely fair. This is at least a rigorous attempt to sort things out. Maybe a quixotic attempt, but it's one of the first ones I've seen try to do it in a sophisticated way.

  4. In addition to rewriting history, the paper (or at least your summary of it) ignores that Obamacare policies now must provide "essential health benefits". Maybe Mr Wall has always been insured in a group plan but even group plans had holes you could drive a truck through, like the Colts defensive line last night. Individual plans were even worse. So, when you come up with a study that factors that in, let me know, otherwise the numbers are garbage.

  5. You guys are absolutely right: Cummins should build a massive 80-story high rise, and give each employee 5 floors. Or, I suppose they could always rent out the top floors if they wanted, since downtown office space is bursting at the seams (http://www.ibj.com/article?articleId=49481).

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