The Senate passed a bill Tuesday meant to boost energy-efficiency efforts that could result in a spike in utility bills for customers.
Senate Bill 412 moves to the House for consideration after receiving approval in the Senate 42-8.
The bill, authored by Sen. Jim Merritt, R-Indianapolis, would replace the Energizing Indiana program, which the General Assembly canceled last year over the objection of environmental groups.
Energizing Indiana imposed a fee on the electric bills of all Hoosier households and businesses to pay for conservation efforts that included weatherization and other programs. Critics – including Merritt – said the program had become too expensive to administer.
SB 412 requires public utility companies to create an energy-efficiency plan that is reviewed by a third party and later submitted to the Indiana Utility Regulatory Commission. Merritt said the IURC will continually track and monitor the energy plan to make sure the requirements are being met. He said the goal of the bill is to create a “cost-effective” energy-efficiency plan for the future of the state.
The part of the bill that has stirred some controversy is the impact these programs will have on certain consumers and the ability of the companies to recoup money they’ve lost as customers become more efficient. The recovery amount would be approved by the IURC and become part of the company’s rates.
Merritt said residential consumers will be charged for the electric utility’s plan on top of their fixed rates, and industrial customers are able to opt out of the program and the fees.
Sen. Vaneta Becker, R-Evansville, voiced her opinion on that exclusion.
“I have concerns for a bill that eliminates large users from even having to participate in the program,” Becker said.
Sen. Jean Breaux, D-Indianapolis, said those sections of the bill go against the bill’s larger goal of cost effectiveness. Breaux said she was concerned that the utility will “charge me more on my bill to offset the lost revenues from me conserving energy,” and questioned what incentive consumers have when they have to pay to participate.
Merritt defended the lost revenue provision, saying that utility companies will have to base it on the “historical forecast” of the area in which they operate. In other words, utility companies will have to base their lost revenue figures on past data and adjust it in the future accordingly.
He also said Indiana is not alone in including the concept of lost revenues. He said 33 other states allow lost revenues to be regained in fixed costs. Merritt said that the utilities will be closely monitored and that the legislative council will analyze the results on an annual basis.