Bill creating water withdrawal regulations expected to pass House committee amid LEAP concerns

The Wabash River in Lafayette, October 2022 (Eric Learned/IBJ photo).

Amid controversy surrounding solutions to an Indiana economic development project’s water woes, legislation that would add a layer of oversight to similar proposals is poised to pass out of a key House committee.

Senate Bill 4 would create the state’s first set of water withdrawal regulations. Under the bill, utility companies or developers would need to obtain a certificate of public convenience and necessity in order to build infrastructure that would pipe over 10 million gallons of water per day to a location at least 30 miles away.

“Water is a very critical resource, and as our economy grows, sometimes there is a need for water in places that it’s not,” bill author Sen. Eric Koch, R-Bedford, said during the committee’s Tuesday afternoon meeting. “And how do we balance that? This bill brings that balance. It also brings oversight and transparency.”

To obtain a permit for a long-distance water project, a developer would need to submit an application to the Indiana Utility Regulatory Commission including information about the project’s purpose, withdrawal volume, estimated cost, environmental impact and ratepayer cost burdens. A public hearing on the application would also be required. The entire process, including potential audits and revocations, would be overseen by the regulatory commission.

House Utilities, Energy and Telecommunications Chair Rep. Ed Soliday, R-Valparaiso, did not call the bill for a vote, allowing lawmakers to work on a minor amendment involving water main extensions, which typically don’t extend over 30 miles.

The bill is expected to be called for a committee vote next week. It would then move to the House floor for consideration.

“We have time. That’s the benefit of the long session,” Koch told IBJ. “We want to make sure we get this right, and so I don’t see any harm in letting it stay in committee for another week.”

Lawmakers weigh in on water management

Mounting questions related to how the LEAP Research and Innovation District in Boone County will meet its water needs compelled Indiana lawmakers to take a more active role in water management policy. (LEAP stands for Limitless Exploration/Advanced Pace.)

“This bill isn’t about LEAP,” Koch said. “It’s about the next LEAP.”

Soliday said crafting water policy is very complex, akin to “nailing Jell-O to a tree.” He said he and Koch have studied the issues in several task forces and more study topics continue to pop up.

Over the last two years—after water quantity issues for the project arose—the Indiana Economic Development Corp.-led LEAP District has sparked debate about how the state manages its water supply. The state’s ambitious economic development district seeks to land more advanced manufacturing businesses, such as microelectronics and life sciences, which tend to be water-intensive.

However, the tech park requires outside water sources because Boone County doesn’t have sufficient resources to support long-term plans for the 9,000-acre campus. State officials first considered a 35-mile Wabash River aquifer pipeline but instead elected to pursue an extension of the Citizens Energy system. The state has approved $325 million in loans and additional bond support to help underwrite the Citizens extension.

“People got a little ahead of their skis,” Soliday said regarding LEAP. “I can say, from my side of the aisle, there’s a lot of nervousness, and I think there are others that are going to proceed with caution.”

Business sector lobbyists supported the legislation during public testimony, while others recommended adding more environment and ratepayer protections to the bill.