Indiana House passes bill to slow utilities from shutting down coal plants

Despite opposition from utilities, environmentalists, business groups and consumer activists, the Indiana House of Representatives passed a bill Monday that prohibits utilities from shutting down coal plants without a state review.

The House voted 52-41 to approve House Bill 1414 and send it to the Senate for consideration.

Rep. Ed Soliday, R-Valparaiso, the bill’s author, said the state needs to “take a pause” while the energy landscape undergoes a huge shift from coal to natural gas and renewable energy, putting coal operators out of business.

He said a state energy task force needs to finish its study on how the transformation will affect energy supplies and reliability. The task force is set to submit its recommendations on Dec. 1. The bill has an automatic sunset date of May 1, 2021.

“Things are moving extremely rapidly. Things are changing everywhere.” Soliday said. “All we’re trying to do is take a contemplative approach…so things aren’t happening willy-nilly.”

But some of the bill’s opponents call the legislation a “coal-bailout bill,” designed to prop up the state’s struggling coal industry.

“A vote yes today is a vote to increase rates for your constituents,” said Rep. Ray Hatfield, D-Evansville.

That’s because Indiana utilities say they want to shut down numerous aging, inefficient coal plants in coming years, and have estimated they will save $4 billion from the transformation to cheaper, cleaner energy sources.

Rep. Matt Pierce, D-Bloomington, said numerous federal and state agencies already regulate Indiana’s energy reliability.

“This doesn’t seem like a very Republican bill,” Pierce said. “We’re picking out an industry for a bailout.”

Coal mines in Indiana are closing at a rapid pace. In 2010, the state had 26 active coal-burning power units. By 2016, it had just 13.

U.S. coal consumption is now at its lowest point in 40 years, and at least six major coal companies have gone bankrupt since 2015.

Coal still accounts for more than 60% of the state’s electricity generation, but several large Indiana utilities are planning to shut down thousands of megawatts of coal-fired generating capacity in favor of cleaner or cheaper fuel sources in coming years.

Utilities are now free to retire plants anytime they wish. Under this bill, they would have to have their plans reviewed by the Indiana Utility Regulatory Commission. The commission would issue a letter of opinion, but would not be able to block the utility’s plans. That would effectively slow utilities from any immediate closings.

Five large utilities have announced plans to retired coal-fired units, but none would close before 2023.

The bill would also provide state training for unemployed coal workers, and would allow utilities to recover the costs to stockpile up to 90 days’ worth of coal, about twice the current amount.

Rep. Alan Morrison, R-Brazil, called the bill “pro-worker,” because it would allow coal miners to be retrained. Some of the coal miners who lost their jobs are in his southern Indiana district.

But Rep. Carey Hamilton, D-Hamilton, said the bill was anti-worker and anti-business, because it could scare away innovative energy companies, such as manufacturers of solar panels and electric cars.

“This bill sends a message that they’re not welcome,” she said.

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2 thoughts on “Indiana House passes bill to slow utilities from shutting down coal plants

  1. This coal bill can best be described as the dumbest bill I have ever seen. It make no sense environmentally, it makes no sense economically, and it certainly makes no sense politically. Legislators who support this bill might as well put a sign on their backside that says “I am in the pocket of what is left of the coal industry!”. Put another way, it would be a “Kick Me!” sign, except it should add “kick me out of the State of Indiana House of Representatives/State Senate”. The coal industry is no long a significant employer in the state, since it is largely automated. It contribute to air pollution, and the health issues that accompany that. The residue that comes from the burning of coal is both an environmental and economic disaster into the future, passing those costs along to the taxpayers and ratepayers. I ask the question, what is dumber? Is it the passage of this bill or the legislators behind it?

  2. On the surface, this bill may indeed sound questionable. However, I heard the explanation for it at a legislative breakfast last week that makes it understandable and not given to the hysterics suggested by many, such as Rob B. above.

    That being this: Power Companies are regulated monopolies who must answer to the appropriate regulatory commission. The regulatory commission is tasked with looking out for the best interests of the consumers who pay the bills for the company’s services, not the power companies.

    In this case, it was pointed out that alternative energy sources, primarily natural gas through fracking, are subsidized, making the fuel unrealistically cheap…at least for the time being…

    If the subsidies are rescinded, the price of natural gas will go up, probably beyond the cost per KWH generated by coal-fired plants. If the power companies have shuttered all their coal-fired plants to chase the fiction of subsidized fuel sources and those subsidies go away, they companies have no choice but to charge a lot more than they are now charging for coal-produced electricity.

    This hurts consumers, for whom the regulatory commission are supposed to be “looking out.”

    Hence, the regulatory commission is looking out for consumers by insisting that coal-fired plants not be shuttered until the price and reality (wind, solar, etc) of alternate fuels has proven viable.

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