Savannah Kerstiens: Understanding Indiana’s rising electricity rates

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2 thoughts on “Savannah Kerstiens: Understanding Indiana’s rising electricity rates

  1. This view from the coal industry is a great reminder that our regulated utilities are allowed to recover their capital costs in the form of rate increases (rate-based regulation) – whether that is from fuel cost increases, capital improvements, or plant decommissionings. Whatever the technology, capital investments (assets) are paid for by Hoosiers.
    However, this article’s focus on coal fails to mention the most positive market developments for regulated utilities and Hoosiers alike – which is renewable energy – and more specifically, solar power. This story about regulation cannot be told accurately today without highlighting solar + storage:
    – Solar installation costs have dropped by nearly 40% over the last decade.
    – The US added record amounts of solar + storage to the grid in 2023 & 2024.
    – According to the US Energy Information Administration, solar and energy storage made up 81% of new U.S. electric-generating capacity in 2024 (there are no plans for any new coal additions)
    – Solar is adding more capacity to the U.S. grid than every other energy source combined.
    – Solar plus storage are the fastest and most cost-effective technologies to deploy.
    – Over the next 5 years, the U.S. solar and storage industry is expected to add at least 200 GW of new solar capacity, nearly the same amount of solar that we have installed today.
    – According to Lazard which has been tracking the Levelized Cost of Energy for the past 17 years, the cost of solar is less than half the cost of coal and lower than gas; and when energy storage is added to firm up solar generation, solar is still lower than coal.
    – The Edison Electric Institute estimates that maintaining the current framework for tax credits (including renewable energy & solar) will enable electric companies to lower customer bills by $45 billion between 2025 and 2032.
    Furthermore, while the concept of small modular nuclear reactors is an interesting topic for technology futurists, they are not currently economically feasible, nor permittable, nor deployable. The mention of a non-existent technology is nothing more than green window dressing. And it is a disservice to Hoosiers to use words like “sustainable” and “environmental” in support of additional coal generation. If you want to talk about sustainable solutions, look no further than solar, wind, and energy storage.

  2. All good points by Mick M. Also, the General Assembly killing the statewide energy efficiency program (Energize Indiana) and net metering for rooftop solar (which allowed rooftop solar customers to actually save money on their bills) has contributed greatly to rising costs. The virtual sole emphasis on utility-scale investment – mainly natural gas, coal, and transmission/in the future nuclear power – and lack of emphasis on distributed resources – home and business-owned solar + storage + expansive demand response programs – is what is driving up ratepayer electric bills. We really need a statewide (in every county) dialogue on our energy options and costs, initiated by the GA or League of Women voters or other organization that will host a serious discussion of how to achieve affordability while maintaining reliability. And the consumer side has to be represented – not just nat gas, coal and nuclear advocates along with the utility lobby. The supermajority at the Statehouse is heading in the diametrically opposed direction it should be with respect to utility/energy policy. In terms of the viewpoint here, the O&M costs for coal-fired power plants rise with age. And they are vulnerable to extreme weather events that will only increase with time.

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