State energy group takes cautious approach in industry transition to renewables

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A state legislative panel tasked with charting Indiana’s energy future on Wednesday approved recommendations that at times pit budget-friendliness and reliability against a shift toward alternative fuel sources that is already in progress.

“Over the last two years, we’ve worked on a bipartisan basis to hear from experts and stakeholders to craft recommendations for a comprehensive energy policy for our state,” said 21st Century Energy Policy Development Task Force Co-Chair Rep. Ed Soliday, R-Valparaiso, in a written statement. “Our goal is for Indiana to utilize a mix of energy sources that don’t compromise reliability and affordability, because that’s what everyday Hoosiers and businesses expect.”

The task force is helping Indiana navigate utility and energy regulations amid fuel and bill increases and advancing technologies. It approved 13 recommendations in a draft final report that could result in proposed legislation during the session in January.  The group has already had some earlier recommendations come to fruition.

“We didn’t always agree on the legislation that came from it,” Soliday said, “but there were actual products out of the task force that we hope make a difference and we’re in a very, very changing world.”

Underpinning the recommendations was what the task force considers the five “pillars” of electric utility service: reliability, resilience, stability, affordability and environmental sustainability.

One goal: that Indiana’s average residential, commercial, and industrial retail electric rates be within the cheapest 25% of all states by the end of 2030.

Navigating new energy sources

Several suggestions focused on alternative fuel sources, such as one recommending legislation slashing the percentage of capacity that regulated utilities can buy in market under statute. Before House Enrolled Act 1250 introduced “reliability adequacy metrics,” public utilities assembled their portfolios themselves.

Rep. Matt Pierce, D-Bloomington, who on Wednesday ran through a lengthy and largely unsuccessful list of proposed changes, suggested deleting the recommendation. Pierce said he was concerned that the measure, which would require utilities to own more, “could potentially force us to have to keep more expensive, polluting legacy generation on the grid longer than maybe we should.”

Soliday noted that capacity prices had shot up. Indiana, then, would step in to ensure utilities minimized purchases.

“The fear is that if we don’t find the right balance, we’re going to pay whatever price,” Soliday said, adding that Illinois demand is driving prices skyward. He hinted the task force would recommend cutting the threshold in a separate committee meeting earlier this month.

The task force also recommended legislation to help utilities meet peak energy demand as “the modern economy becomes increasingly electrified.” That could come through an expansion of time-varying price structures, where energy costs more at peak times and less at off-peak times, or other pilots.

Notably, one item suggests that lawmakers, the Indiana Office of Energy Development and the Indiana Department of Homeland Security collaborate with industry and local governments safety best practices for new, controversial energy technologies like small modular nuclear reactors, battery storage facilities, and hydrogen infrastructure.

Other recommendations: that regulators “reasonably encourage” new technologies that “enhance” reliability or cut customer costs, that lawmakers consider requiring “similar regulatory treatment” for all energy generation resources and that lawmakers consider authorizing other alternative fuel-boosting pilots.

Customer bills and more

The task force also sought to streamline ratemaking, suggesting that lawmakers have the Indiana Utility Regulatory Commission squash the number of ratemaking cases the commission takes on using multi-year rate plans to “increase regulatory efficiency and reduce regulatory costs.”

Lawmakers were also asked to require that IURC study and implement “innovative ratemaking designs,” while the IURC was asked to evaluate its regulatory processes, perhaps by consolidating some cases.

Also suggested: stakeholders work together on public awareness and participation in customer assistance programs.

The task force also recommended that lawmakers make it easier to redevelop former electric generating stations or mines, and make it easier to build transmission infrastructure “while preserving local input and appropriate controls.”

The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.

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One thought on “State energy group takes cautious approach in industry transition to renewables

  1. Having worked at AES (they own AES Indiana, and AES Ohio), and having seen the regulatory environment in Ohio, I always wondered how they were going to keep enough generation capacity in state to meet peak demands in an almost completely unregulated energy market, so I do appreciate the recommendations to maintain the generating base.

    But, I think that these recommendations are all aimed at potecting Indiana Utilities bottom lines, while doing nothing to encourage small scale (residential and commercial roof top) solar and battery. I think the key to encouraging widespread adoption of renewables is getting the IURC to recocognize that people other than Untilitys and thier lobbyists are stakeholders.

    Who cares if my electric is 25% cheaper if I am having to run my AC 100% more because of creeping climate change.