CAC says–“IPL: Stop investing in the past; Start investing in the future! Tell the IURC to say NO to IPL rate increase!” January 21, 2013Posted by Laura Arnold in Feed-in Tariffs (FiT), Indiana Utility Regulatory Commission (IURC), Indianapolis Power and Light (IPL), IPL Rate REP, Office of Utility Consumer Counselor (OUCC), Uncategorized.
Tags: Citizens Action Coalition (CAC), IPL Environmental Compliance case in Cause No. 44242
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Do you agree that IPL should stop investing in the past and start investing in the future? Should IPL reconsider renewing and extending Rate REP or feed-in tariff which allows customers to invest in renewable energy and distributed generation?
Click this link below for information from Citizens Action Coalition (CAC) concerning the upcoming field hearing for the IPL Environmental Compliance case in Cause No. 44242.
For details on how to participate in the hearing see: http://indianadg.wordpress.com/2013/01/17/voice-your-view-on-ipl-environmental-compliance-case-12413/
Indianapolis Power and Light (IPL) is currently seeking permission from the Indiana Utility Regulatory Commission (IURC) to raise rates in order to install pollution control equipment on their fleet of aging coal-fired power plants. IPL’s almost exclusive reliance on coal (approximately 99% of the electricity generated by IPL is from burning coal) continues to expose ratepayers and shareholders to enormous costs and risks and is contributing to significant public health and environmental problems.
It’s time for IPL to begin to diversify their generation portfolio and move into the 21st century by making meaningful investments in renewable energy and energy efficiency. Investing in renewables and efficiency will reduce ratepayer and shareholder risk, protect our health and the quality of our environment, and put money back into Hoosiers’ pockets by creating jobs and reducing monthly electric bills.
Let us know if you plan to attend the hearing. See you there!!
Midwest Energy News: Indiana coal controversy prompts push for more transparency in utility planning; Impact on IRP Rule? October 14, 2012Posted by Laura Arnold in Duke Energy, Edwardsport IGCC Plant, Indiana Michigan Power Company (I&M), Indiana Utility Regulatory Commission (IURC), Indianapolis Power and Light (IPL), Northern Indiana Public Service Company (NIPSCO), Uncategorized, Vectren.
Tags: Bowden Quinn--conservation organizer for the Hoosier Chapter of the Sierra Club, Certificate of Public Convenience and Necessity (CPCN), Citizens Action Coalition (CAC), Columbus (IN) attorney Mike Mullett, Ed Simcox with the Indiana Energy Association, Hoosier Environmental Council Executive Director Jesse Kharbanda, Indiana Energy Association (IEA), Indiana Integrated Resource Plan (IRP) rulemaking, Indiana Utility Regulatory Commission
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The Edwardsport coal-to-gas plant under construction in Indiana. Cost overruns and other controversy surrounding the project have helped drive efforts to reform Indiana’s utility planning process. (Photo via Duke Energy)
For the first time in 17 years, Indiana’s public utility commission is rewriting the state’s rule governing how utilities develop long-term plans to meet electricity demand.
The new rule could force the state’s five investor-owned utilities to face more public scrutiny in developing their plans, and perhaps move more quickly than they might otherwise toward reducing carbon emissions.
But the utilities are pushing back, saying that since they have the most skin in the game, they should have the most say over their plans.
Public comments have already been taken on the rule, known as the Integrated Resource Planning Rule, and the state’s public utility commission will issue the final rule in a few months.
Under Indiana law, utilities must obtain a permit called a Certificate of Public Convenience and Necessity before beginning construction of a new power plant. To obtain this permit, they must show that the new power plant is needed to meet electricity demand and is the best, most affordable way to do so. They do that via an Integrated Resource Plan, which they have to file with the public utility commission, known as the Indiana Utility Regulatory Commission (IURC).
In the past, the integrated resource plans “have been very black-box procedures,” said Bowden Quinn, conservation organizer for the Hoosier Chapter of the Sierra Club, who has led that group’s effort in pushing for a new rule.
“There was no avenue for participation,” he said. “They just filed them.”
Coal-to-gas plant controversy
IURC began updating the rule in large part because of the perception that they let too much slide on the controversial Edwardsport coal gasification project, which ran significantly over budget and spawned a huge scandal involving cozy relations between Duke Energy and the IURC, said Mike Mullett, an attorney from Columbus, Indiana, who represents the Hoosier Chapter of the Sierra Club, other environmental groups and the consumer advocacy group Citizens Action Coalition before the IURC.
In that case, the commission issued Duke Energy the certificate of public necessity and convenience, but later, Duke asked for almost $1 billion more than the $1.985 billion they’d originally been approved for, spawning legal action and additional IURC hearings.
“This update is in many respects a response to Edwardsport,” Mullett said.
In particular, the commission sought to push utilities to better estimate financial risk and uncertainty on projects like Edwardsport that embrace new technology. The Edwardsport plant is designed to produce coal gas, and it’s one of two coal gasification plants in the United States that are currently under construction.
The proposed IRP rule raises the bar for utilities in several ways, Mullett said.
The first is increased transparency. At least two public meetings would be required any time an investor-owned utility develops an integrated resource plan (IRP), and more if the public expresses a strong interest. And a new provision called a compliance determination allows the commission to force utilities to redo the planning process if those meetings didn’t happen.
Utilities also “have to have a demand forecast that meets certain best practices,” Mullett said. That plan needs to include a variety of scenarios, including energy efficiency programs, Mullett said. And in a significant departure from the old rule, the IURC must determine whether utilities are actually in compliance with the rule, then issue a ruling saying that they are.
Utilities have objections
The state’s utilities have no problem with more transparency, said Ed Simcox, president of the Indiana Energy Association. “For the company to unveil in an IRP process what their long-range plans are is not objectionable,” he said.
But Indiana’s five investor-owned utilities do object to provisions allowing the state’s regulators to verify whether they’re complying with the new rule. In proposed edits of the rule submitted to the utility regulatory commission the trade group representing the state’s five investor-owned utilities, the Indiana Energy Association, struck that provision entirely. The IEA represents Duke Energy, Vectren, Indiana Power & Light, Indiana Michigan Power, and Nipsco.
They also have problems with another part of the rule that requires them to meet with environmental and ratepayer groups as the plan is being developed, rather than being presented with it after the fact. That gives those groups more input and perhaps influence on utilities’ long-term planning decisions, said Jesse Kharbanda, executive director of the Hoosier Environmental Council.
Such input matters, Kharbanda said, because it will allow advocates to “make sure utilities are properly modeling for prospective carbon rules, changes in renewable energy, capacity and operating costs, and things like combined heat and power.”
But the utilities are “very uneasy because it’s not them having unfettered discretion,” Mullett said. The current director of IURC’s electricity division, who reviews the utility filings, is someone who “asks hard questions and cares about the answers,” he explained.It’s possible that hard questions from the IURC about whether the utilities are complying with the rule could delay approval of an IRP, which could delay approval of a power plant a utility wants to build. “That could delay a power plant, which could delay them from getting access to the money machine” that electricity ratepayers provide, Mullett maintained.
Simcox says the utilities are not necessarily opposed to more public input while they’re developing IRPs. But, he said, “the devil’s in the details.”
“To advise the public what companies are doing in terms of long-range planning is not an objection. The fine line is this: The companies are the entities that are responsible for producing and delivering power. The buck stops with them. You can’t have outside parties dictate to them what they’re going to do and how and when they’re going to do it.”
Tags: Chief Deputy Indiana Office of Utility Consumer Counselor Randall Helmen, Citizens Action Coalition (CAC), Citizens Action Coalition attorney Jerry Polk, Duke Energy Edwardsport IGCC Plant, Jim Rogers CEO Duke Energy
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Company tries to explain cost overruns to IURC
Written by John Russell Indianapolis Star, 11:33 PM, Oct. 26, 2011
Duke Energy CEO James Rogers testified before the Indiana Utility Regulatory Commission in Indianapolis on Wednesday about cost overruns at the company’s coal-gasification plant in Edwardsport. / Joe Vitti / The Star
Duke Energy Corp.’s troubled power plant in Edwardsport now ranks as the company’s most expensive project ever built per kilowatt of electricity generated, the utility’s chairman admitted under questioning Wednesday.
The massive plant, originally billed as a producer of low-cost energy, has run into numerous construction problems that have pushed its price tag above $3 billion, from an original estimate of $1.9 billion.
Company officials, including Chairman James Rogers, found themselves on the defensive Wednesday, trying to explain how the costs got so out of hand and who should pay the bill.
It’s an issue the Indiana Utility Regulatory Commission will decide in coming weeks, as it hears from more than a dozen witnesses. The agency will determine whether Duke was prudent in managing the project and should be allowed to bill customers for much of the costs.
So far, the IURC has ruled that customers should pay $2.35 billion of the plant’s cost. Duke wants the commission to increase that to more than $2.7 billion, raising monthly electricity bills for more than 700,000 Indiana households and businesses.
Rogers faced a barrage of questions about the plant’s problems, such as its wildly wrong estimates on the amount of steel, piping and concrete needed to construct the facility, along with labor productivity issues and a costly, unforeseen water-disposal system.
Rogers acknowledged, under questioning by Randall Helmen, chief deputy at the Indiana Office of Utility Consumer Counselor, that the cost of the Edwardsport plant per kilowatt has climbed to $5,593, up from $3,364 when the regulators originally approved the project in 2007. [Emphasis added.]
That figure takes in the capital costs of the plant, not the annual costs of running it once it goes online. Many of Duke’s other plants or units were built at a fraction of the cost per kilowatt generated by those facilities.
“How is this low-cost energy?” Helmen demanded.
Rogers said he has been disappointed by the soaring costs but maintained that the plant, when completed, will produce cleaner electricity for decades to come.
“Yes, it’s expensive,” Rogers said. “But it will be the cleanest plant in Indiana.”
He said the project is 96 percent complete and should be in service a year from now, adding much-needed generating capacity to Indiana households and businesses as Duke begins to retire other, aging plants.
But Helmen hammered Rogers on the costs, much of which Duke wants customers to pay in the form of higher electricity bills.
“Is there any plant in the whole Duke family anywhere near $5,000 a kilowatt?” Helmen asked. [Empasis added.]
“No sir,” Rogers replied.
Among its vast fleet, Duke owns 14 coal plants, three nuclear plants and more than a dozen oil or gas plants.
Despite the grilling, Duke officials did not budge Wednesday from their position that they prudently managed the project and costs, and that the plant will be good for Indiana, using about 1.5 million tons of coal per year, much of it mined in Southern Indiana, to generate about 618 megawatts of electricity at its peak.
The company said the challenges of building such a large plant — the biggest coal-gasification plant in the world — took it by surprise each time there was a setback. But Duke has said it relied on its outside contractors and engineers for expert guidance.
“With the benefit of hindsight, of course, different choices might have been made as the project unfolded, but that does not equal imprudence under the law,” Kelley Karn, a Duke attorney, said in her opening statement.
She added: “The company is not required to make perfect decisions or even optimal decisions. Rather, as long as the decision falls within the range of reasonable choices at the time it is made, it is a prudent decision.”
The commission also will consider, in a separate hearing, whether Duke hid vital information from regulators, committed fraud or grossly mismanaged the project.
Rogers told the commission Wednesday he has worked hard to get the plant finished, despite the problems. He said he urged the major contractors, Bechtel and General Electric, to “stop pointing fingers” and get the job done.
“I said, let’s finish with the least cost possible and then we’ll sort out who owes what,” Rogers said. “My first priority was to finish the project.”
But a group of large industrial customers wants the commission to hold Duke’s feet to the fire over costs. The utility’s position is “it’s someone else’s fault,” said Jack Wickes, a lawyer at Lewis & Kappes, representing the industrial customers.
“Duke’s assumptions were too rosy,” he said.
A group of public-action groups said the project was a novelty that presented special risks in overall planning and management, and Duke failed to manage the risks.
“Many of those risks have come to fruition,” said Jerry Polk, attorney for Citizens Action Coalition of Indiana, one of the public-action groups.
During more than three hours on the witness stand, Rogers repeatedly deferred questions about the project’s engineering setbacks to other executives, who will testify in coming days. He could not describe, for example, where the plant’s main components were located on the property, or the basic layout of the project, even though a huge image of the plant was set on an easel near him.
“I think it’s painfully clear I’m not an engineer, based on my testimony so far today,” he said, eliciting laughter in the room.
Helmen grilled Rogers relentlessly, asking him whether he was familiar with Bechtel’s other projects worldwide, including the Hoover Dam, and about the qualifications of Duke’s early team of engineers.
Rogers said he was familiar with some of Bechtel’s work and said Duke later hired more qualified managers to take over the project.
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IURC Approves NIPSCO Natural Gas Rate Settlement; Gas Rates Reduced November 5, 2010Posted by Laura Arnold in Indiana Utility Regulatory Commission (IURC), Uncategorized.
Tags: Citizens Action Coalition (CAC), Indiana Office of Utility Consumer Counselor (OUCC), NIPSCO
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November 4, 2010
Indianapolis, Ind. — The Indiana Utility Regulatory Commission (IURC) today approved a settlement agreement reached by Northern Indiana Public Service Company (NIPSCO), the Indiana Office of Utility Consumer Counselor (OUCC) and other key customer stakeholders to resolve NIPSCO’s pending natural gas rate case. The settlement – filed on Aug. 24 – was also signed and agreed upon by the NIPSCO Industrial Group, the NIPSCO Marketer Group and Citizens Action Coalition of Indiana.
The settlement slightly decreases overall rates for all NIPSCO natural gas customer classes while providing continued strong support for low-income customer assistance, energy efficiency and conservation programs.
The newly approved gas base rates should be implemented in the November billing cycle and will be reflected in the gas delivery portion of customer bills.
The settlement delivers not only lower rates but also new customer assistance programs to be in place for the current winter heating season.
“We are pleased with the Commission’s decision, which recognizes the efforts taken by all the parties involved to develop a constructive and customer-focused solution that serves the interests of customers and the public at large,” NIPSCO CEO Jimmy Staton said. “This approval provides a solid platform for continued enhancements to customer service, reliability and our ongoing investment in Indiana’s energy infrastructure. Additionally, this outcome upholds our commitment to offering affordable and competitive gas rates in Indiana, which helps attract and expand businesses here in northern Indiana.”
“The agreement approved today will give customers an overall rate decrease while preserving funding for low-income assistance during these difficult economic times,” said Indiana Utility Consumer Counselor David Stippler. “We received a great deal of helpful consumer input in this case and are very pleased with today’s outcome.”
“The issuance of this order provides much needed rate relief and improvements to payment assistance the CAC has supported for some time,” said Citizens Action Coalition of Indiana Executive Director Grant Smith. “It also offers a reasonable solution to reducing seasonal volatility and a process for continuing gas efficiency programs. It shows what can be achieved when ratepayers and utilities work collaboratively.”
Key provisions approved by the IURC include:
- NIPSCO will reduce its overall natural gas rates by $14.8 million, based on a $5 million reduction for residential customers and a $9.8 million reduction for commercial and industrial customers.
- For NIPSCO’s 660,000 residential natural gas customers, the reduction equates to a savings of approximately $7.50 annually per customer. Rates for commercial and industrial classes will also be lower.
- NIPSCO will adjust its rate design for the residential class to reduce seasonal volatility in customer bills and support energy conservation. This change helps separate fixed monthly service costs from variable, usage-driven costs, allowing customers to better track and manage energy usage. This design will result in an increase to the utility’s monthly gas delivery/service charge from $6.36 to $11.00. However, reductions to the base rate’s volumetric charges will offset the change in the flat monthly delivery/service charge, especially during the winter months.
- NIPSCO will revise its low-income customer assistance program to make it similar in design to the Universal Service Program currently in place for Citizens Gas and Vectren Energy Delivery, and at the same funding level it contributes to the current Winter Warmth program. NIPSCO will contribute 25 percent of the program’s costs, which under current usage levels total approximately $1.5 million. The first $500,000 of NIPSCO’s funding will be used to continue a hardship program for non-eligible Low-Income Home Energy Assistance Program customers.
- NIPSCO will continue to offer a variety of natural gas energy efficiency and conservation programs. NIPSCO currently provides $1 million in annual funding for these programs and will provide an additional $1 million in funding for future extensions or enhancements to the programs within 30 days following the issuance of the order approving the settlement.
- The settlement addresses a number of additional natural gas rate related matters, including revision to NIPSCO’s depreciation and amortization expense levels, regulatory treatment of Alternative Regulatory Plan (ARP) revenues and other items.
NIPSCO, with headquarters in Merrillville, Ind., is one of the nine energy distribution companies of NiSource Inc. (NYSE: NI). With more than 712,000 natural gas customers and 457,000 electric customers across the northern third of Indiana, NIPSCO is the largest natural gas distribution company, and the second largest electric distribution company, in the state. NiSource distribution companies serve 3.8 million natural gas and electric customers primarily in seven states. More information about NIPSCO is available at http://www.nipsco.com. NI-F.
The Indiana Office of Utility Consumer Counselor (OUCC) represents Indiana consumer interests before state and federal bodies that regulate utilities. As a state agency, the OUCC’s mission is to represent all Indiana consumers to ensure quality, reliable utility services at the most reasonable prices possible through dedicated advocacy, consumer education, and creative problem solving. To learn more, visit www.IN.gov/OUCC .
Citizens Action Coalition of Indiana is a statewide nonprofit, nonpartisan, member-based organization that was founded in 1974 and represents residential consumers before the Indiana Utility Regulatory Commission and Indiana General Assembly on utility, energy, environmental and health care policy issues. CAC is located at: 603 E. Washington St., Suite 502; Indianapolis, IN 46204; 317-205-3535. (www.citact.org)
Source: Northern Indiana Public Service Company