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Hoosier Environmental Council’s KHARBANDA: The case for a diverse energy policy in Indiana not SB 251 April 24, 2011

Posted by Laura Arnold in 2011 Indiana General Assembly, Uncategorized, Voluntary Clean Energy Portfolio Standard Program.
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Editor’s Note: This article was written by a spokesperson for a statewide environmental group. It provides yet another perspective on the flaws in SB 251. This article was prepared for the Indianapolis Business Journal (IBJ) before the bill was amended on second reading in the House and before the Voluntary Clean Energy Portfolio Standard language was added to HB 1128. Hopefully, these various perspectives posted to the blog will help readers to decide for themselves whether SB 251 and HB 1128 should become law in the State of Indiana. Laura Ann Arnold
by Jesse Kharbanda

April 16, 2011
Key utility executives and state legislators argue that Indiana’s power should come predominantly from coal and nuclear power.


Indiana’s electricity sector is at a crossroads. On average, power plants are more than three decades old, with their economics needing reassessment in light of new—and long-delayed—federal environmental rules.

What path will we pursue to power Indiana in the coming decades? Key utility executives and state legislators argue that Indiana’s power should come predominantly from coal and nuclear power. Those legislators made good on that conviction by passing, in recent years, taxpayer- and ratepayer-funded coal incentives considered “the most aggressive” in the United States, and have pushed to advance ratepayer-funded incentives to expand nuclear power, as proposed in the intensely debated Senate Bill 251.

The question is whether this monolithic approach is really in the best long-term economic interest of our state. While coal power will continue to dominate Indiana’s electricity mix, a decidedly more diverse generation mix would maintain reliability and be more affordable and better for economic development.

Natural gas is a logical part of this more diverse vision: According to the Energy Information Administration, the levelized cost of new gas is 40-percent lower than new coal and new nuclear, and its project time line is much shorter. Gas becomes more economically compelling in a world of carbon controls and, in the wake of the Japan tragedy, more robust—and expensive—nuclear reactors and operations.

But the broader opportunity for a more diverse electric-generation vision is in the commercial and small-scale renewable energy sector. Renewables get characterized by skeptics as limited, costly and unreliable. But this description is largely outdated.

Renewable resource potential, driven by technology, has exploded: Indiana’s commercially viable proposed wind projects alone could provide more than five times the power of what those currently installed generate, enough to make up 10 percent of our electricity. And the price of commercial wind has gone down to such a degree that it is 40 percent of the cost of new coal/nuclear on a per-megawatt-hour basis—and cheaper even without federal support.

Commercial wind’s economics have proven to reduce wholesale power prices in parts of the Midwest. And renewable energy resources do not impede reliability, safely contributing to more than 10 percent of the electricity of Iowa, Minnesota and the Dakotas, while being backed by existing generation.

Accelerated renewable-energy development creates an additional dividend: By concentrating construction, robust renewable-energy development will draw in component manufacturers who historically co-locate near such construction, as seen in Iowa and Minnesota. This co-location effect is forecasted to be larger in Indiana than other states due to our impressive automobile-component-manufacturing base, which has strong crossover with renewable-energy-component manufacturing.

Some will pose that, if renewable energy is so attractive, compared to new coal and nuclear, our state should naturally continue to see ample growth of the former. But Indiana’s five main utilities, monopolies by law, have no incentive to invite in renewable-savvy independent power producers, as these utilities reap a rate of return only on their own generation. Indiana, as a result, largely forgoes having a flood of IPPs continually competing to fulfill supply needs and driving down electricity rates.

SB 251 adds another layer of challenge to future competition, as it would expedite—and perhaps streamline—the approval process for recouping retrofitting expenditures for our existing power fleet. While offering a substantial new carrot to existing, coal-dominated generation, SB 251 offers no meaningful incentives to renewable energy. The bill’s voluntary clean-energy portfolio program could likely be met entirely, as of this writing, by energy-efficiency investments already prescribed by the Indiana Utility Regulatory Commission.

We look forward to working with those who would seriously consider the added value of a more diverse energy policy than what current legislation would likely lead to. At stake are Indiana’s long-term cost competitiveness and economic growth.•


Kharbanda is executive director of the Hoosier Environmental Council


CAC: Legislature Votes to Raise Taxes through Utility Bills; House adds eminent domain to bill April 24, 2011

Posted by Laura Arnold in 2011 Indiana General Assembly, Voluntary Clean Energy Portfolio Standard Program.
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Editor’s Note: Here is another news release  from the consumer perspective on SB 251 and HB 1128 creating a Voluntary Clean Energy Portfolio Standard. This news release is in stark contrast to the news release from the American Wind Energy Association (AWEA). These divergent perspectives are posted here to give readers a flavor for the controversy surrounding this proposed legislation. State legislators have until April 29th to resolve differences in proposed legislation before they adjourn. Laura Ann Arnold

Citizens Action Coalition
For Immediate Release :  April 22, 2011                                                                

Contact: Grant Smith    (317) 442-8802 or Kerwin Olson  (317) 702-0461            
Once again, utility ratepayers, aka taxpayers, remain invisible to 104 of the 150 elected officials in the Indiana General Assembly.  On Thursday, both Chambers of the General Assembly voted to raise the utility bills of Hoosiers.   Two companion bills being sold to the public under the guise of “clean” energy, SB 251 & HB 1128, were both voted out of their respective chambers in overwhelming fashion. 
Kerwin Olson, Program Director at Citizens Action Coalition, said: “It is simply unconscionable to CAC that at a time when vital human services for vulnerable populations are being cut dramatically, 104 elected officials would raise taxes on hard working and struggling Hoosiers.  Let’s not forget, the utility bills of school corporations, municipalities, and other governmental entities are paid by tax dollars.  Rate increases are tax increases in disguise. ”
“These investor owned utilities are State franchised monopolies sheltered from risk and market forces,” stated Grant Smith, Executive Director at CAC.  “These monopolies earned over $3B last year in combined earnings.  To reward these corporations with extra profit for doing absolutely nothing is completely disgusting.  It is evident that the public doesn’t stand a chance at the Indiana Statehouse as the influence peddling of special interests lobbyists is clearly running our State.”
The intent of SB251 and HB1128 is as follows:
1)            To deregulate the revenues of utilities overtime by mandating State regulators rubber stamp their requests for rate increases.
2)            To allow utilities to avoid going in for rate cases.  Avoiding rate cases enables overearnings of utilities and conceals their books from public scrutiny.
3)            To shift all risk to captive ratepayers by mandating they pay for construction of new power plants before they generate electricity and even if they never produce a single kWh of energy.
4)            To create a “voluntary” clean energy standard which is nothing but a fraud and window dressing to grant the monopoly utilities extra profit for doing what they are already doing or planning to do.
Adding insult to injury, the House of Representatives added eminent domain for a private corporation, Denbury Resources, to SB251.  “Not only did the monopoly utilities get an undeserved raise, a Texas pipeline company gets to condemn our property. I doubt this is what the voters of Indiana had in mind when they went to the polls last November,” concluded Mr. Olson.
Click this link for the House roll call: http://www.in.gov/legislative/bills/2011/PDF/Hrollcal/0622.PDF.pdf
Click this link for the Senate roll call: http://www.in.gov/legislative/bills/2011/PDF/Srollcal/0446.PDF.pdf
Grant Smith, Executive Director for Citizens Action Coalition: 1-317-442-8802
Kerwin Olson, Program Director for Citizens Action Coalition: 1-317-702-0461

AWEA applauds bipartisan 62-34 vote on amended SB 251 April 24, 2011

Posted by Laura Arnold in 2011 Indiana General Assembly, Uncategorized, Voluntary Clean Energy Portfolio Standard Program.
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Jeff Anthony 
Editor’s Note: This news release was posted by Jeff Anthony, AWEA Director of Business Development, to the Wind Energy Manufacturers Association (WEMA) Linked-In Group. I am posting this news release in an effort to indicate that everyone is not on the same page about SB 251 (and HB 1128). What we really need is for all the business organizations supporting renewable energy and distributed generation to work together. This is not happening right now. As a result, I believe that some are willing to settle for the crumbs dropped on the floor under the table plus look the other way on some really bad utility policy in these bills.
Tell me what you think? Laura Ann Arnold
AWEA: Indiana House passes Clean Energy Portfolio Standard, spurring Hoosier job creation

Washington, DC (April 22, 2011) – The American Wind Energy Association (AWEA) today expressed support for a bill passed by the Indiana House of Representatives containing the state’s first voluntary Clean Energy Portfolio Standard (CPS). The CPS would set a voluntary goal for 10 percent of Indiana’s electric generation to come from clean energy resources by 2025.

“I applaud the Indiana House, under the leadership of Speaker Brian Bosma and Representative David Frizzell, for their efforts on SB 251,” said AWEA CEO Denise Bode. “This action is about creating affordable, homegrown energy for Indiana. With SB 251, the Indiana House has set in motion the ability to create thousands of wind industry jobs for Hoosiers—life-long careers in manufacturing, construction, operations and maintenance.”

Included in the voluntary CPS of SB 251 is an amendment offered by Representative Frizzell (R-Indianapolis), ensuring that at least half of the energy produced by Indiana utilities participating in the 10% voluntary CPS will be met with clean energy resources from within Indiana. The amendment passed unanimously by a voice vote on Tuesday, April 21.

The House passed the amended bill with a bipartisan vote of 62-34. The amended bill, which originated in the Senate, now moves back to that chamber for a vote. The Indiana General Assembly must complete this year’s legislative session by April 29.

NWI Times GUEST COMMENTARY: SB 251 should alarm Hoosier ratepayers March 27, 2011

Posted by Laura Arnold in 2011 Indiana General Assembly, Indiana Utility Regulatory Commission (IURC).
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By Kerwin Olson | Posted: Sunday, March 27, 2011 12:00 am
Businesses, consumers and local governments, be warned! There is a piece of legislation at the Indiana Statehouse that will cause you to lose sleep at night.
Senate Bill 251, which passed the Senate, is nothing more than a money grab by the Indiana Energy Association and the monopoly utilities they represent. Indeed, this piece of legislation promises to lead to confiscatory utility rates, to the detriment of Indiana’s economy, and will flip the regulatory construct on its head.
Let’s not forget, Indiana’s electric utilities are state-franchised monopolies. They are protected from competition and insulated from risk. In exchange, they agree to government regulation. The primary function of that regulation is to serve as competition in the absence thereof.
SB 251 essentially turns the Indiana Utility Regulatory Commission into a rubber stamp and hands the utilities the proverbial blank check, ultimately stifling competition with the intent of protecting and even enhancing the profits of monopolies.
As a result, the ability of Hoosier small businesses and large industries to remain competitive will be jeopardized as significant increases in the cost of energy will have to be passed through the price of their products and services or, worse yet, through reductions in payroll or even relocation of their business.
In addition, already struggling school corporations and municipalities will be forced to make even deeper cuts to education, essential infrastructure needs and public safety just to ensure these monopolies satisfy their insatiable appetite for ratepayer dollars, regardless of the cost to society.
SB 251 also defies market economics. A free market is defined at its core by having a willing buyer and a willing seller. Ratepayers held captive by design are anything but willing and deserve the protections guaranteed them by law.
The market also teaches us that profit is the reward for risk. SB 251 not only shifts all business risk onto captive ratepayers but also instructs the IURC to reward these monopolies extra profit to carry out their high-risk, excessively expensive business plans. Those assuming the risk should reap the benefit and not get saddled with exorbitant and unjust rate increases to pad the pockets of monopolies.
Let’s hope Speaker Brian Bosma and the House of Representatives recognize SB 251 for what it is and instead work on energy policy and regulatory reform that will invite competition and protect Hoosier households and businesses from the greed of monopolies.
Kerwin Olson is program director of the Citizens Action Coalition. The opinion expressed in this column is the writer’s and not necessarily that of The Times.

AWEA: Indiana poll finds overwhelming bipartisan support for wind energy, as Legislature weighs 10% requirement March 1, 2011

Posted by Laura Arnold in 2011 Indiana General Assembly, Uncategorized.
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Results of an Indiana poll released today show strong and deep bipartisan public support for increasing wind farm development in the state through the passage of legislation calling for 10 percent of electricity sold in Indiana to come from renewable energy by 2020.

The results of the poll, conducted by research firm Public Opinion Strategies, come as the Indiana House and Senate prepare to take up energy legislation, Senate Bill 251, which currently does not create any market for renewable energy. After passing in the Senate, the bill now heads to the House, where it can be amended to establish a renewable energy requirement for which so many Hoosiers are showing strong support.

The poll found that 77 percent of Indiana voters support legislation creating a requirement for 10 percent renewable energy by the year 2020. An impressive 47 percent of voters “strongly” support such legislation, and just 16 percent oppose it. The results signal support among Hoosiers for harnessing the economic-development benefits of wind power and diversifying the state’s energy mix in a way that can save consumers money. A 10 percent renewable energy requirement would spur construction of approximately six new wind farms and create thousands of jobs.

“Indiana voters clearly speak with one voice on this issue,” said Neil Newhouse, Public Opinion Strategies pollster and co-founder. “Nearly 80 percent of voters interviewed say they support legislation requiring 10 percent of the electricity sold in the state to come from renewable energy such as wind and solar.

“Support is not only deep (47 percent strongly support such legislation), but also broad, as voters across party lines support the proposal by at least a three-to-one margin. Clearly this is a win-win issue for lawmakers on both sides of the political aisle.”

The poll reflects recent national polls showing that as much as 89 percent of Americans want more renewable energy.

Key findings of the Indiana poll include: 

  •  77 percent of Indiana voters support legislation requiring that 10 percent of electricity sold in the state come from renewable energy by 2020. Fully 47 percent of voters “strongly” support such legislation, while just 16 percent oppose it (9 percent strongly opposing it). 
  • A strong 66 percent of Republicans statewide support a 10-percent renewable energy requirement.
  • Overall support for this legislation was above 70 percent in all regions of Indiana and between 77 percent and 79 percent in urban, suburban, and rural areas of the state.
  • Statewide voter support rose to 84 percent when told that a 10 percent requirement would spur construction on six new wind farms in the next two years, creating thousands of new jobs.
  • Support for legislation rose to 85 percent when voters were told that Indiana’s neighbors have secured long-term electricity contracts from wind power that costs significantly less than the average per kilowatt-hour price Hoosiers currently pay. 
  • Voter support for legislation rose to 83 percent when voters were informed that more than half of the wind energy generated in the state is currently used to deliver power to neighboring states with renewable energy requirements.“The voice of Indiana and the voice of America are one,” said Denise Bode, CEO of the American Wind Energy Association. “Hoosiers clearly want to embrace the economic-development engine that is wind power, and the industry stands ready to do its part here in America’s heartland.

    “Twenty-nine other states already require their utilities to provide renewable energy. Our job now is to make sure that Indiana’s leaders take to heart the overwhelming support for a 10 percent renewable energy requirement as demonstrated in this poll. We appreciate Indiana voters’ support, and we will work with a bipartisan group of policymakers to provide the clean, affordable and homegrown energy they want.”

Public Opinion Strategies conducted the poll by contacting 600 registered voters in Indiana by telephone on February 16-17. The margin of error of the poll is plus or minus 4.0 percent in 95 out of 100 cases. The partisan composition of the sample was 36 percent Republicans, 28 percent Democrats and 34 percent “Lean/Independent.”

Sens. Gard, Hershman and Merritt: This bill –SB 251–offers the right energy policy for state March 1, 2011

Posted by Laura Arnold in 2011 Indiana General Assembly.
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Editor’s Note: I strongly urge that you click the link below to read and study SB 251 and determine for yourself  if  “this bill offers the right energy policy for [the] state” of Indiana. Without getting into all the details, I would merely like to offer this observation from data collected and reported by the Database of State Incentives for Renewables & Efficiency (DSIRE).

DSIRE’ s Quantitative RPS Data Project provides quantitative information about state renewables portfolio standards (RPS). In the RPS Data Spreadsheet, state requirements are defined by year and by resource class and include other key data elements such as monetary penalties or alternative compliance payments, eligibility of new and/or existing facilities, the percentage of the state’s electric load covered by the policy, comments to clarify data entries or assumptions, and an update memo to describe recent changes to the data.

Let’s set aside the issue of a mandatory vs. a voluntary goal for the state of Indiana. SB 251 establishes an anemic goal for so-called clean energy technologies which includes both clean coal and nuclear power. This data provides information on the Voluntary RPS Goals adopted by various states:

North Dakota: 10% by 2015

Oklahoma: 15% by 2015

South Dakota: 10% by 2015

Utah: 20% by 2015

Vermont: 20% by 2015

Virginia: 15% of base year (2007) sales by 2025

West Virginia: 25% by 2025

Now compare this to the voluntary goal established for Indiana’s electric utilities in SB 251 of 10% by 2025.

This blog will report on additional analysis of SB 251 in the coming weeks.

What do you think?

Laura Ann Arnold


Among his many bold visions for Indiana, Gov. Mitch Daniels advocates a first-ever comprehensive energy policy for Hoosiers. Daniels’ objectives — clean, safe, reliable and affordable energy sources making our state more self-sufficient and economically competitive — are worthy of legislators’ time and talent. The Indiana General Assembly can help achieve these goals for consumers by supporting Senate Bill 251.

Producing and distributing energy are increasingly linked to environmental considerations. Energy costs are growing concerns for business investors and employers. Decisions we make as a state will greatly impact Indiana’s competitiveness to retain and attract jobs. So, these same decisions will impact the quality of life and cost of living for generations of Hoosiers.

Fortunately for us, 36 other states currently have more expensive utility rates than Indiana. In fact, energy here is more affordable for homeowners and employers than in Michigan, Illinois and Ohio with which we compete for jobs and skilled workers every day.

So the looming questions become how we continue to promote job growth, protect our environment and remain a lower-cost energy state.

As lawmakers, we are approached from all sides of the energy debate. Be assured, there is no shortage of opinions. Some say Indiana should abandon coal — even clean coal — as a principal fuel source and resort almost exclusively to renewable sources such as wind, solar and hydro. Others tell us renewables are unreliable, too costly and inappropriate for large commercial consumers. Still others suggest the best answer is to promote the development of safe nuclear power. They are convinced it’s clean, dependable and, while expensive to build, remains the most cost-effective power source for the future.

We’ve listened to these disparate opinions and have concluded that a good public policy lies somewhere in the center and not at the polar extremes. That’s why we’re offering SB 251.

Our legislation encourages major investments to improve the environmental quality of generating facilities in Indiana — as opposed to taking those investments and jobs to other states. The bill rightly contains pay-as-you-go provisions to attract investment, create jobs and safeguard the environment by avoiding cost cutting on safety measures.

SB 251 recognizes and references the important roles of clean energy resources. Our bill encourages utilities to ramp up on renewable energy yet it avoids imposing government mandates like high-energy-cost states have unwisely done. Rather than dictating a one-size-fits-all solution, utilities can select from a menu of options to develop the best strategy for their customers, geographic area and investors.

No one special interest group or lobbyist is entirely happy with our bill and the policies it reflects. But that’s OK. Sometimes that’s the best signal that we, as citizen legislators, have achieved a balance among competing interests. After all, our goal is to enact long-term energy strategies that best serve the interests of Hoosiers.

Gard, R-Greenfield, is chair of the Indiana Senate Committee on Energy and Environmental Affairs. Hershman, R-Lafayette, is majority whip and chair of the Committee on Tax and Fiscal Policy. Merritt, R-Indianapolis, is Senate Majority Caucus chair and chair of the Committee on Utilities and Technology.

Chicago Tribune: Ind. activists oppose nuclear incentive bill; IDEA says bill contains little for the state’s renewable sectors February 20, 2011

Posted by Laura Arnold in 2011 Indiana General Assembly, Uncategorized.
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Associated Press

8:10 AM CST, February 20, 2011


A bill that would offer Indiana’s utilities incentives to build the state’s first nuclear power plants is advancing in the Statehouse despite strong opposition from environmentalists, renewable energy boosters and industries that consume large amounts of electricity.

Supporters argue that the wide-ranging bill is needed to help the state meet its future energy needs, while opponents contend it would simply give utilities subsidies to design and construct multibillion dollar nuclear power plants without compelling them to control the costs of such big projects.

Opponents who include consumer and senior citizen groups also warn that the bill spurns Indiana’s fledgling industry that’s starting to tap into the state’s wind power and other renewable energy sources.

The bill, which is scheduled for a vote Monday in the Republican-ruled Indiana Senate, would move to the GOP-controlled House for consideration if it passes.

One of the bill’s authors, Sen. Beverly Gard, R-Greenfield, said it’s needed to ensure that Indiana has enough power for its future needs.

“You want power. It’s not going to fall out of the sky for free,” she said Feb. 10 before the bill cleared the Senate’s Utilities and Technology Committee.

Many of the bill’s opponents warn that it would end up boosting the cost of electricity by shifting the risk of building power plants from utility companies to customers.

State Sen. Jean Breaux, D-Indianapolis, warns that the legislation “is being pushed under the guise of clean energy, but it’s neither consumer friendly or environment friendly.”

The bill contains three main elements, the first of which would allow utilities to quickly recoup their costs associated with complying with federal regulations.

A second provision would allow utilities to quickly recover the costs of designing, licensing and permitting nuclear power plants. Lawmakers have approved similar cost-recovery options in recent years for so-called clean-coal projects.

Indiana currently has no nuclear power plants. The state’s first planned nuclear power plant, southern Indiana’s Marble Hill power plant, was canceled in 1984 following billion-dollar cost overruns and safety concerns.

The bill also would replace a renewable electricity standard — the idea of requiring the state to get a set amount of its power from renewable sources — with a voluntary goal that would include “clean-coal,” nuclear, waste-burning plants and other sources among a broader set of “renewable and low-carbon power” sources that would count toward a state goal.

One of the bill’s sponsors, Sen. James Merritt, R-Indianapolis, said it’s simply aimed at addressing the growing energy needs of the state, which currently gets more than 95 percent of its electricity from coal-fired power plants.

Even as those power needs are growing, Merritt said increased federal regulation of coal-fired power plants is making it nearly impossible to build such plants.

“What we’re trying to do is to provide incentives for Indiana utilities to diversify their power generation,” he said.

Jesse Kharbanda, executive director of the Hoosier Environmental Council, said the bill as written would have a “devastating” effect on Indiana’s renewable-energy sector. He said it could also hurt working class families and small businesses with higher energy costs in part due to “new ratepayer-funded subsidies for nuclear power.”

“Utilities would have little incentive to control or manage costs,” Kharbanda said.

Jack Wickes, an Indianapolis attorney who represents dozens of large industrial consumers of electricity, said the bill is actually “aimed at keeping utilities healthy” and would not encourage them to control project costs.

“The utilities would have no skin in the game really and it’s pretty easy for them to just be seeking reimbursement, as opposed to having some responsibility for bringing projects in at the estimated price,” Wickes said.

He noted that the cost of the $3 billion coal-gasification plant Duke Energy is building in southwestern Indiana is running about 30 percent above its initial construction cost estimate.

Indiana is one of 13 states without some form of a renewable electricity standard, according to the U.S. Department of Energy. Thirty states have mandatory renewable energy requirements, while seven others have goals.

A 2008 study by researchers at Lawrence Berkeley National Laboratory in Berkeley, Calif., found that about 70 percent of renewable investment in the U.S. is directed to states with renewable energy standards.

Indiana has seen big growth in the number of wind farms in the state, but the American Wind Energy Association said the current bill would do nothing to boost that industry.

“A missed opportunity here could cost Indiana thousands of jobs at a time of significantly high state unemployment,” said Brad Lystra, the association’s manager of state campaigns.

Laura Ann Arnold of Indiana Distributed Energy Advocates, a group that promotes renewable energy, said the bill contains little for the state’s renewable sectors at a time when many states have progressive policies.

“Indiana is still behind — we’re really not with the program,” Arnold said.