Amended Indiana coal proposal better suited to investor-owned utilities
A controversial Indiana bill that investor-owned utilities denounced for potentially increasing ratepayers’ power costs and extending the life of coal-powered electricity, on Thursday passed a state Senate committee with significant changes they find more favorable.
House Bill 1414, authored by Republican state Rep. Edmond Soliday, chairman of the state’s energy task force, on Feb. 27 garnered passage by the Indiana Senate Utilities Committee, 8-2, thanks to an amendment authored by GOP state Sen. Jim Merritt, chairman of the Utilities Committee.
“The way the bill came into my committee, I could not support it,” Merritt told reporters after the Senate vote.
Among the changes to HB 1414 made by Merritt’s amendment is one to hasten the expiration of the date of the bill from May 2021 to Dec. 31, 2020, for utilities to phase out coal-based power generation.
The original date in HB 1414 prompted critics to cite it as a “coal bailout” bill that would have delayed plant retirements, which already are being driven by the increased use of alternative energy sources.
For instance, according to Advanced Energy Economy, the state’s coal plants are expected to close as they become uncompetitive with more cost-effective advanced energy resources, including wind, solar, storage, and demand-side resources.
In fact, coal mines in Indiana already are closing down quickly, according to several groups, with the state having 26 active coal-burning power units in 2010 compared to just 13 in 2016.
That reality ultimately forced coal companies to start pressuring the Indiana legislature to authorize a bill that would make it harder for utilities to transition to cleaner energy resources. And when Soliday sponsored HB 1414, he said the bill was necessary to make Indiana “more thoughtful” about how the closing of its coal-fired power plants were impacting the state.
In turn, numerous groups came out in opposition to HB 1414, including Indiana’s five investor-owned utilities through the Indiana Energy Association, as well as Advanced Energy Economy, the Indiana Conservative Alliance for Energy, the Indiana State Conference of the NAACP, and the Sierra Club, among others.
“HB 1414 is a bad deal for Indiana businesses and consumers,” said Caryl Auslander, policy director at Advanced Energy Economy. “It interferes with free-market competition and it will cost Hoosiers more for electricity.”
But now that HB 1414 is on the Senate side of the Indiana General Assembly, the committee’s amended version seems to have swayed some of the former critics.
For example, one change Merritt’s amendment made to HB 1414 partially removed the state utility regulatory commission from the process by inserting language that would require a proposed coal plant retirement to align with a utility’s integrated resource planning processes, which are considered well-established because they involve extensive modeling and include numerous public hearings.
That’s a big win for the Indiana investor-owned utilities, whose representative group, the Indiana Energy Association, has advocated for a policy that respects their integrated resource planning processes, as well as their business acumen.
Nancy Moldenhauer, a commissioner at the Michigan City Sustainability Commission, agrees with the investor-owned utilities.
“Making utilities unnecessarily go before the Indiana Utility Regulatory Commission to seek permission to shutdown a plant compromises our health and well-being,” Moldenhauer wrote in a letter to the editor published Feb. 23 by the Northwest Indiana Times.
The amendment also removed language from HB 1414 that would have increased consumer costs by allowing utilities to continue operating their coal plants to increase their stored coal reserves, and deleted language that would have permitted utilities to voluntarily double their stored coal amounts.
Both provisions were considered by critics of the bill to be big-time benefits for the coal industry at a hefty price to consumers.
HB 1414 on Feb 3 received Indiana House approval, 52-41, and the next day was referred to the State Senate, which gave it a first reading on Feb. 17 before referring it for consideration to the Utilities Committee.
Now that the Utilities Committee has amended and approved its version, the bill heads to the Senate floor for a second reading on Monday, with the final reading slated for Tuesday. There’s some expectation that more changes to the bill could be forthcoming.
