Indiana Renewable Electricity Standard (HB 1379)

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A Renewable Electricity Standard (RES) would increase the generation and sales of renewable energy in Indiana to 2% of the total electricity supply by 2008 and 10% by 2016.

More renewable energy will produce thousands of jobs, spur economic growth, improve environmental quality, reduce energy price volatility and increase national security.

Twenty-two other states, including Texas, Pennsylvania, Minnesota, Wisconsin and Iowa have adopted various RES mechanisms. Five states have added renewable energy standards in the last two years alone, with New York topping the list with a target of 25% renewable energy by 2013, while several other states increased or accelerated their standards. Indiana now has a similar opportunity to bring renewable energy industry dollars and “iron in the ground” to the state.

Public opinion polls show that the vast majority of Indiana voters want more clean energy generation. Renewable energy, and the idea of an RES for Indiana, is strongly supported by distinguished leaders such as Senator Dick Lugar and Representative Pete Visclosky.

Elements of the Renewable Electricity Standard

  • By 2008, electricity produced from renewable energy will constitute at least 2% of all electric utilities’ sales to Indiana consumers, rising to 10% by 2016.
  • Qualifying renewable energy resources will include wind, biomass, solar and other environmentally superior energy sources.
  • The Indiana Utility Regulatory Commission will implement the standard.
  • The 1% annual increase in energy supply from renewables enables utilities to step up their procurement of renewable energy sources in a very predictable and manageable way.

Jobs and Economic Benefits

  • Provides a new income stream for farmers who lease sites or own wind turbines, or grow biomass “energy crops,” while producing significant new property and sales tax revenues.
    • In many rural counties, wind energy farms could be the largest property taxpayers in their county; Texas wind farms, for example, annually generate more than $13 million for schools and rural counties. In Indiana, farmers and other landowners are expected to receive annual lease payments of between $5,000 and $9,000 per wind turbine.
  • Creates thousands of new manufacturing and service sector jobs and economic benefits.
    • “Job Jolt,” a study by the Regional Economics Applications Laboratory, concludes that renewable energy development alone can create 6,500 jobs by 2020, and can spur Indiana economic growth of $300 million by 2010 and $600 million by 2020.
    • Renewable energy sources such as wind power have the potential to particularly raise the incomes of counties that have had historically lower-than-average per capita incomes, such as Benton County.
  • Resources such as wind have zero fuel costs, and so hedge against volatile energy prices.

Frequently Asked Questions About Renewable Energy Development

Q: Will the Renewable Electric Standard substantially increase electricity rates?

A:Unlikely, because:

  1. Wind technology is cost-competitive with conventional forms of electric generation on a kilowatt-hour basis.
  2. The Indiana Utility Regulatory Commission has the power to set rates.

Q: What happens when the wind doesn’t blow?

A: Other power generation will fill the gap. Under the proposed standard for Indiana, renewable energy will only be a very small percentage of the state’s power supply: 2% by 2008. Coal and natural gas plants will continue to provide the majority of the state’s total power supply.

Sophisticated weather forecasts now enable the electric grid operators to accurately plan and schedule wind energy deliveries to match demand. If the wind unexpectedly stops blowing, the grid operator can easily call on other power generation to fill the gap, just as the operator would respond to shutdowns at coal and nuclear plants by adding generation from other sources.

Q: Will large new wind power plants require expensive statewide transmission upgrades?

A: No. An extensive electric transmission system already crisscrosses Indiana with high voltage lines. There is not a compelling need for new high-voltage transmission lines for renewable energy resources that would only be 10% of the power supply in Indiana by 2016.

Q: Does the variable nature of wind power add significant costs to the electric grid?

A: No. Integrating wind power onto the electric grid has proven to be relatively trouble-free and low-cost. For example, for years Pacific Gas & Electric Company has operated an integrated electric system in California with wind representing up to 10% of total generation without any increase in grid system costs. Grid operators must contend with the unique characteristics of all types of generation. Indeed, electricity from wind power already powers over 2.1 million homes in 35 states across the country.

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