The 2009 session of the Indiana General Assembly adjourned sine die on Wednesday April 30, 2009. Lawmakers failed to pass HB1001, or the budget bill; therefore Governor Daniels will have to call a special session. The Senate passed the bill 37-13, but minutes later the bill failed in the House, 27-71, with all the Republicans and 24 Democrats voting no. K-12 funding, charter schools, gaming, transit, stimulus dollars, and rainy day funds were among many issues causing the budget vote to fail. (Although I think we all know both parties are posturing for the mid-term election). The legislature did succeed in coming to an agreement to fix the State’s bankrupt unemployment insurance fund. Despite heavy opposition from the Indiana Chamber and the Manufacturers Association, HB1379 passed the Senate 46-3 and the House 52-47, not a single House Republican voted for the bill. The new plan will raise taxes on employers but will not cut benefit payments. Labor made their voice heard on the issue, staging the largest rally in the Statehouse in over a decade on Monday April 28th, filling the Statehouse with thousands of laid-off union workers. Despite claims to the contrary by some lawmakers, the rally proved that the voice of the people does matter and does have an impact.

While much debate was being held on the budget, unemployment, abortion, puppy mills, sugar cream pie, transit, stimulus dollars, and rainy day funds, CAC largely stayed away from these discussions (although I must confess I had more than one slice of the pie) and continued working to protect ratepayers and advocate for a sustainable energy policy focused on renewable energy and energy efficiency. Close to 50 bills and resolutions were introduced dealing with the topics of energy, utilities, coal, net metering, and the associated issues, an unprecedented number for our State. This is an indication that both sides finally recognize the importance of energy on the economy and the environment, and that Indiana can no longer shelter itself from the conversation in Washington and across the globe. Despite this acknowledgment, efforts to pass meaningful energy legislation failed, thanks in large part to partisan politics and the greed and hubris of the utility lobby. The following articles summarize many bills CAC followed, and publicly supported or opposed.

-Kerwin Olson, CAC Program Director

While our legislators did not talk much about tax increases this year, there were several bills at the State House that would have dramatically increased our utility rates. These bills were loaded with trackers, which allow the utilities to avoid rate cases by raising rates when their costs go up, without ever having to lower rates when their costs go down. Trackers allow utilities to bypass most of the regulatory process, effectively implementing "backdoor deregulation." The good news is that we stopped every single one of these bills from passing this year!

However, this year's legislative process is not entirely over. Because our legislators failed to pass the Budget Bill, the Indiana General Assembly will have to go into Special Session this summer. Going into Special Session, we expect that Governor Daniels will continue to drive the agenda that the utilities are pushing. This agenda focuses on building more coal and nuclear power plants rather than moving towards renewables and energy efficiency. Efficiency and renewables will drive utility rates down, improve public health and the quality of our environment, and create more jobs per megawatt than either coal or nuclear.

The following are the synopses of the energy policy bills that passed the 2009 Indiana General Assembly.

Bad Bill - Leucadia Resurrected: Socializing the Risk and Privatizing the Profit

SB 423: Substitute natural gas contracts

Summary: SB 423 permits the Indiana Finance Authority to enter into contracts for the purchase and sale of substitute natural gas (SNG) from coal gasification facilities to regulated energy utilities for delivery to retail end use customers. It also requires the authority to establish the Substitute Natural Gas Account to provide funding for SNG related business.

For the last three years, CAC has been fighting legislation to force the construction of a coal-to-gas plant in Rockport, Indiana. In 2007, legislation was passed that practically gave Leucadia (a multi-national speculative venture corporation) the project and shifted the entire cost of construction and operation (i.e. financial risk) onto the backs of Indiana natural gas ratepayers. In order to garner support for the plant, they made promises to build the plant in Indiana (creating Indiana jobs) and to use Indiana coal. The project is called Indiana Gasification, LLC.

In 2008, when it became clear that Leucadia could not secure land contracts or Indiana coal contracts, the rules were changed again. Legislation passed in 2008 allowed the plant to be built outside of Indiana and not to have to use Indiana coal, but still to receive Indiana tax credits and to still keep Indiana ratepayers on the hook to assume all of the financial risk and liability of the plant.

Despite these obvious attempts to force the construction of the plant, by the end of 2008, all three Indiana natural gas utilities (Citizens Gas, Vectren, and NIPSCO) had withdrawn from negotiations to purchase the gas from Leucadia.

So now we get SB 423. This bill changes the rules of the game again. It requires the state, via the Indiana Finance authority (IFA), to enter into those 30 year contracts for the syngas, forces utilities to deliver it, and forces ratepayers to pay for it. This bill essentially makes the State of Indiana (through the IFA) an unregulated energy utility. The project supporters put a $2.2 billion price tag on the project that gas ratepayers in Indiana would be forced to pay. This bill is the epitome of socializing the risk and privatizing the profits, as ratepayers assume the risk of the plant and then assume all costs, and Leucadia siphons Indiana ratepayer dollars out of Indiana. This bill will dramatically increase natural gas bills, and those customers who have Duke for electricity and Vectren for gas, will be doubly impacted, paying for Edwardsport on their Duke bill and Indiana Gasification, LLC on their Vectren bill.

SB 423 was first heard in the Senate Utilities Committee. Normally, this committee room is packed to the hilt with utility lobbyists and other polluters, but not this hearing. The room was so empty you could have heard a pin drop. Outside of the OUCC, IURC, and developers of the project, I think there were maybe 3 people other than myself present. Can anyone say greased pig? After Sen. Hershman, the project developers, the Coal Council, and the consumer counselor (yes, I did say consumer counselor) testified how great this bill was, CAC voiced the only opposition to the legislation. Despite reminding the committee members that the gas utilities go in every 90 days for cost review of their purchases, and that this bill would not allow any review of cost for 30 years, and that it is unthinkable to expose Indiana natural gas ratepayers to the same risk that Indiana electric ratepayers face due to upcoming carbon regulations, the bill was deemed a great deal for the consumers of Indiana and moved out of committee with unanimous support 10-0. SB 423 met no opposition on the Senate floor and moved unanimously 48-0.

The House hearing was held less than 2 weeks after passage from the Senate. As it turns out, Leucadia, the project developers, needed the legislation by Mid-March to apply for their federal loan guarantees, and our elected officials were quick to comply. The hearing in the House had many more attendees, including Bill Rosenberg the economic guru behind this project. Thanks to Mr. Rosenberg’s excruciatingly long testimony, the hearing was continued until after lunch. CAC was joined by Sierra Club and a few others in voicing opposition to the legislation, but despite our efforts, the lone no vote in committee came from Rep. Dvorak and the bill was moved 10-1. Rep. Pierce did give a spirited explanation of his yea vote, pointing out the hypocrisy of “free market” proponents and how their support of this bill was in contrast to those principals. He also pointed out how disingenuous it is for those same legislators to voice opposition to renewable energy legislation because of their position that it was not the role of government to pick winners and losers, when SB 423 clearly picked a winner. He continued and espoused his frustration over the speed by which any legislation relating to coal is moved through the General Assembly with minimal opposition.

Rep. Pierce gave similar testimony before the full House on 3rd reading and despite SB 423’s status as a greased pig, Rep. Crouch, Rep. Murphy, Rep. Soliday and others felt compelled to speak to the greatness of this legislation and urge their fellow legislators to support the bill. I can only surmise that efforts by CAC and Valley Watch in opposing this legislation and encouraging members to contact their legislators resulted in many phone calls, e-mails, and letters. Rep. Murphy said so much when he mentioned in his testimony that we have all received many e-mails regarding this bill. Nevertheless, the bill was passed 90-8, and signed into law just 8 days later by the Governor.

However it was discovered in the last week of the session that the way the bill was written, it rendered the coal gasification tax credit useless. This credit is necessary to make the plant financially viable and to make the use of Indiana coal an affordable option. The reason the tax credit is useless is that the IFA is not defined as a taxpayer, and the gasification credit is funneled somehow through the sales tax and utility receipts tax. Therefore, a mad dash by the Coal Council to get an amendment inserted into a bill was underway. The first place they put it, thanks to Sen. Hershman, was HB 1447 or the massive 500+ tax matters bill. They also inserted it into the conference committee report of SB 420, again thanks to Sen. Hershman. Unfortunately for the interested parties, HB 1447 was never voted on in the House and died, and SB 420 also died. We fully expect an attempt to move this amendment will be tried in the upcoming special session; CAC will be on guard.

Please thank Rep. Dvorak for his lone no vote in committee, and his no vote on 3rd reading, and holding firm to his commitment to protect Indiana ratepayers and Indiana’s environment. Also contact Gov. Daniels and let him know that his continued support of coal is undermining the economy of Indiana, driving up the cost of energy, and further eroding the quality of Indiana’s environment and the overall health of Hoosiers.

Votes:
Click here to see how the legislators have voted on this bill.

• 2-12-09: SB 423 passed out of the Senate Utilities Committee unanimously, by a vote of 10-0.
• 2-24-09: SB 423 passed out of the Senate unanimously, by a vote of 48-0.
• 3-5-09: SB 423 passed out of the House Utilities Committee by a vote of 10-1.
• 3-16-09: SB 423 passed out of the House (with no amendments) by a vote of 90-8.

Good Bills

HB 1348: Energy conservation codes and standards

Summary: Authored by Rep. Ryan Dvorak (D, South Bend), and joined by co-authors Rep. Pierce and Rep. Bill Ruppel (R, N. Manchester), requires the Fire Prevention and Building Safety Commission to adopt the most recent edition of the (1) International Energy Conservation Code as published by the International Code Council; or (2) American Society of Heating, Refrigerating, or Air-Conditioning Engineers Standard 90.1; for commercial structures before July 1, 2010. The bill originally required the commission to update both the residential codes and the commercial codes, but the language requiring residential codes was removed in the House Environmental Affairs Committee, primarily due to opposition by the Home Builders. After amendment, the bill met no resistance in the House, passing out of committee unanimously 11-0, and on 3rd reading before the full house 91-0.

HB 1348 was sponsored in the House by Sen. Gard, and co-sponsored by Sen. Tallian. The House version would have required the commission to adopt any subsequent versions of the code within 18 months of being updated. That language was removed in the Senate Energy and Environmental Affairs Committee, and the bill passed unanimously 8-0, after amendment. The full Senate then moved the bill by a vote of 47-2. Rep. Dvorak concurred with the Senate language and the bill was adopted by the House unanimously 96-0. However, HB 1348 has since been vetoed by Gov. Daniels.

It is disappointing that residential buildings were removed from the legislation. Just as the utilities refuse to change their behavior and have enormous influence over legislation, the Home Builders are exerting themselves, and thwarting efforts to make Indiana a better, cleaner, and more sustainable place in which to live. Nevertheless, this bill is a very positive step in the right direction, as Indiana has operated on very outdated commercial energy codes for years now, wasting an enormous amount of energy, money, and resources. Buildings consume nearly 50% of our energy, and account for almost a third of our CO2 emissions.

Please call Rep. Dvorak and thank him for his continued and committed leadership to improve Indiana’s environment.

Votes on HB 1348:
Click here to see how the legislators have voted on this bill.

• 2-4-09: HB 1348 passed out of the House Environmental Affairs Committee by a vote of 11-0.
• 2-17-09: HB 1348 passed out of the House by a vote of 91-0.
• 3-23-09: HB 1348 passed out of the Senate Energy and Environmental Affairs Committee by a vote of 8-0.
• 4-2-09: HB 1348 passed out of the Senate by a vote of 47-2.
• 4-27-09: The House concurred with the Senate amendments by a vote of 96-0.
• 5-11-09: Vetoed by Gov. Daniels

HB 1669: Geothermal conversion loans

Summary: HB 1669 establishes the Geothermal Conversion Revolving Fund for the purpose of making loans to school corporations that: (1) install a geothermal heating and cooling system in a new facility; or (2) install a geothermal heating and cooling system that replaces a conventional heating and cooling system. HB 1669 was first heard in the House Commerce, Energy, Technology, and Utilities Committee and was voted out unanimously. However, due to a tight budget and fiscal restraints, the committee did amend it by changing the date of the fiscal impact to the next biennium, avoiding adding it to the 2009 Budget. Despite removing the fiscal, it was still referred to Ways and Means, but was quickly moved unanimously. The bill also received unanimous support on the 3rd reading vote in the House 94-0.

The bill was sponsored in the Senate by Sen. Gard, Sen Errington, and Sen. Karen Tallian (D, Portage). The only no vote on the bill the entire session came during the vote in the Senate Energy and Environmental Affairs Committee by Sen. Gary Dillon (R, Pierceton), who confusingly said he supported it but was voting no. The bill also moved out of Appropriations unanimously, and on 3rd reading before the full Senate,. Rep. Michael dissented on the bill so language offered by Sen. Connie Lawson (R, Danville) regarding energy savings contracts for political subdivisions could be added to the bill. The language extends the length of an energy savings contract from the current 10 or 15 years, to 20 years, allowing more expensive efficiency measures to be included, such as new HVAC systems. The conference report on HB 1669 passed both Chambers unanimously and is now eligible for Gov. Daniels to sign into law.

HB 1669 represents everything the General Assembly should be doing: 1) Job creation – Not only will these systems be installed in Indiana, but one of the largest manufacturers of geothermal pumps in the country is in Ft. Wayne. 2) Protecting taxpayers – Geothermal saves a significant amount of money on utility bills, and thus will save taxpayer dollars, as the pay back period on many geothermal systems is less than 3 years. 3) Climate Change mitigation – By reducing the use of fossil fuels, Indiana is taking a positive step, by reducing CO2 emissions. And 4) Energy independence – We are reducing the need for imported natural gas, and instead moving towards clean, renewable, and homegrown energy.

This bill was the result of very hard work by the DePauw Environmental Policy Project, a collection of faculty and students from DePauw University interested in environmental policy in Indiana. Professor Kelsey Kauffman and her students worked tirelessly at the Statehouse, testifying in committees and talking to legislators in the hallways and in their offices about this bill and other environmental challenges facing our State. One of the early highlights of the session came when this bill was first heard in House committee. The DePauw students were present en masse, and after all the testimony for the bill was concluded, Chairman Moses challenged anyone who wanted to step forward and walk by the all the DePauw kids who worked so hard on this bill for the last 12 months, and tell them why you oppose their bill. Understandably, no one accepted the Chair’s offer. DePauw should be very proud of what of Professor Kauffman and her students accomplished.

Please call Rep. Michael and thank her for her leadership on this issue, and her perseverance in seeing this bill through.

Votes on HB 1669:
Click here to see how the legislators have voted on this bill.

• 1-22-09: HB 1669 passed out of the House Commerce, Energy, Technology and Utilities Committee unanimously, by a vote of 10-0.
• 2-9-09: HB 1669 passed out of the House Ways and Means Committee unanimously, by a vote of 17-0.
• 2-17-09: HB 1669 passed out of the House unanimously, by a vote of 94-0.
• 3-16-09: HB 1669 passed out of the Senate Energy and Environmental Affairs Committee by a vote of 7-1.
• 4-9-09: HB 1669 passed out of the Senate Appropriations Committee unanimously by a vote of 9-0.
• 4-15-09: HB 1669 passed out of the Senate unanimously by a vote of 50-0.
• 4-29-09: After surviving Conference Committee, HB 1669 passed the House unanimously by a vote of 93-0.
• 4-29-09: After surviving Conference Committee, HB 1669 passed the Senate unanimously by a vote of 49-0.

Click here to read the synopsis of the 2009 Indiana General Assembly Bad Energy Policy Bills that died.

Click here to read the synopsis of the 2009 Indiana General Assembly Good Energy Policy Bills that died.

Take Action!

• Tell them to OVERRIDE the Governor's veto of HB 1348!

• Tell your Senator and Representative to SUPPORT a clean renewable electricity standard (RES) for Indiana that does not include coal or nuclear!

• Tell your Senator and Representative to OPPOSE any bills that include trackers for the utilities!

• Make sure to remind them ALL that the taxpayer wallet and the ratepayer wallet are the same wallet and that if they don’t want to raise taxes, they should not consider legislation that will raise utility rates for unnecessary investments on behalf of utility profits!

• Tell them that the best investments for energy in Indiana are in wind, solar, geothermal, and energy efficiency. These are the technologies that will create jobs, and benefit the health, environment, and pocketbooks of ALL Hoosiers!

Senate Committee Chairs:

Sen. James Merritt, Jr. Chair, Senate Utilities and Technology Committee E-mail: s31@in.gov Phone: (317) 232-9533	Sen. Bev Gard Chair, Senate Energy and Environmental Affairs Committee E-mail: s28@in.gov Phone: (317) 232-9493
Sen. Brandt Hershman Chair, Senate Tax and Fiscal Policy Committee E-mail: s7@in.gov Phone: (317) 232-9840	Sen. Luke Kenley Chair, Senate Appropriations Committee E-mail: s20@in.gov Phone: (317) 232-9453

House Committee Chairs:

Rep. Win Moses Chair, House Commerce, Energy, Technology and Utilities Committee E-mail: h81@in.gov Phone: (317) 232-9999	Rep. Ryan Dvorak Chair, House Environmental Affairs Committee E-mail: h8@in.gov Phone: (317) 234-9290
Rep. Bill Crawford Chair, House Ways and Means Committee E-mail: h98@in.gov Phone: (317) 232-9875	Rep. David Niezgodski Chair, House Labor and Employment Committee E-mail: h7@in.gov Phone: (317) 232-9794

Indiana Senate 200 W. Washington Street Indianapolis, IN 46204-2786 (317) 232-9400 (800) 382-9467

Indiana House of Representatives 200 W. Washington Street Indianapolis, IN 46204-2786 (317) 232-9600 (800) 382-9842

For more information about any of these bills, or to look up your legislators, visit www.in.gov/legislative.

Rather than discuss each bill by number, as that would be an incredibly difficult process to recreate in a coherent manner, I think it best to discuss the issues that the utilities and the Governor’s office attempted to pass into law, and surely will be back with in future sessions. Their efforts ultimately failed. For the most part, we have Rep. Moses, Rep. Grubb, and believe it or not, AT&T, (yes, I said AT&T), to thank for stopping this language. For one brief moment in mid-April, our old nemesis, AT&T, became our best friend, more on that later. For the sake of reference, the bills I am combining are as follows: SB 201, SB 420, SB 519, and HB 1305. Two attempts were made to move the language from those bills; first into HB 1360, and then eventually in the 11th hour into the conference committee report on SB 420. So we can hold legislators accountable for their votes, I will briefly describe how those events unfolded and provide the votes on the aforementioned bills. For more information on each of these bills and how the legislators voted, scroll down to the very bottom of this article.

“Renewable” energy legislation

Originally, HB 1360 was Rep. Kreg Battles (D, Vincennes) bill which intended to create an alternative energy fund for the REMCs. After the bill moved out of the House, it was assigned to the Senate Tax and Fiscal Policy committee and became a vehicle for Sen. Hershman to do the bidding of the utilities and insert all of their requested language, explained below, into the bill. The bill moved out of committee by a vote of 10-1. However, when the bill was scheduled for 2nd reading on the Senate floor, 15 amendments were offered, most of which were offered by CAC and AT&T. The amendments muddied the waters so much, that the bill was not called down and essentially died.

SB 420, authored by Sen. Hershman, Sen. Marlin Stutzman (R, Howe) and Sen. Michael Young (R, Indianapolis), included all of the language that will be discussed below. It was first heard in the Senate Utilities Committee. The hearing was held in the Senate Chamber. It passed by a vote of 8-3. On 2nd reading in the Senate, Sen. Hershman offered an amendment to change the name of the bill from Renewable Energy to State Energy Policy, as he confessed the “title Renewable Energy was deceiving.” It was the first honest thing Sen. Hershman said the whole session. I guess there is a first for everything. The amendment was adopted by a voice vote. The bill then moved on 3rd reading by a vote of 42-7. The bill then moved to the House and was sponsored by Rep. Grubb, Rep. Koch, Rep. Battles, and Rep. Randy Borror (R, Ft. Wayne). It was heard in the House Utilities Committee and significantly amended by Chairman Moses. He removed any and all language dealing with nuclear power, and watered down the tracker language. It still however defined coal as a renewable resource, and mandated that ratepayers pay for the utility infrastructure necessary to deliver electricity and natural gas to ethanol and bio-fuel facilities, provisions which CAC strongly opposes. It moved out of committee by a unanimous vote. For some reason, the committee roll call is unavailable on the General Assembly website (although it is posted on ours), but the committee report shows an 11-0 vote. A vote of 93-3 on 3rd reading sent the bill back to the Senate. Sen. Hershman dissented on the House amendments, so a conference committee was formed. The committee was comprised of Sen. Hershman, Sen. Errington, Rep. Moses, and Rep. Koch. Sen. Hershman did not offer a committee report until late Tuesday night, the day before the session was to conclude. The report not only returned the bill to the original language of SB 420, but added even more provisions written by the utilities that had not been vetted in any committee hearing. Needless to say, Rep. Moses would not agree to the committee report, offered his own, which mirrored the House engrossed version of SB 420, which was rejected by Sen. Hershman, killing the legislation.

SB 519, authored by Sen. Phil Boots (R, Crawfordsville), included the language extending CWIP provisions to nuclear power plants. No committee hearing was held on SB 519, but the language did find a home on the Senate versions of HB 1360 and SB 420.

HB 1305, authored by Rep. Grubb, was a renewable energy standard which included coal in the definition of renewable resources and was loaded with tracking provisions for the utilities and the ethanol industry. A hearing was held in the House Utilities Committee but no vote was taken, killing the bill. However, Rep. Grubb did cross chambers and ask for Sen. Hershman’s help in moving his legislation, which is how Rep. Grubb’s language ended up in both HB 1360 and SB 420 in the Senate.

SB 201 was written by Gov., Daniels office. It was authored by Sen. Gard, Sen. Stutzman, and Sen. Merritt and contained the eminent domain language and open-ended tracking provisions for “green” energy development. It was heard in the Senate Utility Committee. The only opposition to the bill was offered by CAC and INDIEC, the advocacy group for industrial ratepayers. SB 201 was voted out of committee unanimously 11-0. It then moved out of the full Senate on 3rd reading 50-0. The bill was sponsored in the House by Rep. Moses, Rep. Murphy, and Rep. Grubb. Rep. Moses elected not to give the bill a hearing, however, the language from the bill found its way into the Senate versions of HB 1360 and SB 420.

Trackers for transmission, distribution, and “green” infrastructure projects

Trackers allow the utilities to bypass most of the regulatory process so that they can raise rates when their costs go up without having to lower rates when their costs go down. This language would have required the IURC to allow the recovery of costs incurred by an energy utility in connection with a green infrastructure project that provides electric, steam, or gas service to or receives electric, steam, or gas service from an alternate energy production facility. It also provided that an energy utility may implement a rate adjustment if the IURC failed to act on an application.

This language was presented under the guise of creating an infrastructure for "green" power. In fact, this language did not give the utilities any authority to do anything that they cannot already do. Consumer protections have been in place for decades to protect consumers from the profit-driven greed of monopoly utility companies. These protections have been under attack by those same utilities for years. This language is another example of the utilities’ attack on those protections, at a time when consumers are most vulnerable. With the state of the economy and unemployment rates going up, the last thing we need right now is to give the utilities a blank check to prey on ratepayers in order to pad the pockets of their shareholders.

Allowing the utilities to pass on costs to ratepayers with no regulatory oversight is unthinkable. That would essentially be deregulation without actually deregulating anything. Also, forcing ratepayers to subsidize the utility infrastructure to ethanol plants is economic suicide. Ethanol plants are going bankrupt across the State right now because it is not a financially viable industry anymore. Asking ratepayers to subsidize new plants, while current plants declare bankruptcy and plants under construction are abandoned is insanity!!!! The ethanol and bio-fuel industry is receiving millions from States and billions from the Feds in taxpayer subsidies, to add ratepayer subsidies to that dying industry is unthinkable; as if taxpayers and ratepayers were different people.

Trackers for infrastructure were found in the language of SB 201, SB 300, SB 420, HB 1305, and the Senate version of HB 1360. Rep. Grubb's language, in SB 420 and HB 1360, allowed recovery of up to $50 million of ratepayer dollars for every ethanol or bio-diesel plant, and up to $150 million of ratepayer dollars, per utility, per year!! The tracker language in SB 201 did not cap the amount utilities could recover and eliminated regulatory oversight!!!

Utilities have been trying for years to get trackers for transmission and distribution. Let’s keep in mind that utilities are charged by law to provide reliable electric service to the public. In exchange for this legal contract, the utilities receive a monopoly service territory, a captive ratebase, and a guaranteed rate of return. Moving and distributing electricity is part of the normal cost of doing business. They should not be allowed to bypass the regulatory process for operating and maintenance costs associated with fulfilling their legal obligation to the public.

This is where our good buddies at AT&T came into the picture. With all the talk of a Smart Grid, or a transmission system that acts as a two way communication system between the utilities and their customers, the electric utilities would be able to participate in offering telecommunications services. This was of course made possible by AT&T and the rest of the telecom cabal pushing to deregulate telecommunication services during the 2006 session. AT&T feels it is unfair for electric utilities to use electric ratepayer dollars to subsidize their participation in the telecom market. Essentially, this would put AT&T and the other telecom providers at a competitive disadvantage as they do not have a captive ratebase to pay for infrastructure, even though they asked for a deregulated market. Therefore, AT&T offered an amendment on the 2nd reading of HB 1360 in the Senate that would have required the electric utilities to refund electric ratepayers any dollars used through the transmission trackers that was then used to provide telecom services. The utilities would have none of this nonsensical talk of refunding ratepayers and effectively ordered Sen. Gard to kill HB 1360. Apparently, this caused quite the ripple in the Senate Republican Caucus about which paymaster to carry water for, the Indiana Energy Association or the Indiana Telecommunications Association. Oh to be a fly on the wall!!

Eminent Domain for new transmission

This language would have allowed a public utility that proposed to take, acquire, condemn, or appropriate land, real estate, or any interest in land or real estate for certain projects related to electric line facilities to obtain from the IURC a certificate of authority. It modified common law to provide that the owner of land against which eminent domain is initiated may object to the public purpose and necessity of the project only if the condemnor has not been issued a certificate of authority. It also limited the recourse of a land owner to challenge only the compensation amount, and not the taking of land if the IURC issued a certificate of authority.

This language essentially granted full authority of routing and siting of transmission to the IURC, removing local jurisdiction. The utilities don’t want to be bothered and delayed by localities and landowners who may object to transmission lines over their schools, or new pipelines burrowing through their farm fields or neighborhoods. Not only do they want to erode ratepayer protections, they are now trying to re-write decades of property law, all in the name of corporate profit and greed.

CWIP for non-carbon or low carbon power plants (a.k.a. nuclear power)

It should be noted that prior to 2002, utilities could not charge ratepayers for building power plants until after those power plants were actually producing electricity (used and useful). In 2002, the Indiana General Assembly passed a bill for CWIP, or construction work in progress. CWIP allows utilities to charge ratepayers for building “clean coal” power plants (defined as power plants that burn Illinois Basin coal with reduced emissions) before those power plants are actually producing electricity. Indiana’s CWIP law goes beyond that to give the utilities an extra 1.5% profit for building more expensive coal-fired power plants.

Non-carbon or low-carbon is industry code for nuclear power. This is an attempt by the utility industry and the Daniels administration to amend the “clean coal” statute to add nuclear generation to the definition so they can CWIP a nuclear reactor. The starting price for building a nuclear reactor is $10 billion, and this bill would allow the utilities to begin recovering this money before the power plant is operational and producing electricity. This language also added trackers for the associated transmission and distribution systems necessary for the new generation, and added trackers for the cost recovery of fees associated with siting, design, licensing, and permitting of the new generation facility even if the new facility is never built or placed in service.

The reason they want power plant CWIP is the same reason they wanted it for “clean coal,” the utilities want to build power plants that Wall Street is reluctant, and in most cases refusing, to finance. This bill will dramatically increase utility rates by incentivizing excessively expensive nuclear power, and would undermine the move toward renewable energy and energy efficiency which create more jobs, save ratepayers money, improve the quality of our environment, and vastly improve public health. Nuclear power also does nothing towards mitigating climate change as nuclear plants take on average ten years to construct, much too slow to have any meaningful impact on climate change. A new reactor would have to be built every two weeks to reduce carbon dioxide emissions 20% by 2050, at a cost of over $1,800 trillion dollars. Obviously, nuclear power is the slowest and costliest way to reduce carbon dioxide emissions, and would further divert resources away from renewables, efficiency, and distributed resources.

Redefining “renewable energy”

The utilities have been relentless in their pursuit to make sure that any renewable energy standard defines coal as a renewable resource. They went a step further this year, attempting to add nuclear to that definition. There were also legislators who attempted to add tire incineration, coal bed methane, coal mine methane, and batteries charged at coal plants as renewable. There was even an attempt to differentiate between “clean” coal and IGCC, and make those definitions separate. This was clearly an attempt by Duke Energy to make sure that their Edwardsport project would count towards any mandate. The definition of IGCC also defined it as either producing electricity or substitute natural gas, which means that the Leucadia developers and supporters, and the potential buyers of their SNG were working hard behind the scenes to make sure that the Rockport project would count towards any mandate as well.

The way this language was written, any standard, other than the one offered in SB 300, could have been met by the utilities without them having to construct a single wind turbine or having to hang a single solar panel. This is just the utilities refusing to change their behavior. The reason the utilities resist investments in renewable energy is because renewable energy is cheaper than coal and nuclear. The more money they spend, the more money they make. Therefore, they choose the more expensive option.

Trackers for “federally mandated costs”

This language was introduced in the conference committee report prepared by the Indiana Energy Association, sorry, I mean Sen. Hershman. This short, but loaded paragraph would have allowed the electric utilities to pass any and all costs related to any federal renewable energy standard, carbon legislation, pollution control requirement, or any other legislation passed by the Federal government related to their dirty energy onto utility ratepayers with little regulatory oversight.

Just as the utilities don’t want to invest a dime of their own money into the R&D of carbon capture or storage, they also don’t want to be held accountable for the pollution and toxins that their business plan has been spewing out for decades now. They don’t want to have any skin in the game and expect their captive ratepayers to pay any and all costs associated with their bad business decisions; decisions I must add that has wreaked horrifying damage on our environment, has been killing people for decades now, is starting to bankrupt our State, and is now melting the planet. The energy utilities must be held accountable for their pollution and greed, and it should be the stockholders of these corporations that bear the costs, not captive ratepayers who had nothing to do with their business plan. Where is the incentive for these polluters to change their behavior when it is the ratepayers being hit with all the pain?

So once again, thanks to the arrogance, hubris, and greed of the investor owned utility companies, the Indiana General Assembly fails to pass an energy policy that focuses on energy efficiency and renewable energy. I hesitate to call it a successful session, but I can’t help but feel somewhat gratified that the investor owned utilities failed to reach any deeper into the pockets of Indiana ratepayers.

Despite that fact, we do owe gratitude to Rep. Dvorak, Rep. Pierce, Rep. Moses, Rep. Grubb, Sen. Breaux and Sen. Errington for protecting the ratepayers of Indiana. We also owe Rep. Battles a debt of gratitude for agreeing to pull out the nuclear energy language from his alternative energy incentives for REMCs (rural cooperatives) bill, which he successfully got through by inserting that language into another bill during the conference committee process.

Be advised, CAC will always be consistent in working to protect ratepayers and in working to pass progressive energy legislation that focuses on renewable energy and energy efficiency. I will leave you with the words of my favorite progressive radio host Thom Hartmann: "Activism begins with you, Democracy begins with you, get out there, and get active! Tag, you're it!"

-Kerwin Olson, CAC Program Director

SB 201: State energy policy (The Utility Tracker Christmas Tree)
Authors: Sen. Gard (R), Sen. Merritt (R), and Sen. Stutzman (R)
Sponsors: Rep. Moses (D), Rep. Murphy (R), and Rep. Grubb (D)
Status: Died in the House Utilities Committee

Votes:
Click here to see how the legislators voted on this bill.

• 2-4-09: SB 201 passed out of the Senate Utilities Committee unanimously, by a vote of 11-0.
• 2-19-09: SB 201 passed out of the Senate unanimously, by a vote of 50-0.

SB 519: Cost recovery for low carbon energy facilities
Author: Sen. Boots (R), Sen. Charbonneau (R), Sen. Kruse (R)
Status: Died in the Senate Utilities Committee

SB 420: Renewable energy (Redefining “renewable energy” & Opening Indiana’s Door to Nuclear Power)
Authors: Sen. Hershman (R), Sen. Stutzman (R), Sen. Young (R), and Sen. Kruse (R)
Sponsors: Rep. Grubb (D), Rep. Borror (R), Rep. Koch (R), and Rep. Battles (D)
Conferees: Sen. Hershman (R), Sen. Errington (D), Rep. Moses (D), and Rep. Koch (R)
Status: Died in Conference Committee

Votes:
Click here to see how the legislators voted on this bill.

• 2-19-09: SB 420 passed out of the Senate Utilities Committee by a vote of 8-3
• 2-24-09: SB 420 passed out of the Senate by a vote of 42-7
• 4-8-09: SB 420 passed out of the House Utilities Committee by a vote of 11-0
• 4-15-09: SB 420 passed out of the House by a vote of 93-3

HB 1305: (Redefining) Renewable energy
Authors: Rep. Grubb (D) and Rep. Koch (R)
Status: Died in the House Utilities Committee

HB 1306: Voluntary renewable portfolio standard program
Author: Rep. Koch (R)
Status: Died in the House Utilities Committee

HB 1360: State Energy Policy
Authors: Rep. Battles (D), Rep. Behning (R), Rep. Pelath (D), and Rep. Wolkins (R)
Sponsors: Sen. Gard (R), Sen. Deig (D), and Sen. Breaux (D)
Status: Died in the Senate

Votes:
Click here to see how the legislators voted on this bill.

• 2-16-09:HB 1360 passed out of the House Ways and Means Committee by a vote of 20-2
• 2-25-09: HB 1360 passed out of the House by a vote of 91-3
• 4-7-09: HB 1360 passed out of the Senate Tax and Fiscal Policy Committee by a vote of 10-1

The good news is that despite the utilities' attempt to hijack Indiana's energy policy, there were also several good bills down at the State House this year that would have moved Indiana a lot closer to the reality of a renewable energy and energy efficient future. Shifting from fossil-fuels to renewables and efficiency is better for our health, better for our environment, and it will create the jobs that we desperately need to jump-start our economy right now.

SB 300: Net metering

Summary: SB 300 expanded Indiana’s net metering rule to allow a customer of an investor owned utility to connect to the grid a renewable energy system with a capacity of 100 kW or less, up from the current law of only 10 kW. Current law also limits the program to residential and K-12 schools only. SB300 would have expanded the program to all customer classes. Net metering is currently an administrative rule of the IURC; SB 300 would have codified net metering and put it into statute. The bill was written by the Indiana Energy Association, or the investor owned utilities.

No opposition was offered to SB 300 in committee and it moved by a unanimous vote of 11-0. It also moved out of the full Senate on 3rd reading unanimously 50-0.

In Committee in the House, Rep. Moses did a strip and insert, putting in the language form Rep. Dvorak’s net metering bill, HB 1347, and Rep. Dvorak’s renewable energy standard, HB 1349, which did not originally get a hearing. Rep. Dvorak had 3 amendments prepared to offer in committee, in addition to the language from HB 1347 and HB 1349, he was prepared to offer Rep. Koch’s renewable energy tax credit language (explained above), but after all the Republicans, including Rep. Koch, voted against the first amendment, which was HB 1347, Rep. Dvorak decided not to offer Rep. Koch’s language. Not only did the bill significantly improve Indiana’s net metering rule, it now included a clean RES, requiring 15% of investor owned utilities electricity to come from renewable energy resources within Indiana, by 2025. The amended version of SB 300 was voted out of committee on a partisan vote of 7-5. SB 300 then was voted off the House floor on 3rd reading by a vote of 62-37. It had unanimous support from the Democrats, and 11 Republicans broke from their caucus and voted yea.

As expected, Sen. Merritt dissented on the House amendments to SB 300. The conference committee was comprised of Sen. Merritt, Sen. Errington, Rep. Moses, and Rep. Jack Lutz (R, Anderson). Rep. Dvorak worked to reach a compromise with Sen. Merritt on net metering language. When it appeared a compromise was reached, Rep. Lutz was replaced on the conference committee with Rep. Dale Grubb, (D, Covington), as Rep. Lutz stated he would not sign the agreed upon conference report. However, Sen. Merritt failed to actually offer a conference committee report, apparently due to pressure behind the scenes from the utilities and Sen. Hershman, and the legislation died.

Please thank Rep. Dvorak for his leadership on sustainable energy. He worked tirelessly, reaching across the aisle in an attempt to pass meaningful energy legislation, but was shut down once again thanks to the influence of the investor owned utilities. Thanks are also owed to Rep. Moses and Sen. Errington for their efforts to see this bill through. Please let Sen. Merritt and Sen. Hershman know that the continued failure of the Indiana General Assembly to pass meaningful sustainable energy legislation is undermining our State’s economy, placing an undue burden on Indiana ratepayers, and continuing to degrade the quality of our environment and public health.

Votes:
Click here to see how the legislators voted on this bill.

• 2-5-09: SB 300 passed out of the Senate Utilities Committee unanimously, by a vote of 11-0.
• 2-16-09: SB 300 passed out of the Senate unanimously, by a vote of 50-0.
• 4-2-09: SB 300 passed out of the House Utilities Committee by a vote of 7-5.
• 4-15-09: SB 300 passed out of the House by a vote of 62-37.

HB 1080: Sales tax exemption for home energy assistance

Summary: HB 1080 would have made the sales tax exemption for low-income home energy assistance permanent. The exemption is set to expire on July 1, 2009. The bill was initially heard in Ways and Means and was moved out by a unanimous vote 24-0. Despite voting for the bill in committee, Rep. Jeff Espich (R, Uniondale) expressed concern over the fiscal impact of the bill and stated he would vote against it, but recommended that none of his fellow Republicans follow his lead. Rep. Murphy then followed Rep. Espich and said, I agree with Rep. Espich that no one should follow his lead, and asked for Republican support of the bill. 31 Republicans voted yea and HB 1080 was moved off the House floor 80-16. In the Senate the bill was then assigned to the Tax and Fiscal Policy Committee chaired by Sen. Brandt Hershman (R, Monticello). Despite the best efforts from low income advocates, Sen. Hershman refused to hear HB 1080, based in large part to the OMB (Office of Management and Budget) coming out in opposition, and the legislation died.

In the 2007 session, HB 1037 went through both chambers with unanimous support, extending the exemption until July 1, 2009. It was widely believed after the 2007 session, based on strong and unanimous bi-partisan support, the exemption would become permanent in 2009. However the Governor neglected to include the exemption in his budget outline, forcing the General Assembly to introduce HB 1080. CAC certainly understands the difficult decisions that need to be made when drafting a budget under the economic realities of today’s economy. However, looking for revenue from the least amongst us is immoral and unconscionable.

Households that receive home energy assistance live at or below 150% of the federal poverty level. The federal poverty level for a family of 4 is currently set at $22,050. These families receive these dollars out of need. Poor families struggle daily to provide food, shelter, clothing, and health care for themselves and family members. This daily struggle to survive is exacerbated in the winter time, as their energy costs significantly increase, trying to keep their family warm. Adding additional expense by taxing these assistance dollars is inhumane and wrong. It should also be noted that LIHEAP dollars come from the Federal Government, or taxpayers. These funds are a result of tax dollars, and there is something fundamentally wrong and unethical about assessing a State tax on Federal tax dollars.

There is still some hope with the budget bill failing that this exemption can be included in the budget during the special session. Please contact Sen. Luke Kenley and Rep. Bill Crawford and urge them to include the sales tax exemption in HB 1001. Also, thank both Rep. Day and Rep. Murphy for their leadership on this issue.

Votes:
Click here to see how the legislators voted on this bill.

• 2-2-09: HB 1080 passed out of the House Ways and Means Committee unanimously, by a vote of 24-0.
• 2-9-09: HB 1080 passed out of the House by a vote of 80-16.

HB 1347: Net metering

Summary: HB 1347 expanded Indiana’s net metering rule to allow any utility customer, including customers of cooperatives and municipals, to connect a renewable energy system with a capacity of 5MW, up from the current law of 10 kW. Current law also limits the program to residential and K-12 schools only. HB 1347 would have expanded the program to all customer classes. In committee, an amendment offered by Rep. Sandra Blanton (D, French Lick) was adopted which exempted the rural cooperatives. The bill was voted out of committee by a party line vote of 6-4.

There were 10 amendments prepared for 2nd reading in the House, 3 of which prevailed on a voice vote. One was a request CAC made to change the language of municipal solid waste to methane recovered from landfills. There was a lot of pressure to reduce the capacity down from 5 MW, so in a bi-partisan display of cooperation, Rep. Dvorak agreed to lower the capacity to 1 MW, and in exchange, Rep. Koch offered his support if his amendment providing tax credits to renewable energy manufacturers and businesses that installed renewable energy systems was inserted. The amended version passed on 3rd reading 68-25.

HB 1347 was assigned to the Senate Utilities and Technology Committee chaired by Sen. Merritt. However, Sen. Merritt did not give the bill a hearing, effectively killing the legislation.

Votes:
Click here to see how the legislators voted on this bill.

• 1-29-09: HB 1347 passed out of the House Utilities Committee by a vote of 6-4.
• 2-17-09: HB 1347 passed out of the House by a vote of 68-25.

HB 1352: The Climate Registry

Summary: Authored by Rep. Dvorak, HB 1352 would have required the state of Indiana to become a member of and participate in the Climate Registry concerning greenhouse gas emissions reporting and reduction. It would have required the Governor or the Governor's designee to sign the Climate Registry's statement of principles and goals to become a member of the Climate Registry and deliver a copy of the signed statement to the Climate Registry before July 1, 2009.

HB 1352 was heard in the House Environmental Affairs committee and met minimal opposition, primarily from the Chamber of Commerce. It was voted out of committee on a party line vote of 6-3. Rep. Tim Brown (R, Crawfordsville) offered an amendment on 2nd reading that established an exception to the registry membership requirement if a petition of opposition is submitted to the Governor by the majority of the local economic development commissions in the state and it allowed the Governor to withdraw the state from the registry if the Governor determined that membership caused a loss of jobs or missed opportunities for jobs. The amendment was adopted by a voice vote. On 3rd reading, it was passed 61-33.

Sen. Gard and Sen. Jean Breaux (D, Indianapolis) sponsored the legislation in the Senate. Sen. Gard held a hearing for the bill on March 9th. The contrast between the hearing in the Senate and the hearing in the House could not have been greater. All the polluters lined up one after the other to express their opposition, the Chamber, the Farm Bureau, the Manufacturers, the utilities, the Petroleum industry, ET all. The hearing took close to 2 hours as the corporate polluters wanted to make sure their paid servants in the Senate were aware of their opposition. A vote was never taken by Sen. Gard, effectively killing the bill. This was the second year in the row the Indiana Senate allowed this legislation to die.

This bill would have ensured Indiana’s place at the table in developing policies related to carbon dioxide air emissions. Given Indiana’s disproportionate contribution to greenhouse gas emissions, Indiana’s participation in the Climate Registry is a key to acknowledging our shortcomings and facing our challenges for the betterment of generations to come. However thanks to the influence of special interests, Indiana continues to stand in the middle of the railroad tracks, waiting to be run over by the freight train known as climate legislation.

Votes:
Click here to see how the legislators voted on this bill.

• 1-28-09: HB 1352 passed out of the House Environmental Affairs Committee by a vote of 6-3.
• 2-12-09: HB 1352 passed out of the House by a vote of 61-33.

HB 1415: Tax deduction for solar powered roof vents and fans

Summary: This bill provides an individual income tax deduction of up to $5,000 for the installation of solar-powered roof vents or fans.

Solar attic fans have proven to save consumers $75-$150 per year on their energy bills. Not only do these fans save consumers money, they also reduce energy by lowering cooling and heating bills and by using the power of the sun to power the systems. These roof vents and fans will help mitigate climate change, by reducing the need to burn dirty, fossil fuels. Indiana is home to one of the largest manufacturers of these fans; therefore this bill will create new, green manufacturing jobs for our State. HB 1415 will help protect our environment, our health, save consumers money, and help to create new, green jobs.

Votes:
Click here to see how the legislators voted on this bill.

• 1-21-09: HB 1415 passed out of the House Small Business and Economic Development Committee unanimously, by a vote of 12-0.
• 1-27-09: HB 1415 passed out of the House by a vote of 89-9.

HB 1620: Energy Efficient Buildings

Summary: Authored by Rep. Matt Pierce (D, Bloomington), and joined by co-authors Rep. Terri Austin (D, Anderson) and Rep. Sheila Klinker (D, Lafayette), HB 1620 would have required certain government buildings be designed and constructed to achieve or exceed the level of energy efficiency required under certain rating systems. The bill moved out of Ways and Means 15-8, and subsequently passed out of the House on 3rd reading 58-39. Sen. Beverly Gard (R, Greenfield) sponsored the bill in the Senate, along with co-sponsors Sen. Sue Errington (D, Muncie), Sen. Vi Simpson (D, Bloomington), and Sen. Greg Taylor (R, Indianapolis). Sen. Gard did give the bill a hearing in committee in the Senate, but failed to take a vote, effectively killing the legislation.

Opposition to this legislation is short sighted and is effectively a mandate on taxpayers to pay more for utilities, and fails to recognize the positive impact that green building design has on worker productivity and worker health. In 2008, Sen. Brandt Hershman (R, Monticello) amended a similar bill to nothing more than a summer study committee. By failing to move this bill for a second year in a row, the Indiana Senate is costing the taxpayers of Indiana millions of dollars in unnecessary utility bills, ignoring the environmental impacts of fossil fuel emissions and pollution, and undermining the economy of our State.

Please call Rep. Pierce and thank him for his continued leadership on this issue. Also contact Sen. Gard and voice your disappointment for her failure to take a vote on HB 1620.

Votes:
Click here to see how the legislators voted on this bill.

• 2-9-09: HB 1620 passed out of the House Ways and Means Committee by a vote of 15-8.
• 2-25-09: HB 1620 passed out of the House by a vote of 58-39.

HB 1622: Advanced renewable energy tariffs

Summary: Authored by Rep. Pierce, HB 1622 would have required the owners and operators of an electric grid to enter into 20 year fixed price contracts with the owners of renewable energy generation systems. It would have obligated the owner of the grid to purchase the customer owned generation at above market rates, prioritize the deployment of that energy to the grid, and make the necessary upgrades to the grid necessary to deploy that energy. Chairman Moses did give the bill a hearing in committee, but did not take a vote.

Feed in tariffs have been enacted in over 40 countries worldwide, most notably in Germany, Spain, and Denmark. A feed in tariff is a true market based approach to the development of renewable energy. They level the playing field and make it financially viable for customer owned generation.

Deployment of renewables, especially solar power, has exploded in the countries that have enacted feed in tariffs. Indiana not only has vast renewable energy resources, but also significant manufacturing capabilities for green technology. Enactment of this bill would provide rapid and sustainable deployment of renewables in Indiana which would in turn cause significant job creation, vastly improve public health and the quality of our environment, help to stabilize the price of electricity, and make Indiana a leader in the renewable energy marketplace.

Please thank Rep. Pierce for his courage to introduce HB1622, and his committed leadership to enact progressive energy legislation in our State.

CAC supported other good bills that are now eligible to be signed into law by the Governor. HB 1097, authored by freshman legislator Rep. John Barnes (D, Indianapolis), requires the state department of health to adopt rules concerning indoor air quality in schools and state agencies. HB 1589, authored by freshman legislator Rep. Mary Ann Sullivan (D, Indianapolis), establishes the State’s first recycling program for electronic waste. Please thank Rep. Barnes and Rep. Sullivan for their leadership on these important issues and their interest in protecting the environment and the health of all Hoosiers.