2011 General Assembly - Bad Energy Policy Bills Passed
The Monopoly Utility Agenda is a high risk gamble for you as a taxpayer and a ratepayer. Rather than bolster our economy and jobs, this plan would bleed our economy, stifle competition, and weaken our job market. The plan cannot be implemented without forcing excessive rate increases and exposing thousands of property owners to potential losses through property damage, devaluation, and condemnation. Under this energy plan, we (taxpayers and ratepayers) carry the risks and costs while monopoly utility companies and New York City bankers walk away with the profits.
The following are the synopses of the energy policy bills that passed the 2011 Indiana General Assembly. Unfortunately, this year they were ALL bad bills.
- 02-10-11: SB 251 passed the Senate Utilities and Technology Committee by a vote of 6-2.
- 02-22-11: SB 251 passed out of the Senate by a vote of 32-17.
- 04-15-11: SB 251 passed the House Utilities and Energy Committee by a vote of 6-3.
- 04-21-11: SB 251 passed out of the House by a vote of 62-34.
- 04-26-11: Senate concurred with House amendments by a vote of 31-19.
- 05-10-11: Signed into law by the Governor
This bill can be described as Super CWIP. CWIP stands for Construction Work in Progress, and it allows utilities to charge us for a power plant while it is under construction - before it is producing electricity, and even if it never does. The utilities already have CWIP for "clean coal" (which is why Duke customers are already paying for the Edwardsport power plant, even though it is not finished), and now they want it for nuclear power plants. SB 251 includes all the language from SB 102 and SB 15 (see below). Here is what the bill does:
- It removes the non-carbon, low-carbon language and calls it what it is, nuclear power;
- Adds capacity expansion, power uprate, and life cycle management to the definition of nuclear generation. Obviously this language is for I&M’s (AEP's) Cook nuclear power plant;
- Creates a voluntary Clean Energy Portfolio Standard gradually increasing to 10% by 2025;
- Defines clean energy as virtually any technology that produces electricity; which includes truly renewable sources like wind and solar, but also includes, but is not limited to, nuclear, coal gasification, solid waste, coal bed methane, and industrial byproducts;
- Excludes the REMCs and municipals;
- Measures compliance in megawatt hours and provide 1 credit for resources generated in Indiana, and 1.25 credits for resources within Indiana; which means it’s really only 8% if all resources are in Indiana;
- Would allow Edwardsport to qualify, as any facility under construction as of January 1, 2011 will qualify;
- Provides an incentive of an additional 0.5% profit above and beyond the utilities authorized rate of return. This of course in addition to the extra 3% profit they could get under CWIP, meaning the Commission could authorize an additional 3.5% profit above and beyond already authorized rate of return;
- A tracker for constructing, operating, and maintaining any facility used to comply;
- A tracker for program costs which are defined as administrative costs, ancillary costs, capacity costs, costs associated with purchasing clean energy credits, capital costs, depreciation costs, tax costs, and financing costs;
- A tracker for lost revenues as a result of implementing DSM programs. What this means is, any sales they lose as a result of efficiency improvements, they can recover those costs from ratepayers. In other words, there will be no financial benefit to consumers for investing in efficiency as the utilities will be able to charge you more for using less; and
- Limits the time for Commission review to 120 days
- Gives eminent domain to private corporations for carbon dioxide pipelines. If this bill passes, it will be the sixth piece of legislation that has been passed to make the Leucadia coal-to-gas plant (Indiana Gasification, LLC) possible. They cannot build this plant without passing legislation to put ratepayers on the hook because Wall Street won't take the risk of financing the plant without a "guaranteed purchaser."
- 01-27-11: HB 1128 passed the House Utilities and Energy Committee by a vote of 9-1.
- 02-07-11: HB 1128 passed the House by a vote of 78-18.
- 04-07-11: HB 1128 passed the Senate Utilities and Technology Committee by a vote of 6-3.
- 04-21-11: HB 1128 passed the Senate by a vote of 40-10.
- 04-29-11: HB 1128 Conference Committee report adopted by the House by a vote of 73-25.
- 04-29-11: HB 1128 Conference Committee report adopted by the Senate by a vote of 49-0.
- 05-13-11: Signed into law by the Governor.
This bill is essentially the same as SB 251, except that it does not give private corporations eminent domain for carbon dioxide pipelines.
SB 71: Coal bed methane and other oil and gas issues.
Authors: Sen. Gard (R), Sen. Steele (R), Sen. Hume (D)
Sponsors: Rep. Eberhart (R), Rep. Battles (D), Rep. Koch (R)
Status: Signed into law by the Governor.
- 01-18-11: SB 71 passed the Senate Energy and Environmental Affairs Committee by a vote of 9-1.
- 02-08-11: SB 71 passed the Senate by a vote of 39-10.
- 04-14-11: SB 71 passed the House Natural Resources Committee by a vote of 11-1.
- 04-21-11: SB 71 passed the House by a vote of 72-24.
- 04-26-11: Senate concurred with House amendments by a vote of 43-7.
- 05-10-11: Signed into law by the Governor.
This bill will essentially open the State of Indiana to hydrofracking (hydraulic fracturing) coal seams for the purpose of extracting coal bed methane, with no requirement that the operators of these wells comply with the Safe Drinking Water Act or even allow the public to comment on the permits or know the location of where these operations will take place. There was an amendment offered by Sen. Gard and adopted by consent which will require disclosure of chemicals used and other information necessary to assess the potential impact on underwater sources of drinking water, but it isn't good enough. It only requires the operators to provide information, not actually do the assessment. It would leave it up to the State, in this case DNR, to decide what to review and also put the burden of doing the assessments on the State agency, not the polluters.
SB 66: Amend definition of "renewable energy resources
Authors: Sen. Gard (R), Sen. Charbonneau (R), Sen. Buck (R), Sen. Tallian (D), Sen. Paul (R)
Sponsors: Rep. Wolkins (R), Rep. Koch (R)
Status: Signed into law by the Governor.
- 01-18-11: SB 66 passed the Senate Energy and Environmental Affairs Committee by a vote of 9-1.
- 01-25-11: SB 66 passed the Senate by a vote of 48-1.
- 04-04-11: SB 66 passed the House Utilities and Energy Committee by a vote of 8-2.
- 04-13-11: SB 66 passed the House by a vote of 72-24.
- 04-26-11: Senate concurred with House amendments by a vote of 47-2.
- 05-10-11: Signed into law by the Governor.
This bill amends the definition of "renewable energy resources" in utilities law to add low temperature, oxygen starved gasification of municipal solid waste. There are several issues with this. First, this bill is a violation of both the Precautionary Principle and the golden rule of conservation before consumption. We should be enacting policies and practices that eliminate waste, not putting a price on it. Once you put a price on a waste stream, you make that waste stream a valuable commodity, thereby incentivizing the waste and ultimately encouraging it.
Secondly, we do not need to burn trash! Enormous untapped potential still exists in conservation, energy efficiency, and truly renewable sources of energy. We should exhaust the potential of both energy efficiency and renewables before entertaining anything else. This will be yet another diversion of funding and Research & Development away from truly sustainable resources.
Lastly, this technology is unproven; in fact, this would be a pilot project. We should not be putting experimental technology into statute. By putting this into the statutory definition of renewables, it will make it eligible for federal grants, again diverting this very limited funding away from truly sustainable resources. It will also more than likely allow the energy generated from these facilities to qualify as renewable energy credits (RECs) on the market. It should be incumbent on those who stand to gain to prove the viability and sustainability of their technology before we codify it as though it is tried and tested.