2010 Indiana General Assembly

 

The 2010 session of The General Assembly was highly political as mid-term elections loom with control of redistricting hanging in the balance. Hoosier communities continue to struggle with unemployment, lost revenues, and the burden of health care and energy costs spiraling out of control. Promises of taxpayer protection emanate from both sides of the aisle, yet once again, the Governor and his friends in the utility and coal industries attempted to throw ratepayers to the wolves; failing to recognize that the taxpayer wallet and the ratepayer wallet are one and the same.

The General Assembly has some decisions to make.

Will they continue to support an unsustainable economic model that supports the profit of the utility and coal industry at the expense of our health and our environment? Or will our elected officials finally proclaim that Indiana is ready to enter the 21st century and begin to lay the foundation of a sustainable economic model focused on protecting our precious natural resources?

Will they continue to support an energy policy that mandates the dirtiest and most expensive options? Or will they support an energy policy that supports the cleaner and cheaper options of energy efficiency and renewable energy?

Will they continue to bleed ratepayers dry and stand idly by while the utilities further erode consumer protections? Or will they choose to protect the ratepayer wallet with the same fervor as the taxpayer wallet?

Legislation was filed that addressed all of those questions, but the end result was a stalemate this year. The good news is that we were able to stop all of the bad legislation from passing. The bad news is that no good legislation passed either. 

 

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These are the good bills that died in the 2013 Indiana General Assembly:

 

SB94: Renewable Energy Development

Authors: Sen. Errington (D), Sen. Kruse (R)

Status: Died in the Senate Utilities & Technology Committee

Digest: Requires an electricity supplier to supply a certain percentage of its total electricity supply from renewable energy resources. Establishes the renewable energy resources fund to receive penalties paid by electricity suppliers that fail to supply electricity from renewable energy resources. Appropriates money in the fund.

Summary: CAC supports this bill. This bill requires electric utilities to supply a percentage of their electricity from renewable energy resources. The bills define renewable resources as 1) dedicated energy crops 2) methane from animal, food, and plant waste 3) landfill methane 4) wind 5) hydro 6) solar – photovoltaic cells and panels 7) fuel cells 8) sawmill waste 9) agricultural crop waste 10) combined heat and power 11) energy efficiency. This bill do not include any mention of coal, coal bed methane, or nuclear. Enacting an RES would put Indiana at the forefront of renewable energy development and attract investment in our state. These bills would also significantly reduce our State’s carbon footprint, improve public health and the quality of our environment, and create the jobs our state desperately needs.

Votes: None taken

 

SB97: Net Metering

Authors: Sen. Errington (D), Sen. Deig (D)
Status: Died in the Senate Utilities & Technology Committee

Digest: Requires the Indiana utility regulatory commission (IURC) to adopt emergency rules amending the IURC's net metering and interconnection rules for electric utilities to: (1) make net metering available to specified customer classes; (2) allow a generating facility with a nameplate capacity of two megawatts or less to interconnect to the distribution facility of an electric utility; and (3) allow a net metering customer to interconnect a generating facility that makes use of specified technologies. Voids existing rules to the extent they do not comply with the requirements for the amended rules. Requires the IURC to report to the regulatory flexibility committee on the IURC's progress in adopting the amended rules.

Summary: CAC supports this bill. Currently, net metering is limited to only 10 kilowatts, and only to residential customers and K-12 schools. This bill would expand eligible customers classes to allow individuals, businesses, commercial industries, and universities to generate their own electricity. The utility would also be required to add a credit to the customer's bill for any surplus power that is generated. This bill encourages renewable energy production, energy independence. and customer owned generation.

Votes: None taken

 

SB194: Food, Farms, and Jobs

Authors: Sen. Errington (D), Sen. R. Young (D), Sen. Becker (R)

Status: Died in the Senate Agriculture and Small Business Committee

Digest: Establishes the local and organic food and farm task force to create a plan to expand and support a local and organic food system.

Summary: CAC supports this bill. For far too long, our policies on agriculture and farming have favored the huge corporate conglomerates who stand to profit at the expense of our environment, our economy, and our health. These huge Agri-Businesses are putting Hoosier family farmers out or work, pouring millions of gallons of toxic chemicals into our waterways and our food chain, and devastating rural communities. We must also reject the notion that toxic chemicals and synthetic fertilizers are necessary to keep the supply of the food chain going. Rather than using these poisons to force the adaption of nature, organic farming recognizes the bio-diversity and conditions surrounding local environments, and acknowledges the inherent relationship we all have with nature. We must begin now to re-invest in local, family farms which provide more jobs, more income, and more sustainable development for our State.

Votes: None taken

 

SB313: Net Metering

Authors: Sen. Merritt (R), Sen. Gard (R), Sen. R. Young (D), Sen. Errington (D), Sen. Stutzman (R), Sen. Breaux (D), Sen. Charbonneau (R)

Sponsors: Rep. Dvorak (D), Rep. Lutz (R), Rep. Koch (R), Rep. Barnes (D)

Status: Died in Conference Committee

Digest: Requires the utility regulatory commission (IURC) to adopt emergency rules amending the IURC’s net metering rules for electric utilities. Provides that the amended rules must: (1) allow a net metering customer to interconnect a facility that generates energy from renewable energy resources: (2) make net metering available to all customer classes: (3) establish a maximum nameplate capacity for all customer classes: (4) require a net metering customer to pay all interconnection costs; (5) establish certain billing requirements; and (6) permit an electric utility to establish in its proposed tariff net metering standards that exceed the standards set forth by the IURC. Provides that the Indiana administrative code to the extent the existing rules do not comply with the requirements for the amended rules. Requires the IURC to report to the regulatory flexibility committee on; (1) the IURC’s progress in adopting the amended rules; and (2) beginning not later than November 1, 2016, the impact of technological advances on the IURC’s net metering rules.

Summary: Currently, net metering is limited to only 10 kilowatts, and only to residential customers and K-12 schools. This bill would expand eligible customers classes to allow individuals, businesses, commercial industries, and universities to interconnect to the grid and generate their own power. SB313 would not set a limit on the size of the system a customer could install, unless you are a residential customer or K-12 schools, in which case you remain captive to the current rule. This bill encourages renewable energy production, energy independence. and customer owned generation.

• 01-21-10: SB313 passed out of the Senate Utilities and Technology Committee, by a vote of 8-3.
• 02-02-10: SB313 passed out of the Senate by a vote of 49-0.
• 02-18-10: SB313 passed out of the House Commerce, Energy, Technology and Utilities Committee by a vote of 12-0.
• 02-25-10: SB313 passed out of the House (with amendments) by a vote of 68-31.

 

SB368: Renewable Energy Standards

Authors: Sen. Lanane (D)

Status: Died in the Senate Utilities & Technology Committee

Digest: Requires an electricity supplier to supply a certain percentage of its total electricity supply from renewable energy resources. Establishes the renewable energy resources fund. Requires an electricity supplier that fails to supply the specified percentage of electricity from renewable energy resources to pay a penalty. Deposits the penalties in the renewable energy resources fund. Requires the Indiana economic development corporation, in consultation with the Indiana utility regulatory commission, to develop a strategy to attract renewable energy manufacturing facilities, including wind turbine component manufacturers, to Indiana. Makes an appropriation.

Summary: CAC supports this bill. This bill requires electric utilities to supply a percentage of their electricity from renewable energy resources. The bill defines renewable resources as 1) dedicated energy crops 2) methane from animal, food, and plant waste 3) landfill methane 4) wind 5) hydro 6) solar – photovoltaic cells and panels 7) fuel cells 8) sawmill waste 9) agricultural crop waste 10) combined heat and power 11) energy efficiency. This bill do not include any mention of coal, coal bed methane, or nuclear. Enacting an RES would put Indiana at the forefront of renewable energy development and attract investment in our state. This bill would also significantly reduce our State’s carbon footprint, improve public health and the quality of our environment, and create the jobs our state desperately needs.

Votes: None taken

 

SB374: Green building demonstration projects

Authors: Sen. Errington (D)

Status: Died in the Senate Energy and Environmental Affairs Committee

Digest: Requires the Indiana office of energy development to establish a program for making four demonstration grants to encourage energy efficient construction or rehabilitation. Provides that the demonstration projects must be for the construction or rehabilitation of a building by a public school corporation and a building by a public institution of higher education and the construction of a primary residence and the rehabilitation of a primary residence that are supported by a city or town. Requires an applicant to verify that the applicant's project will generate private spending in the community, create jobs that are not directly created by the project, and result in increased state and local tax revenue. Establishes the amount of each grant amount as the amount necessary to reduce the annual percentage rate for the borrowing necessary to complete the project by one percent. Provides that the office shall use money available to it under the American Recovery and Reinvestment Act of 2009 to make the grants.

Votes: None taken

 

HB1056: Development of back country areas at State forests

Authors: Rep. Pierce (D), Rep. Foley (R), Rep. Pflum (D)

Status: Died in the House Natural Resources Committee

Digest: Provides that backcountry areas of Yellowwood State Forest and Morgan Monroe State Forest may not be developed in a manner that permits motorized access, sale of timber, or commercial activity.

Summary: CAC supports this bill. The Back Country areas of Morgan-Monroe and Yellowwood State Forest, over 3,000 acres, are once again under attack. These areas are currently designated as wilderness areas which would allow single-tree selection cuts. The Indiana Department of Natural Resources has plans currently to log these areas. However, the Division of Forestry continues to maintain that this is an area of special habitat and have held it up as an example of forest that is not subject to commercial activity. These areas are heavily used by the people of the State and the Region for hiking, trail running, bird watching, hunting, and back packing. The intent of this bill is to not allow commercial activity in the area. While the rest of the forest in the state system is seeing a 400% increase in commercial logging -- this area has not been cut since before its designation as a wilderness area. Not only are these areas valued for their ecological and recreational importance, but also the revenues realized by local economies as a result of tourism are far higher than any dollars that will be made by from commercial logging activities.

Votes: None taken

 

HB1063: Energy Efficient Buildings

Authors: Rep. Pierce (D), Rep. Harris (D), Rep. Candelaria Reardon (D)

Sponsors: Sen. Gard (R), Sen. Tallian (D), Sen. Errington (D), Sen. Breaux (D)

Status: Died in the Senate.

Digest: Requires certain government buildings to be designed and constructed to achieve or exceed the performance criteria determined under current rating systems. Specifies that the Environmental Protection Agency's Energy Star rating system is an optional standard permissible only for the renovation or reconstruction of a government building. Provides that Indiana hardwood lumber may be considered for use as a local source material in any project in which the use of Indiana hardwood lumber is practicable. Recognizes a 2006 timberland study.

Summary: CAC supports this bill. This bill requires a government building to be designed, constructed, operated, and maintained to achieve or exceed the level of energy efficiency required under certain rating systems. Buildings represent 39% of the energy, 72% of the electricity, and 55% of the natural gas in the U.S. annually. The benefits of green building are a significant cost savings for Indiana taxpayers, improved worker health and productivity, improved public and environmental health, and a huge reduction in CO2 emissions. We must act now on changing the way we construct our buildings in Indiana. By continuing to use outdated energy codes, we are throwing away our tax dollars and unnecessarily wasting energy, water, and other precious natural resources.

On Wednesday January 13th, HB1063, energy efficient buildings was heard in the Environmental Affairs committee. The only opposition to the bill was offered by Indiana Cities and Towns who continue failing to recognize that the initial investments involved in building an EE building will actually save taxpayer dollars. The supporters of the bill included CAC, Sierra Club, HEC, the American Institute of Architects, the Nature Conservancy, and Indianapolis Power and Light. For the 3rd year in a row, the bill moved out of committee. HB1063 will now move to the floor for 2nd reading next week and be available for amendments by any member of the House.

Energy Efficient Buildings, HB1063, passed out of the Senate Energy and Environmental Affairs Committee on Monday by a vote of 6-2. All 4 Democrats on the committee were joined by Republicans Sen. Gard and Sen. Dillon in voting yea and moving the bill forward. Sen. Gard amended the bill to mirror Gov. Daniels executive order of 2 years ago by changing the language from the "stick" approach of requiring government buildings be built to energy efficient standards, to the "carrot" approach of requiring energy efficiency to the "extent this can be accomplished in a cost effective basis." The primary issue with the Governor's Executive Order and now the Sen. Gard amended version of the bill is that it directs the Department of Administration to develop design standards for government buildings to achieve maximum energy efficiency. Gov. Daniels issued this order nearly 2 years ago and still the DOA has not acted; and the Sen. Gard amendment does not set a deadline for the DOA to develop these standards and report back to the General Assembly. I would compare this to an unfunded mandate. Hey this is a great idea, but we're not going to actually require the law be enacted! Despite the weakening of the language, Sen. Gard should be applauded for moving the bill forward. It will be on 2nd reading Monday on the Senate floor and if the full Senate does move the bill, Rep. Pierce will undoubtedly dissent on the amended version and attempt to bring the language closer to his original mandate during the conference committee process.

• 01-13-10: HB1063 passed out of the House Environmental Affairs Committee by a vote of 8-3.
• 01-28-10: HB1063 passed out of the House by a vote of 51-47.
• 02-15-10: HB1063 passed out of the Senate Environmental Affairs Committee by a vote of 6-2.

 

HB1094: Net Metering

Authors: Rep. Dvorak (D), Rep. Culver (R), Rep. Koch (R), Rep. Moses (D)

Sponsors: Sen. Merritt (R), Sen. Errington (D), Sen. Breaux (D)

Status: Died in the Senate

Digest: Requires the utility regulatory commission (IURC) to adopt emergency rules amending the IURC's net metering and interconnection rules for electric utilities. Provides that the amended rules must: (1) make net metering available to all customer classes; (2) allow specified customer classes to interconnect generating facilities with specified nameplate capacities to a distribution facility of an electric utility; and (3) allow a net metering customer to interconnect a generating facility that makes use of specified technologies. Provides that the existing rules are void to the extent they do not comply with the requirements for the amended rules. Requires the IURC to report to the regulatory flexibility committee on the IURC's progress in adopting the amended rules.

Summary: CAC supports this bill. Currently, net metering is limited to only 10 kilowatts, and only to residential customers and K-12 schools. This bill would expand eligible customers classes to allow individuals, businesses, commercial industries, and universities to generate their own electricity. The utility would also be required to add a credit to the customer's bill for any surplus power that is generated. This bill encourages renewable energy production, energy independence. and customer owned generation.

On Monday January 11th, HB1094, net metering, was heard. Testimony was taken but no vote. Supporters of the bill included CAC, Sierra Club, HEC, Cummins, Performance Solutions, Indiana Renewable Energy Association, ECI Wind and Solar, and a student with the DePauw Environmental Policy Project also spoke in support. The Indiana Energy Association spoke, but their support in favor or opposition to the legislation was unclear. They support a change in the net metering rule, however, they support a level of 100kW for all customer classes. HB1094 takes a tiered approach based on customer classes, allowing for much higher capacities for industry, schools, businesses and municipalities than for residential customers. The IEA brought in a utility engineer and a union line worker to discuss some safety issues, although neither proved very effective. The IEA also once again raised the issue of cross-subsidies and the impact on rates to consumers. It is curious how the IEA only expresses compassion for ratepayers when the issue of renewable customer-owned generation is discussed, yet fail to mention the impact on ratepayers when they support various tracker legislation or expansion of CWIP to multi-billion nuclear reactors. There will be some amendments offered to the bill to address concerns of certain legislators and impacted parties, and the bill is expected to move out of committee over the next two weeks.

HB1094, authored by Rep. Ryan Dvorak (D, South Bend), was amended and passed in the House Utility Committee on Thursday morning (1/21/10). No debate was held or opposition offered on the first two amendments and both were adopted by consent. The first amendment offered by Rep. Dvorak made some changes to the definitions of fuel sources or technologies eligible for net met metering and requires that aggregate metering be allowed. Most of the changes to the definitions were an attempt to build a broader coalition of support by allowing combined heat and power systems, algae, natural gas, and combustion engines. CAC certainly respects the need for coalition building in order to move policy, however, we would express concern over the addition of natural gas and combustion engines. The original intent of net metering was to encourage the deployment of customer-owned renewable energy. Combustion engines and natural gas are not renewable, especially when we remember that in the 2009 session, the definition of natural gas was changed to include substitute natural gas derived from coal.

Rep. Dvorak's second amendment removed the capacity limits on customer classes, and replaced it with language that allows any customer to interconnect a renewable energy system that is sized to meet all or part of that customer's energy load. This was a good policy decision as customers who wish to install a renewable system should not be restricted by what "class" of customer they are, instead, they should be allowed to size a system based on their energy needs.

The third and fourth amendments, offerred by Rep. Battles (D, Vincennes), removed the municipal utilities and the rural cooperatives from having to comply with the new metering rule. A roll call was requested on both amendments and they both passed by a vote of 10-2, the only nays coming from Rep. Dvorak and Rep. Matt Pierce. The majority of municipals and co-ops have opted out of IURC oversight, meaning they are non-jurisdictional utilities for the purpose of rate- making, or un-regulated. Both entities wrongly believe that by being forced to comply with the net metering rule, it will infringe upon their authority as a non-jurisdictional utility. CAC believes that by exempting these entities, non-investor owned utility customers are being discriminated against. Any consumer who wishes to invest in renewable energy and interconnect to the grid, should be allowed to. It should not matter who their electric company is. It also important to note that when you combine the service territories of the municipals and co-ops, you are also excluding approximately 70% of the State's geography, most of which is rural with abundant renewable resources.

Despite the exclusions and additions noted above, the intent of HB1094 remains. Overall, it is a good piece of public policy that serves to encourage consumers ability to generate their own energy and will result in the expansion of renewable energy generation in Indiana.

• 01-21-10: HB1094 passed out of the House Commerce, Energy, Technology and Utilities Committee by a vote of 8-4.
• 02-02-10: HB1094 passed out of the House by a vote of 78-21.
• 02-18-10: HB1094 passed out of the Senate Utilities and Technology Committee by a vote of 10-0.

 

HB1177: Election of Utility Consumer Counselor

Authors: Rep. Moses (D), Rep. Battles (D)

Status: Died in the House Commerce, Energy, Technology and Utilities Committee

Digest: Provides for the election of the utility consumer counselor. Makes technical changes.

Summary: CAC supports this bill. We feel it necessary as a State to elect 150 members of the General Assembly, a Governor, a Treasurer, and countless other officials to oversee approximately $13B in State tax revenues, yet Hoosier consumers and businesses spend more of their hard earned income on utility bills and have no voice as to who oversees those dollars and regulates the utility industry. The Utility Consumer Counselor is appointed by the Governor and serves at the pleasure of the Governor. To make matters worse, no confirmation process is required, no oversight by the General Assembly authorized, and at no point in the process is input from the public accepted. The appointment process is behind closed doors and closed to Indiana consumers. The Utility Consumer Counselor has the authority to represent consumers before any preceding before the Indiana Utility Regulatory Commission, the Indiana Department of Transportation, and the Indiana Department of Revenue. The power of the Counselor also extends to intervention in any suit or action in a court or federal agency that may effect the consumers of a utility, a motor carrier, or a railroad doing business in Indiana. The Utility Consumer Counselor is charged with protecting the consumers of Indiana. Therefore it is only fair and just that the consumers of Indiana decide who represents them. That individual should not feel beholden to the agenda of the Governor who appoints them, but rather should feel a duty and responsibility to serve and protect those that elect them.

Votes: None taken

 

HB1190: Advanced Renewable Energy Contracts

Authors: Rep. Pierce (D)

Status: Died in the House Commerce, Energy, Technology and Utilities Committee

Digest: This bill requires a person that operates an electric grid to: (1) provide priority interconnections between renewable energy facilities and the grid operator's grid; (2) transmit on a priority basis electricity generated by renewable energy facilities that are connected to its grid; and (3) perform necessary grid upgrades to enable the interconnection of renewable energy facilities. This bill requires an energy utility to enter into a contract for the purchase of electricity generated by a renewable energy facility upon the request of the facility operator. It provides that the contract must be for a term of at least 20 years (or at least 40 years for a hydro-power facility) and must require the energy utility to purchase electricity from the renewable energy facility.

Summary: CAC supports this bill. Feed in tariffs require 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 obligates 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. 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.

Votes: None taken

 

HB1274: Rate Adjustment Mechanisms

Authors: Rep. Moses (D), Rep. Pierce (D)

Status: Died in the House Commerce, Energy, Technology and Utilities Committee

Digest: Provides that not later than two years after the effective date of an order of the utility regulatory commission (IURC) approving a rate adjustment mechanism for an energy utility, the IURC shall review, and revise as necessary, the utility's basic rates and charges. Requires the IURC to use the procedures governing a general rate case in conducting the review.

Summary: CAC supports this bill. Adjustable rate mechanism is the legal term for a tracker. There are trackers for things such as environmental compliance, "clean coal' projects, and fuel purchases. Trackers allow a utility company to raise rates when their costs go up, without having to lower rates when their costs go down. They only have to show the expenses involved with that particular project or improvement, without having to open their books and show where costs have gone down, which would result in savings to ratepayers. Trackers are single issue ratemaking, an erosion of consumer protections, and have led to significant increases in Indiana utility rates with little oversight from State regulators. Trackers often lead to poor business decisions and planning by utilities as they have a mechanism in place that allows them to choose the most expensive option, without having to explore and evaluate all options and the impact those options have on their customers. Under Indiana's current regulatory environment, the more a utility company spends, the more they make. So left to their own devices, they will always choose the most expensive options. This bill will help level the playing field by telling a utility company if you wish to use a tracker, go right ahead, but you must open your books within 24 months for public scrutiny. Captive ratepayers deserve nothing less.

On Thursday January 15th, HB1274, adjustable rate mechanisms, was heard. Again, testimony was taken, but no vote. Adjustable rate mechanism is the legal term for a tracker. HB1274, authored by Rep. Moses and Rep. Pierce, would require utilities that receive a tracker, to file a full base rate case within 24 months of the authorization of the tracker. The Indiana Energy Association of course opposed the legislation. They expressed concern over the length of time and expense involved in filing a base rate case. They also suggested that trackers reduce shareholder risk, which means that credit rating agencies look upon them more favorably and they receive higher credit ratings as a result, which ultimately benefits ratepayers. Supporters of the bill included CAC, AARP, and INDIEC, the lobbying group for the industrial customers.

Votes: None taken

 

HB1275: Indiana utility regulatory commission fining authority

Authors: Rep. Moses (D)

Status: Died in the House Commerce, Energy, Technology and Utilities Committee

Digest: Allows the utility regulatory commission (IURC) to impose a civil penalty of up to $5,000 if a public utility providing energy services violates or fails to comply with any: (1) utility law; or (2) rate or service requirement imposed by the IURC. Allows the IURC to impose an additional penalty of up to $10,000 if the violation or failure to comply demonstrates a willful disregard by the public utility of the public utility's duty to remedy the violation or a willful failure to comply. Specifies that a suit to recover or collect a forfeiture or penalty imposed by the IURC shall be brought by the IURC or, at the IURC's option, by the attorney general. Provides that if the IURC acts independently of the attorney general to recover or collect a forfeiture or penalty, the IURC may, subject to the approval of the governor and the budget agency, contract with outside counsel to prosecute, or assist the IURC in prosecuting, the suit.

Summary: CAC supports this bill. Other regulatory agencies of the State of Indiana have the ability to levy monetary fines and penalties on the entities that they regulate and oversee. However, the IURC currently lacks the authority to impose a monetary penalty on utility companies that violate utility law or any requirement that they may order. This fact is especially unacceptable when you consider the fact that utility companies currently by law, have a captive ratebase and a monopoly service territory. The burden to recover monies that result from a violation of the law then falls upon that captive ratebase who lack the necessary resources and expertise to engage in a legal battle with well funded and well staffed utility companies.

Votes: None taken

 

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These are the bad bills that died in the 2013 Indiana General Assembly:

 

SB69: Low carbon and non-carbon dioxide emitting plants

Authors: Sen. Boots (R), Sen. Stutzman (R)

Status: Died in the Senate Utilities and Technology Committee

Digest: Provides that: (1) low carbon dioxide emitting or noncarbon dioxide emitting energy production or generating facilities; and (2) purchases of energy produced by such facilities; qualify for the financial incentives available for clean energy projects. Provides that a combined heat and power facility qualifies as a renewable energy resource for purposes of the statute that provides financial incentives for clean energy projects. Provides that an eligible business may recover qualified utility system expenses, which include specified preconstruction costs, associated with a: (1) new energy production or generating facility; or (2) low carbon dioxide emitting or noncarbon dioxide emitting energy production or generating facility. Changes the term "clean coal and energy projects" to "clean energy projects" to allow the term to include low carbon dioxide emitting or noncarbon dioxide emitting energy production or generating facilities. Makes other technical changes.

Summary: Just like last year, low carbon and non-carbon is code for nuclear power. This bill is designed to extend construction work in progress (CWIP) to nuclear reactors. It also extends CWIP to any transmission lines or associated equipment. It goes a step further by adding "siting, design, licensing, and permitting costs, regardless of whether the facility for which such costs are incurred is ultimately constructed or placed in service." Wall Street will not finance new reactors therefore utilities cannot build them without CWIP. Ratepayers should not be the involuntary, captive financiers of these unnecessary power plants. To paraphrase Mark Cooper, CWIP assumes that ratepayers have nothing better to do with their money than to give interest free loans to utility companies.

Votes: None taken

 

SB115: Eminent domain for carbon dioxide pipeline

Authors: Sen. Gard (R), Sen. Bray (R), Sen. Waterman (R),Sen. Hume (D)

Sponsors: Rep. Battles (D), Rep. Koch (R), Rep. Stillwell (R)

Status: Died in the House Commerce, Energy, Technology, & Utilities Committee

Digest: Permits an entity engaged in the transportation of carbon dioxide by pipeline to acquire real property by eminent domain.

Summary: The intent of SB115 is fairly obvious. It permits an entity engaged in the transportation of carbon dioxide by pipeline to acquire real property by eminent domain. That entity can be a person, a firm, a partnership, a limited liability company, or a corporation. The bill wrongly declares that "the transportation of carbon dioxide by pipeline in Indiana is declared to be a public use and service, in the public interest, and a benefit to the welfare of Indiana and the people of Indiana." This is one of several pieces of legislation that the industry needs to enable carbon capture and storage (CCS). This bill addresses property rights issues, but does not address financing, stewardship, or liability, so we are expecting several more bills relating to CCS will be introduced. We also object to the committee assignment of this bill. The CCS issue was vetted through the energy and utility committees last year and should not have been assigned to a committee unfamiliar with the issue. This is an obvious end around, piece meal approach and an attempt to keep us off guard.

On Tuesday (1/19/10), by a vote of 9-1, the Senate Civil Matters Committee sent SB115, eminent domain for carbon dioxide pipeline, to the Senate floor. The only nay vote came from Sen. Mike Delph (R, Carmel). The bill was explained and supported by both Denbury Resources and Leucadia Corporation. Denbury is a multi-billion dollar company whose primary business is enhanced oil recovery, or the use of CO2 to extract oil and gas from depleted reservoirs. Denbury has proposed to build a pipeline from Mississippi into SW Indiana to transport the CO2 from coal-fired power plants, most notably Duke's Edwardsport IGCC and the proposed Leucadia project, Indiana Gasification project in Rockport, IN. The bill was presented as necessary to build an 8-9 mile pipeline to connect the Rockport project. In their presentations however, they failed to point out that the Edwarpdsort IGCC is being built without the ability to capture CO2, and that despite 3 previous pieces of legislation and years of negotiations, Indiana Gasification remains nothing more than a fantasy based on a PowerPoint presentation.

CAC's testimony was met with challenges, mockery, and disrespect. Despite the fact that supporters spoke about the Rockport project and the greatness that is coal, objection was raised to the relevance of CAC's testimony addressing those same issues. Laughter and smirks were prevalent when the benefits of wind energy, solar energy, and efficiency were mentioned. What occurred is what we feared. By assigning this bill to the Civil Matters committee, a discussion was forced on energy policy in a committee that does not deal with the topic. Also, if this bill is in fact only to enable an 8-9 pipeline to Rockport, IN, then why does the bill grant any entity eminent domain anywhere in the State for the purposes of transporting CO2 for carbon sequestration, enhanced oil recovery, or other matters? Sequestration was not discussed, nor was "other matters" defined. CAC would suggest this bill is about far more than an 8-9 mile pipeline.

The notion of giving privately held corporations eminent domain is reason enough to oppose this bill. But we believe this bill has moved us past a discussion about coal and coal plants, and into a larger discussion about the role of government. What we have here is a multi-billion dollar corporation with unfettered access, unlimited cash, and massive influence using the legislative process to mandate their agenda because the free market simply will not support their business plan. Not only has legislation passed guaranteeing them a revenue stream in the form of the captive ratepayers of Indiana, legislation has been railroaded through guaranteeing a marketplace, which is now the State of Indiana, better known as taxpayers. Now, in addition to ratepayers and taxpayers being used as involuntary financiers, authority has been granted for these private, un-regulated corporations to take our property, no questions asked.

Eminent Domain for Carbon Dioxide Pipeline, SB115, is almost officially dead. It has not been scheduled for a committee hearing yet and if the newly agreed upon deadlines between the House and Senate are honored, at the end of the day Monday, it will be dead. However, rules were meant to be broken, so we must maintain the calls and e-mails on this until the gavel falls. Even though Rep. Moses held firm and did not schedule the bill to be heard, since the bill passed the full Senate, the language is available for insertion during the conference committee process. So we will be paying attention closely during these last few weeks to make sure a last ditch attempt is not made to make this egregious bill a new State law.

• 01-19-10: SB115 passed out of the Senate Corrections, Criminal and Civil Matters Committee, by a vote of 9-1.
• 01-28-10: SB115 passed out of the Senate by a vote of 36-12.

 

SB211: Carbon dioxide storage and transportation

Authors: Sen. Gard (R)

Status: Died in the Senate Energy and Environmental Affairs Committee

Digest: Delineates the jurisdiction of the department of environmental management, the utility regulatory commission, and the department of natural resources with respect to various aspects of carbon dioxide transportation and storage.

Summary: CAC opposes this bill. First of all, the digest of this bill is unbelievably deceptive and disingenuous. This piece of legislation does a whole lot more than “delineate the jurisdiction” with respect to CO2 transportation and storage. After a little over 4 pages of definitions, clarifications, and identifications (which is indicative of the complexity of the issue), the remaining 2 ½ pages should strike fear in all of us who cherish our environment, our health, our property, and our wallets. What those pages attempt to do is:

1. Remove the authority of the IURC to regulate rates charged by the operators of CO2 storage and transportation projects;
2. Allow jurisdictional utilities the authority to recover, through a tracker, those rates that are un-regulated by those operators of CO2 storage and transportation projects;
3. Mandate the DNR to issue a permit for CO2 storage and transportation based on criteria that cannot be measured or verified;
4. Remove the customary bond that is required for oil and gas wells;
5. Remove the statutory spacing requirements for oil and gas wells; i.e. removing minimum size requirements and distance between wells and adjacent property owners “regardless of depth, well spacing, production of hydrocarbons, or any other factor.”;
6. Supersede any previous law and override the authority of any other governmental agency or political subdivision relative to regulating the storage or transportation of CO2, or the withdrawal or production of CO2 from a storage facility;
7. And finally, proclaim that “CO2 is not considered a pollutant, a nuisance, a hazardous waste, or a deleterious substance.”
9. Votes: None taken

 

HB1081: Various Utility Matters

Authors: Rep. Grubb (D), Rep. Koch (R)

Status: Died in the House Commerce, Energy, Technology and Utilities Committee

Digest: Requires the utility regulatory commission (IURC) to consider in the rate base of a public utility that complies with certain renewable energy standards (RES) one-half of any capital expenditures made by the public utility to extend gas or electric service to a customer that produces biofuels. Requires the IURC to provide certain financial incentives for implementing electric line facilities projects to electricity suppliers that comply with a certain RES. Requires electricity suppliers to comply with an RES by specified dates. Provides that an electricity supplier that does not comply with a higher RES is not eligible for certain financial incentives related to renewable energy development. Requires the IURC to encourage the use of American made products in certain utility programs.

Summary: CAC opposes this bill. First, it is not the obligation of a utility ratepayer to pay for utility infrastructure for a bio-fuels project. Bio-fuel plants provide no benefit or service to a utility ratepayer. Ratepayers pay for utility service. The ratebase should not be used as an economic development tool. Second, HB1081 is loaded with trackers for transmission, generation, distribution and other things that utilities can plan for, and more importantly, are the cost of doing business. In exchange for a monopoly service territory and a captive ratebase, investor owned utilities are required by law to deliver reliable service. They should NOT receive extra incentives to provide what they are mandated to provide. Third, coal and tires are not a renewable energy resource. Fourth, the targets set in the RES are far too low. Most of the utilities are on pace to meet or exceed those targets right now.

Last, purchasing out of state Renewable Energy Credits (RECS), but not the associated power, should not qualify to satisfy an RES. RECS represent the environmental attributes of the generated power, but not the power itself. Again, ratepayers pay for the delivery of electricity. Essentially this bill allows the utilities to purchase very cheap RECS, not power, from anywhere in MISO or PJM and use those to fulfill the schedule. They can then charge captive ratepayers for those RECS after adding their expected rate of return; without any direct benefit to ratepayers or the public. No economic development, no environmental benefit, no improvement in public health, and worse of all, no electricity which is what ratepayers pay for. While other States, and possibly even other countries, see economic development and improved environmental quality and public health as a result of renewable energy, Hoosier ratepayers are stuck with higher bills and stuck paying the price for virtually all of Indiana's electricity coming from dirty coal.

Votes: None taken