Committee Approves Alternative To Energy Efficiency Program

Jan 23, 2015

Under the proposed Senate bill, the Indiana Utility Regulatory Commission would be tasked with approving utility companies' energy efficiency plans.
Credit Patrick Finnegan / https://www.flickr.com/photos/vax-o-matic/

A state Senate committee approved legislation Thursday creating a new energy efficiency program, which would largely be directed by utility companies, to replace the one lawmakers eliminated last year.

The state’s previous energy efficiency program set energy savings goals utility companies were expected to meet. Legislation proposed by state Senator Jim Merritt, R-Indianapolis, and crafted by Governor Mike Pence’s office allows utility companies to set their own efficiency goals.

The Indiana Utility Regulatory Commission would then approve the utilities’ plans.

Critics of the proposed program say allowing utility companies to set their own goals will mean less energy efficiency than if the state created savings goals utilities would have to meet.

Ray Wilson, an engineer who’s helped Indiana churches with energy efficiency efforts, says he has a problem with the language of the proposed bill that tells utility companies to set “reasonably achievable” efficiency goals.

“This is imprecise and would allow a utility to choose any goal they wanted,” Wilson says.

Wilson says the state should set goals utilities would have to meet.

But IURC officials say creating a one-size-fits-all goal for every utility doesn’t acknowledge uncertainties in the energy marketplace.

“Due to uncertainties caused by changing technologies, economics and federal regulatory mandates, a one-size-fits-all model is no longer appropriate,” says IURC External Affairs Director Chetrice Mosley.

The IURC’s process would allow Hoosier ratepayers to weigh in before the agency approves the utilities’ plans.

The bill also allows utility companies to recover, without limits, what are called “lost revenues,” helping them recoup what they spend on energy efficiency by raising rates on their consumers.

Citizens Action Coalition executive director Kerwin Olson says he can’t find any other state that allows utilities to recover lost revenues without capping the amount.

“You are causing energy efficiency programs to be far more expensive than they otherwise need to be; you’re stealing the economic benefit of those programs away from the customer to the utility,” Olson says.

Merritt says the bill is far from a finished product and wants to get the governor’s feedback on capping lost revenue recovery.