When you need to cut back on your bills at home, what do you do? Make sure you turn off lights, run the dryer less, turn the thermostat down? Using less power is a simple way to lower costs, but another is using your electricity more efficiently.
In 2012, Indiana's began its first energy efficiency program. Known as Energizing Indiana, the program offered residential electricity users home energy audits, assessing heating and cooling systems, insulation, installing sink aerators, changing lightbulbs and more. Businesses could apply for rebates for improving or upgrading equipment and systems to use less energy.
Through just the first phase of the program, the state saved enough energy to power 78,000 homes according to a study by the Purdue State Utility Forecasting Group and was expected to save 1,800 megawatts of peak demand by 2022. By charging rate payers just an average of $2 on their power bill, energy efficiency experts could return double to triple the savings. Small changes have big impacts; the savings by 2022 are equal to two entire power plants similar to the coal-fired plant on Harding Street.
During the 2014 session, legislators passed a bill (SEA 340) ending this program, with no indication of what steps they would take next. The bill, first introduced by Senate Utilities Chair Jim Merritt (R-Indianapolis), originally just amended Energizing Indiana to let industries using more than 1 megawatt opt-out of the program, but House member Heath VanNatter (R-Kokomo) expanded it to prohibit the Indiana Utility Regulatory Commission (IURC) from extending or entering into new contracts for the program after Dec. 31, 2014. Passing both chambers by a wide margin, this bill made Indiana the first state to end energy efficiency plans.
Governor Pence allowed the bill to become law without signing it, saying that he thought the program was "worthwhile," but that he didn't want to raise the rates on any rate payers. This is a confusing stance when the program offered 2:1 savings and 3:1 in many cases, kept almost the same number of Hoosiers employed as the state's coal industry, and kept energy demand within current capacity levels, making the costly-to-ratepayers building of additional power plants unnecessary.
The Governor did instruct the legislature to come up with an alternative plan this session and it is expected they will address the issue. The primary concern is that they will allow the utilities to "self regulate" and come up with their own energy efficiency programs for their customers. This is not acceptable. Aside from the conflict of interest in asking companies to limit sales on their revenue-generating product, we know from the past that their programs did not result in the same kind of savings that the independent Energizing Indiana does.
Critics of the program suggest that after the low-cost energy audits and upgrades are accomplished that the savings in future years will not be as dramatic. Senator Merritt, who originally applauded the IURC and Governor Daniels' administration when they introduced the program, said that he "found that it was an inexpensive program to start when it was changing light bulbs and wrapping pipes and simple measures such as that to save energy...When you look at the second four years, 2015-2019, those simple measures just aren’t there." That is far too narrow and short sighted of a view, as Indiana has not embraced energy efficiency previously, not only do we have a large job ahead of us, but the technology is constantly improving, new construction is ongoing, making future steps to curtail consumption just as necessary as current ones. Neighboring states are already having these conversations and generating new ideas in how to responsibly use energy beyond changing lightbulbs, meanwhile Indiana is cutting off our progress at the lightbulb step.
Saving on our state's power bills isn't just good economic policy, it's essential to keeping our state's air and water clean. Indiana derives 84% of its power from coal which produces a bevy of toxic chemicals on the ground and in the air. Public health demands we reduce our heavy reliance on coal, our aging power plants place us in the pivotal position of having to make some serious decisions about the future of energy production in Indiana. Reducing our consumption puts us in the right place to move forward on a healthy and sustainable future that all Hoosiers need.