By Grant Smith
Jul 1, 2014
I spent the month of May in Germany investigating the German energy transition.
The Energiewende is the government’s policy to shift from conventional coal and nuclear plants to renewables and energy efficiency. Suffice it to say, it’s alive and well. Moreover, the hyperbole leveled here against it by those with a vested interest in the status quo – such as it has failed, costs are spiraling out of control, it’s leading to substantially more coal generation because of the planned nuclear phase out – is false, if not laced with lies.
The public dialogue there is vibrant and encouraged by the government, although most Germans (70%) oppose the government’s current plans to slow the transition.
It would be nice to have such a vibrant dialogue about energy policy in Indiana. At this point it doesn’t exist. The Indiana Energy Association (lobbying arm of the state’s largest utilities) makes its deals on golf courses and luncheons with legislators. By the time the legislative session begins, the deals have been cut and the chairs of the utilities committees in the Indiana House and Senate dutifully roll out the IEA’s legislation as ordered or by amendment with no committee discussion at all. The public is excluded from any decision-making.
Unfortunately for ratepayers, the IEA’s legislation is always designed to maximize utility profits, which is becoming a huge burden on the Indiana economy. These include: bills to force construction of Duke’s ridiculously expensive Edwardsport coal gasification power plant; bills to institute automatic rate increase mechanisms; bills to kill Energize Indiana (the statewide energy efficiency program), which will translate into hundreds of millions of windfall profits for electric utilities.
Tragically, there isn’t much thought going into utility-supported legislation. The General Assembly passes pro-utility legislation without knowledge of how it will impact rates and, ultimately, monthly bills for the rest of us. And the state apparently has neither the will nor the means nor, apparently, the concern to conduct such analyses. Legislators advocating for utility-sponsored bills are given 30-second sound bites designed to lend the legislation a positive spin – such as energy efficiency is too expensive, which, by the way, defies decades of studies and analyses to the contrary. The legislature is more a utility business plan enabler than a policymaking body. The interests of ratepayers – almost the entirety of lawmakers’ constituent base - are all but ignored.
The Governor says he’ll draft legislation to reinstate energy efficiency programs in Indiana. If he does, you can bet that it will be written by the IEA and designed to give the state’s utility companies complete control over them. You can figure on much weaker programs that do not come close to Energize Indiana in terms of savings for ratepayers. Given recent trends, you can also anticipate that the Governor, regulators and General Assembly will remain subservient to the EIA and blindly carry out its wishes. Moreover, there will no plans to meaningfully engage the public. If there’s one thing the IEA hates, it’s the light of day.
I feel compelled to draw on WWII-era slang to accurately describe Indiana’s so-called energy policy. This seems appropriate given how archaic our electric grid, populated with obsolete coal plants, has become. That term would be FUBAR – fouled up beyond all recognition.
The public must be a part of the energy policy discussion, particularly now with Indiana’s utility companies ratcheting up rates beyond reason and with no institutional pushback from the state’s elected leadership. The IEA has not only had an extremely detrimental impact on the state’s economy and ratepayer finances, it has exacted considerable damage to democracy in Indiana by corrupting our democratic institutions and processes. The public is the last line of defense and the mechanism for positive change.
In terms of state ratemaking and energy policy, the IEA is the problem. In other words, your local investor-owned utility – whether it be Duke Energy, Vectren, NIPSCO, IPL, or AEP (I&M) – is the problem. We can start by educating legislators that ratepayers, i.e. their voters – the foundation of the Hoosier community and economy – are much more important than utility companies. We can finish the dialogue by casting our votes accordingly.
CAC Board of Directors