ILNews

Will Indiana's economy cool due to rising energy costs?

Back to TopCommentsE-mailPrintBookmark and Share
Indiana Lawyer Focus

If you own the poplar iPhone application “Gas Buddy,” then you are no doubt familiar with its periodic “Price Hike Alerts” warning of impending local gas price spikes. Though not as imminent or dramatic as the overnight price spikes we often see at the pumps, there is indeed an increase looming for Indiana’s electricity prices. Indiana is losing its foot-hold as a low-cost energy state, having dropped from fourth to 13th in the nation since 2002. The reason? Simply stated, new and pending environmental regulations are requiring cleaner coal energy. For better or worse, more than 80 percent of Indiana’s electricity generation comes from coal. The cost to clean up the coal plants to meet environmental regulations can easily climb into the hundreds of millions.

shoultz Shoultz

Another culprit for Indiana’s rising energy costs is Father Time. More than 76 percent of Indiana’s utility-owned electricity generating units are nearing retirement with over 30 years in service. There’s a bit of a perfect storm brewing, leaving Indiana utilities with few good choices for serving demand, controlling prices and complying with environmental regulations.

Indiana’s largest commercial and industrial companies are understandably concerned. One Hoosier manufacturer has stated that utilities account for approximately 50 percent of its total costs to convert raw materials to a finished, marketable product. Many of Indiana’s manufacturers are competing nationally and internationally. While Indiana enjoys the jobs and tax contributions from large companies, the cost of energy often plays a significant role in a company’s decision to stay here, particularly when millions can be saved by relocating production facilities to another state or country with lower-cost energy.

Like commuters jockeying to find cheap gas before the price hike, some Indiana companies are exploring ways to minimize the harm expected from increasing electricity prices. Some are considering building their own generation facilities; others are seeking discounted rates through special contracts with their electric utility. Many are taking a closer look at ways to conserve energy, either through efficiency measures or by agreeing to interrupt their operations during high-cost peak demand periods.

Policymakers have noticed. In the 2013 session, the Indiana General Assembly passed legislation that, among other things, allows large customers to apply for short-term discounts of up to 30-percent off a portion of their electricity bill. To receive the discounts, companies must get approval from the Indiana Economic Development Corporation and show that the discount is necessary to attract and maintain jobs. After prodding by some of Indiana’s largest companies, the Indiana Utility Regulatory Commission is now investigating whether large users must pay for their utility’s standard energy efficiency programs if the customer self-funds its own initiative that is specifically tailored to reduce the customer’s energy consumption.

Many question if Indiana can be saved by competition. On Sept. 19, the Indiana General Assembly’s Regulatory Flexibility Committee will hear at least one view on whether Indiana’s law should be changed to allow customers to choose their electricity provider. Proponents of the idea say that in “customer choice” states like Illinois, customers enjoy lower overall electricity prices because the competitive market is at work. Opponents, including Indiana’s investor-owned utilities, say that states with customer choice actually have higher electricity rates. They claim that an open market creates volatility, which in turn discourages utilities from investing in much-needed baseload capacity.

It is too soon to tell whether our state’s energy policy has gone far enough to save Indiana’s economy from an exodus of our largest businesses. Will our leaders successfully navigate the complicated political waters to create energy policies that attract and retain jobs critical to Indiana’s economy while satisfying residential customers, utilities and federal mandates for cleaner energy? It is a tall order, for sure, but we need to get it right.•

__________

Nikki Shoultz is a partner is the Utilities, Energy & Renewables Group at Bose McKinney & Evans LLP. She can be reached at nshoultz@boselaw.com.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Historically speaking pagans devalue children and worship animals. How close are we? Consider the ruling above plus today's tidbit from the politically correct high Court: http://indianacourts.us/times/2016/12/are-you-asking-the-right-questions-intimate-partner-violence-and-pet-abuse/

  2. The father is a convicted of spousal abuse. 2 restaining orders been put on him, never made any difference the whole time she was there. The time he choked the mother she dropped the baby the police were called. That was the only time he was taken away. The mother was suppose to have been notified when he was released no call was ever made. He made his way back, kicked the door open and terrified the mother. She ran down the hallway and locked herself and the baby in the bathroom called 911. The police came and said there was nothing they could do (the policeman was a old friend from highschool, good ole boy thing).They told her he could burn the place down as long as she wasn't in it.The mother got another resataining order, the judge told her if you were my daughter I would tell you to leave. So she did. He told her "If you ever leave me I will make your life hell, you don't know who your f!@#$%^ with". The fathers other 2 grown children from his 1st exwife havent spoke 1 word to him in almost 15yrs not 1 word.This is what will be a forsure nightmare for this little girl who is in the hands of pillar of the community. Totally corrupt system. Where I come from I would be in jail not only for that but non payment of child support. Unbelievably pitiful...

  3. dsm 5 indicates that a lot of kids with gender dysphoria grow out of it. so is it really a good idea to encourage gender reassignment? Perhaps that should wait for the age of majority. I don't question the compassionate motives of many of the trans-advocates, but I do question their wisdom. Likewise, they should not question the compassion of those whose potty policies differ. too often, any opposition to the official GLBT agenda is instantly denounced as "homophobia" etc.

  4. @ President Snow, like they really read these comments or have the GUTS to show what is the right thing to do. They are just worrying about planning the next retirement party, the others JUST DO NOT CARE about what is right. Its the Good Ol'Boys - they do not care about the rights of the mother or child, they just care about their next vote, which, from what I gather, the mother left the state of Indiana because of the domestic violence that was going on through out the marriage, the father had three restraining orders on him from three different women, but yet, the COA judges sent a strong message, go ahead men put your women in place, do what you have to do, you have our backs... I just wish the REAL truth could be told about this situation... Please pray for this child and mother that God will some how make things right and send a miracle from above.

  5. I hear you.... Us Christians are the minority. The LGBTs groups have more rights than the Christians..... How come when we express our faith openly in public we are prosecuted? This justice system do not want to seem "bias" but yet forgets who have voted them into office.

ADVERTISEMENT