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


Post a comment to this story

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
Subscribe to Indiana Lawyer
  1. This is ridiculous. Most JDs not practicing law don't know squat to justify calling themselves a lawyer. Maybe they should try visiting the inside of a courtroom before they go around calling themselves lawyers. This kind of promotional BS just increases the volume of people with JDs that are underqualified thereby dragging all the rest of us down likewise.

  2. I think it is safe to say that those Hoosier's with the most confidence in the Indiana judicial system are those Hoosier's who have never had the displeasure of dealing with the Hoosier court system.

  3. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  4. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  5. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.