By Kay Pashos
Indiana’s second 21st Century Energy Task Force began its work last month at the state Capitol. The first task force was created by the General Assembly in 2019 to explore how fuel transitions and emerging technologies may affect the state’s electric system, with particular emphasis on reliability and affordability. The first task force submitted a report to the General Assembly and the governor in December 2020. In its report, the first task force issued the following findings, among others:
• Reliability, resilience, stability, affordability and environmental sustainability are the five key pillars of a state energy policy, and one pillar cannot be addressed without impacting the other four.
• To keep Indiana competitive in attracting and retaining certain businesses, the state must encourage the deployment of renewable energy resources while not compromising the reliability and affordability of electric utility service.
• Renewable energy generation sources are highly desirable with respect to reducing carbon emissions, and they are presently economically competitive with existing conventional generation resources.
• Electricity generated from renewable energy sources is significantly more variable, is non-dispatchable and is often harder to predict than electricity generated from other energy resources because of the dependence of renewable sources on forces of nature.
• Successful integration of variable renewable resources into a power system requires other types of resources that can compensate for short- and long-term variability.
• The rapid development of advanced technologies, such as electric vehicles, could increase demand for electricity in the future.
• Utilities, the Indiana Utility Regulatory Commission and regional transmission organizations all play roles in assuring reliability, but the IURC may need additional tools or an additional mandate concerning reliability given the transition to renewables.
• The state has no clear, statutory metric to measure reliability; no clear, statewide reliability goal; and no statutory accountability mechanism to assure future electric reliability.
• Renewable energy offers new opportunities for Indiana to leverage its comparative advantage in manufacturing and attract new investment, jobs and infrastructure that grow local economies.
• Affordability of electricity has become a more important concern because electricity prices in Indiana are no longer among the lowest of the 50 states.
The task force concluded its report with the following recommendations, among others:
• That the General Assembly consider legislation to create a mechanism to be implemented and applied by the IURC with respect to individual electricity suppliers, assuring generation and transmission resource adequacy throughout Indiana.
• That the General Assembly consider legislation setting forth statewide specific metrics and goals for reliability.
• That the General Assembly consider legislation to extend the term of the 21st Century Energy Task Force for an additional two years, until Nov. 1, 2022, to enable further study of several issues.
In 2021, the General Assembly passed legislation reestablishing the task force following its expiration in December 2020. Like the first task force, this reestablished task force is comprised of members of the state Senate and House, the Indiana utility consumer counselor, the Indiana public finance director and members appointed by the governor. The task force is charged with studying the following issues:
• The management of stranded utility assets.
• Methods to assure fairness to all customer classes in retail electric rate structures, including alternative rate designs such as time-of-use pricing, real-time pricing and critical peak pricing.
• Appropriate regulation of the deployment of distributed energy resources, consistent with Federal Energy Regulatory Commission Order No. 2222.
• The impact on communities of utility plant or fuel source site closures.
• The status of energy efficiency efforts in Indiana and the potential development of a statewide energy efficiency plan.
• Energy issues affecting low-income communities and communities of color, in relation to business and employment opportunities in those communities.
• The potential use of “green zones” or “energy investment districts” in low-income communities or communities of color.
• Providing resources and assistance to impacted communities, such as directing a portion of any proceeds from the securitization of stranded utility assets toward the funding of local renewable energy resources and projects.
• Methods for the state to encourage electricity storage technology research.
• The impact of large-scale electric vehicle deployment on electric grid capacity and reliability.
• Electric vehicle charging station ownership and responsibility.
• Demand response and pricing systems that incentivize temporal shifting of electric load.
The 2021 legislation requires the task force to develop recommendations and issue a report setting forth such recommendations for the General Assembly and the governor no later than Nov. 1, 2022.•
• Kay Pashos is a partner at Ice Miller LLP and practices in the area of energy and utilities law, advising and representing energy and utility companies before state and federal regulatory agencies. She is also a member of the 21st Century Energy Task Force. Opinions expressed are those of the author.