Indiana experts weigh in on environmental issues

On Feb. 11, as part of Indianapolis Business Journal’s Power Breakfast series, six Indiana leaders discussed a wide range of environmental issues such as green manufacturing, energy efficiency, legislation and policy.

The panelists:

Jake Allen is team leader of marketing and program management at Indianapolis Power & Light Co.

Tom Easterday is executive vice president, secretary and general counsel of Subaru of Indiana Automotive Inc.

Thomas W. Easterly is commissioner of the Indiana Department of Environmental Management.

Jo Ann Gora is president of Ball State University.

Kären Haley directs the city of Indianapolis’ Office of Sustainability.

Jesse Kharbanda leads the Hoosier Environmental Council as its executive director.

IBJ reporter Chris O’Malley moderated the discussion.

The following are edited excerpts:

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IPL green initiatives: Jake, please give a snapshot of IPL’s green power initiatives.

ALLEN: We have about 15 programs that help both the business customers and the residential customers manage their energy bill. One of the fun things we started rolling out this summer is Home Energy Inspector. If you’re a residential customer, log on to our website as a customer and then take a really short quiz. We’ll send you a free energy-efficiency kit. We hope that leads you to participate in other energy-efficiency programs we offer.

We also have a program where we pull back refrigerators that can be recycled, give a little credit for that. We have a home energy audit program, as well.

For business customers, beginning about September, we started rolling out programs that help you buy down the cost of a lot of energy-efficiency measures—lighting, pumps and motors.

Finally, the green power product … we’ve offered [it] for about 10 years, but we’re up to about 1 percent of our customers that are participating. It sounds like a small number but we continue to add customers, even in these difficult economic times. If you’re an IPL customer, about 3 percent of your energy right now is coming from a wind farm as well, so everybody’s participating in some level in renewable [energy].

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Indianapolis initiatives: Many folks are familiar with the city of Indianapolis’ green efforts. They may have seen the city’s hybrid Toyotas on the road, for instance. Give us an overview of what’s next.

HALEY: First and foremost is energy-efficiency and conservation. We’re working to make city government buildings and operations as energy-efficient as possible. Our biggest project to date is the guaranteed-energy-savings project in which we’re taking 61 city-owned buildings and making them as energy-efficient as possible. That’s incorporating some renewable-energy practices, as well. While it’s nothing compared to what Ball State’s doing, the City-County Building, which is really the flagship of local government here, is going to have a geothermal heat recovery system in it by the end of the year.

We will have some renewable energy incorporated into energy-efficiency upgrades in our city buildings and operations. We are looking to green our fleet, not just by incorporating hybrid vehicles but also looking at propane-fueled vehicles, really looking to diversify (how) our fleet is powered here in Indianapolis.

We’re also making our traffic signals and street lights more energy-efficient as well. Our other areas of focus are green infrastructure, using the natural, native systems to improve storm-water quality here. With a lot of the road construction you see going on with the Rebuild Indy Project, we’re incorporating several green elements into that. We’re using porous pavement where appropriate. We actually installed the first permeable pavement alleys in St. Clair Place a few months ago. So every little step that we’re doing here in Indianapolis is something new that we’ve never seen here before and is helping improve our local environment.

We’re also encouraging more green building. The city now has an incentive program to encourage more green building here. It’s up to a 50-percent rebate on your building permit fees. So, depending on the size of your building, that could be a significant savings for you. And, again, that’s a new program that we’ve started in partnership with the Department of Code Enforcement.

Not only are city buildings becoming more energy-efficient, but those in the private sector, nonprofit sector, are also having the opportunity to become more energy-efficient.

Bike lanes—that’s a huge area of focus. If you’ve ever heard Mayor Ballard speak about bike lanes, he is very, very passionate about building a bicycling infrastructure. He sees it as a way to create a city where people want to live. Bicycling helps improve air quality, provides alternative transportation, and having the bike lanes on city streets and bike parking in high-traffic areas helps encourage more people to bicycle.

And then urban gardening has been one of our latest areas of focus. I think local food and local food production is becoming more important for many reasons. By making city vacant lots available for people to grow food on, we’re able to provide something that is not being used by the city but could be used by other people for a positive benefit.

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General Assembly: Jesse Kharbanda had the patience of Job in the last couple of years going through the Legislature with a number of ideas, including a renewable-energy standard. What are the prospects for fostering some renewable-energy legislation during this session?

KHARBANDA: We’ve been working on this for about five years. Every year, we could cite an expansion and political progress in support of a renewable electricity standard, which again is a requirement on utilities to get an increasing percentage of their power from renewable energy. So here we are, thinking that we’re at the cusp of victory. We’re the last state in the industrial Midwest to have an RES. There are 30 states that have [them]. Maybe last week, I would’ve said that we would’ve had one this session.

But I’m telling you that one of the worst possible bills for the prospects of the renewable-energy sector passed out of the Senate Utilities Committee, SB 251. And it will do an incredible amount of damage to the long-term prospects for renewable energy if it’s passed in the language that it’s in. Basically, for example, Illinois has a 25-percent by 2025 requirement for renewable energy only. What was proposed in committee is a 10-percent by 2025 goal, and that goal can be met through coal and nuclear.

Now, I’m not making commentary on coal and nuclear. But if Indiana truly wants to create a robust renewable-energy sector, that’s not the type of policy we want to have passed in our state.

And just to underscore the importance of this point, we all know that our state has almost a 10-percent unemployment rate. We’ve lost 50,000 industrial jobs between 2008 and 2009. So you would think that we would want to pass legislation in Indiana that develops something of a cluster for renewable energy because our state has the second-highest potential in the entire country for renewable-energy-component manufacturing.

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Subaru: Tom Easterday, could you describe what Subaru has done at Lafayette to make it a so-called zero-landfill plant? And was this cost- or compliance-driven?

EASTERDAY: One of the main things is to establish an environmental management system. And to do that, you need to identify all of your waste streams and then attack each of those streams to eliminate them. You really need to go back to the basics: reduce, reuse and recycle—but in that order. We’ve managed to make a profit off our environmental activities every year. It’s ranged from a $900,000 profit to a $2.6 million profit in one year of environmental stewardship activities.

I think the other thing that’s really important is to make sure that you have all levels of your organization involved in your environmental stewardship efforts. It can’t be driven by just top management telling people what to do. If you couldn’t reduce it, reuse it. If you couldn’t reuse it, recycle it. We’ve achieved a 99.9-percent recycling rate at this point and we put absolutely nothing into a landfill. We haven’t put anything into a landfill since May 4 of 2004.

So if you got up this morning and threw something into the trash, you put more into a landfill than we do as a company.

You shouldn’t just focus on zero-landfill. There’s environmental risk in putting anything into the land, into the water, and into the air. Being a lawyer, I want to eliminate all the risks, the potential legal liability. So there’s that aspect of it, too.

But I think the more green dividends you can generate, the more types of things you can do that are good for the environment but yet are a cost savings to your company, [the better]. And sometimes they have other side benefits.

IBJ: It makes for good marketing—for TV commercials and such. Have you ever quantified how much that’s worth?

EASTERDAY: Subaru of America, our national distributor, did a series of commercials about our plant back in 2007. As a result of that, we’ve had a lot of free publicity. We’ve been on five networks, had a feature article in The Wall Street Journal, one in USA Today about our plant, and they’ve estimated that from a marketing standpoint … we’ve generated over $5 million in free publicity for the Subaru brand. Being environmentally conscious has always been part of the Subaru DNA, anyway, so we knew it was the right thing to do. We didn’t do it for the publicity, but it sure helps sell cars.

IBJ: It’s often hard to find a place to take even your bottles and your paper goods to recycle. Tom Easterday, who takes your “other” things from the SIA plant?

EASTERDAY: There are a number of providers out there. We have used Heritage Interactive. It’s an Indianapolis company, and they’ve done a fantastic job for us not only in arranging for line-side pickup of our recyclable materials and sorting those, but also in helping us identify markets for difficult-to-recycle materials.

For example, glass from our light bulbs goes into garden hoses. Paint sludge that’s dried now goes into parking lot bumpers. There are a lot of vendors out there.

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Electric car infrastructure: Some folks are contemplating plug-in electric cars—the Chevy Volt, for example, or the Nissan Leaf, assuming you can find one right now. Are you getting close to putting in charging infrastructure, such as in parking garages?

ALLEN: We’re involved at IPL right now in the deployment of several charging stations. I think the first one went live [last month] and it’s at the State Office Building Parking Garage. Over the next couple of years [there could be] as many as 50 public and/or fleet vehicle charging stations.

In addition to that, to help facilitate electric vehicle deployment, we just got approval a couple of weeks ago for a new electric vehicle time-of-use rate, which will bring down the cost. Off-peak, you’ll be able to charge your vehicle for about 3 cents a kilowatt-hour. The Think [electric cars], which are currently available in the Indianapolis market—for about a dollar you can charge your vehicle. It will have about a 100-mile range.

We’re still beginning to figure out the details. But we think as many as 150 customers will be able to get those charging stations at home.

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IDEM: Tom Easterly, what are your top priorities for IDEM in 2011?

EASTERLY: Well, really they’re the same ones we’ve had since day one. We want people to have clean air to breathe. We also want the EPA to recognize that the air in Indiana is clean. Since 2008, we have met all the ambient air quality standards in Indiana. But because of a bunch of legal reasons, EPA won’t recognize that Indiana’s clean for particulate matter. We think they’ll do it during 2011. That’s very important if you want to have economic activity because, if you’re in a non-attainment area, it’s very difficult for us to issue you a permit.

Similarly, we want them to have clean water to drink. We have an excellent program in that the water from public water supplies in Indiana is 99-point-some- percent of the time always in compliance.

Our big-picture goals are to be clear, consistent and speedy to make sure that people can get permits that they need and that it’s very clear on how to get them and then they comply with those permits to protect the environment.

Our Environmental Stewardship Program—we have about 60 companies in Indiana in that program. You have to pick things you’re going to do that aren’t otherwise required that are good for the environment. We have a similar program for cities called The CLEAN Program.

We also want to finish what we started. When we came in 2005, there were huge backlogs of un-renewed permits. Now there are two, and we’re going to get those done this year. We went from having boxes of papers all over the place … we honestly couldn’t find records, to having most of our records now [online]. We’re trying to move the rest of our system electronically. All of these things have made us more efficient, have allowed us to go through these pretty significant budget crisis times and still meet our basic obligations.

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Geothermal: Dr. Gora, while Purdue University recently canceled plans for a coal-fired boiler plant, Ball State is building one of the largest geothermal systems in the country to replace its four coal boilers. Why did Ball State go this route? Is it more expensive than coal?

GORA: Our board of trustees made this decision to move away from coal-fired boilers in 2008 because we thought it was both economically and environmentally friendly. We are the largest district ground-source geothermal project in the country—maybe in the world. We’ve gotten a lot of national attention for doing this and we’re excited about the opportunity that it represents to reduce our carbon footprint by one-half.

Once we close down all four coal-fired boilers, we will reap $2 million annually in energy savings. We believe that this is the right way to go. It’s beneficial to the environment, it is beneficial to our bottom line and it made sense.

If we had decided to replace our decades-old coal-fired boilers with similar products, a lot of money would’ve been going out of the country, out of the state. The great thing about district ground-source geothermal work is that it’s all American jobs and it’s actually mostly Indiana jobs. When this project is done, there will be over 2,000 jobs that have been generated.

Right now, I think there are about 48 companies that have been working on this project and it’s even generating new industries, if you will. We’ve had the opportunity to see water well drillers become geothermal bore hole-drillers because of the opportunity that district ground-source geothermal represents.

We are heating and cooling over 45 buildings, over 600 acres. That’s what makes it a demonstration project. We haven’t found anybody in the world that has done this [scale].

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Jobs: What other opportunities are we missing to make money and create jobs from improving the environment?

KHARBANDA: Thematically, we’re very interested in advancing policy that both protects the environment as well as promotes jobs. Another segment of the energy economy that we’re very excited about is what’s called distributed generation. It’s the opportunity to generate power on-site through the installation of solar panels and wind turbines. There’s a different set of policy that would promote that segment of the renewable energy power sector … something called Property Assessed Clean Energy Bonds, also known as PACE.

Twenty-three states have passed it. We haven’t. The good news is that we have sponsors for this type of legislation in both the House and in the Senate. What is the basic idea? Most homeowners, most business owners, would love to install solar panels or wind turbines. But the problem is, they don’t have the money. PACE allows localities to issue bonds, and the proceeds from those bonds can then be used to provide low-interest loans that are paid back over a 20-year period as an assessment on your property tax bill.

Again, I hate to report some bad news here, but a couple of weeks ago, the bill was gutted and the most important aspect of Property Assessed Clean Energy Bonds—the bonding authority—was stripped out of the bill.

ALLEN: One of the things that we’re doing right now is actually offering up to $4,000 of incentives to customers, small customers primarily, who want to install renewable energy systems. The idea is that we are able to buy down those systems. Jesse’s right—it’s an opportunity to create jobs. There’s a lot of human resource involved in that sort of thing.

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Curbside recycling: Karen, with all the talk about Indianapolis being a green city, what about basic curbside recycling?

HALEY: Well, there actually is curbside recycling here in Indianapolis. It’s a subscription service that you can get by calling the city. They’ll put you in touch with who that provider is for your area. It’s about $6 per month. I think one of the misconceptions with curbside recycling is, you look at other cities and people think it’s free. Well, it’s free in that you might not get a separate bill for it but somehow you’re paying for it in your property taxes or in your trash bill or in some other mechanism.

We also have made significant improvements here in pedestrian recycling. As [you] walk down the streets on Mass Ave and in Broad Ripple, there are places where you can dispose of plastic and glass bottles. Also, on Georgia Street, which is one of the big street projects that’s going on through the Rebuild Indy Program and also as a part of the Super Bowl, there’s going to be pedestrian recycling bins, as well.

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Alternative vehicles: Electric cars are, you could argue, a moot point here in the Midwest, to the extent that the power plants here are mainly relying on coal. What’s a car-loving tree-hugger to do?

EASTERDAY: PZEV vehicles—partial zero-emission vehicles—are very good if you aren’t going totally to the electric. I think other alternatives are out there as far as zero-emission vehicles—certainly electric [vehicles]. There are natural gas vehicles being developed. Subaru has an electric vehicle in Japan right now. Hybrids certainly are something that I think are going to be with us for a long time.

ALLEN: We actually can bundle green power with the customers who are buying the electric vehicles so that we go out and source renewable energy specifically if you are concerned about the fact that a lot of our generation does come from coal-fired [plants]. So there’s a way to kind of bundle that and mitigate the impact and kind of put that issue to rest, too.

KHARBANDA: On this issue, it’s certainly true that the environmental footprint of coal has been reduced over time and certainly IDEM deserves credit for that piece. But first of all, of course, there are significant environmental impacts with coal that continue to be very, very problematic.

It was released a couple of weeks ago that Indiana has the fifth-largest amount of mercury emissions in the country. That’s on an absolute basis, and that’s going to be largely attributed to coal. I believe that we have the largest volume of coal ash in the country.

You know, a real cautionary tale is the Edwardsport IGCC plant in southwestern Indiana. The initial cost of that plant was $1.3 billion, then $1.6 billion, then $1.9 billion, and now it is $2.88 billion.

We have abundant coal resources in Indiana, there’s no question about that. But it’s going to become increasingly expensive and we can’t continue to identify our state as a coal state because we have an abundant amount of renewable-energy resources throughout the northern two-thirds of Indiana and a number of other resources like geothermal or biomass and so forth.•