Utility watchdog: Ending efficiency program ‘short-sighted’

The leader of a consumer watchdog group said Tuesday that Indiana lawmakers put the state at a disadvantage when they passed a bill killing an energy-efficiency program that could have helped the state meet the new federal carbon-emission goal by 2030.

Lawmakers approved a bill in March that will halt the state's fledging Energizing Indiana program on Dec. 31, ending its energy-saving efforts, such as low-income home weatherizations.

Citizens Action Coalition executive director Kerwin Olson said lawmakers were "short-sighted" in light of Monday's announcement by the U.S. Environmental Protection Agency, which said coal-dependent Indiana has three years to come up with a plan to cut carbon dioxide emissions by 20 percent over the next 16 years as part of a sweeping national push to combat global warming. Energy-efficiency programs are among the tools states can use to reach their carbon-reduction goal.

"We kind of shot ourselves in the foot here in Indiana by eliminating these programs. It was a short-sighted decision and more so now that we've seen these carbon rules that would allow efficiency programs to be used as a tool to meet these goals," Olson said.

Although Gov. Mike Pence said in March he was disappointed lawmakers killed the program without offering a replacement, he nonetheless allowed the law to take effect. The Republican governor said he would propose an alternative program for lawmakers to consider next year.

Indiana's five largest electric utilities have all filed proposals outlining energy-efficiency programs they hope to implement after the Energizing Indiana program ends. The plans by Duke Energy, Vectren, Indiana Michigan Power, Northern Indiana Public Service Co. and Indianapolis Power & Light need the Indiana Utility Regulatory Commission's approval.

IURC spokeswoman Danielle McGrath said the commission will consider those plans as it drafts recommendations that Pence had requested for a successor to the Energizing Indiana program. The panel is also working to prepare an assessment for lawmakers by Aug. 15 on Indiana's efficiency programs — findings that could factor in legislation next session.

The IURC is also accepting public input until Monday on Indiana's future energy-efficiency programs.

"So there are kind of three different tracks going on, but all under that same umbrella," McGrath said.

Energizing Indiana, which began in 2012, has saved enough energy to power nearly 93,000 Indiana homes, according to its website. Its goal was achieving a 2-percent annual savings in total electric sales by 2019.

Supporters, including businesses and environmental groups, said it has employed hundreds of workers and saved money for consumers who receive free in-home energy audits. But Indiana's manufacturing and utility interests argued the program, financed through a fee on monthly electricity bills, had proven too costly and industrial users saw few benefits.

Sen. Jim Merritt, R-Indianapolis, who wrote the bill that eventually was rewritten into legislation that eliminated the program, said Energizing Indiana had cost ratepayers $500 million since 2009 and would have cost as much as $1.9 billion more by 2019.

Duke Energy is Indiana's largest electric utility, with about 800,000 customers in 69 of Indiana's 92 counties. Spokesman Lew Middleton said Duke Energy's energy-efficiency proposal would restore programs it offered to its customers from 1991 until the Energizing Indiana program began.

"Instead of mandated targets what we're doing is simply saying to our customers, 'We've got this portfolio of energy-efficiency programs we can offer and we encourage you to take advantage of those — you can save energy and save money," he said.

Olson, of the Citizens Action Coalition, said the utilities' plans are "not bad" but all but one of them would cover only a single year. He said the consumer watchdog group would prefer utilities offer 3-year programs.