Danielle McGrath: Power companies are looking out for reliability, customers

Summer is here, and Indiana’s electric utilities are powering assembly lines and keeping homes cool on the hottest of days. For more than a century, reliability of service has been our ultimate obligation. That priority will never change.

A recent guest column in this publication highlighted Indiana’s success with attracting new industries like data centers and battery and chip manufacturers to the state and the critical role of energy companies in serving their needs. The Indiana Energy Association knows the stakes are high, and we welcome continuing conversations with business groups such as the Indiana Chamber of Commerce to demonstrate that careful planning goes into meeting new power demands. Indiana is one of the most manufacturing-intensive states in the nation, and for decades we have worked with industries looking to locate or grow in Indiana. Consequently, behind every one of these economic development wins is a utility success story.

Indiana has a robust electric and natural gas transmission system, available energy capacity, supportive energy policy and land availability. A diversity of power generation—from natural gas and coal-fired power to renewables and nuclear—serves Hoosiers today. And while today’s system has adequate capacity and reserves, the addition of any large customer—especially data centers, which often require renewable energy—is done with reliability of service for all our customers in mind.

Rigorous protections ensure the reliability of Indiana’s power supplies. On a regular basis, Indiana’s major electric providers submit plans to state utility regulators outlining how they will meet projected power demands. State regulators hold twice-yearly public briefings with the utilities on their readiness, and they can open an investigation if they have concerns about utility power generation.

The Indiana Legislature also has taken a leadership position on the issue of reliability and acted. Following an extensive series of public meetings and hearings, legislation was passed, including requirements that limit how much utilities can rely on the capacity market for their planned power needs. This is unique nationally and encourages self-reliance as a state for power generation. The Legislature also codified into law Indiana’s continuing policy that state regulatory decisions concerning Indiana’s electric power generation and service must take into account critical priorities such as reliability and affordability.

Regional transmission organizations also oversee the power markets. One of those organizations, the Midcontinent Independent System Operator, or MISO, is responsible for most of Indiana. MISO and utilities coordinate planning and monitor the need for additional generation. That partnership has been an advantage for Hoosiers, helping to lower costs and providing reliable wholesale energy for nearly two decades now.

Simply put, all of Indiana’s major utilities are planning for new power generation. Meanwhile, we also are assessing existing power resources in light of changing, far-reaching federal environmental regulations.

As an example, while the U.S. Environmental Protection Agency’s recent greenhouse gas rules have been in the headlines, separate existing rules kick in soon that cover areas such as thermal impacts on rivers where power plants are located. In some cases, those rules can amount to investments of hundreds of millions of dollars in aging infrastructure—costs that are passed along to customers. That is a challenging business case to justify for 50-plus-year-old coal-fired power plants when there are alternative choices for more efficient generation that can add greater capacity to the system.

Indiana’s utilities have teams of experts in power planning, energy markets, plant operations and environmental regulations who are all dedicated to this issue. Further, we have been part of the state’s economic success for more than a century, and we plan to work with our state’s leaders to rise to the challenge of meeting our future energy needs.•

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McGrath is president of the Indiana Energy Association, a not-for-profit that represents 14 investor-owned electric and natural gas companies.