Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowEarly reaction was mostly positive Thursday to a Senate GOP priority bill that seeks to increase oversight of water withdrawal projects within Indiana.
Bill author Sen. Eric Koch, R-Bedford, said Senate Bill 4 intends to add “some regulatory oversight on high volume water transfers”—a move that comes amid an ongoing debate over a pipeline to pump water from an aquifer in Tippecanoe County to a mammoth industrial campus in Boone County.
The current draft of Koch’s measure would specifically require a utility or large private sector project leader to obtain an approval permit from Indiana’s Department of Natural Resources before carrying out a project where significant amounts of water are moved from one water basin in the state to another.
A second permit process outlined in the bill would loop in Indiana’s Utility Regulatory Commission “for all large, long-haul water pipelines.”
Entities that receive permits would have to request recertification every few years to ensure compliance, according to the bill.
Koch emphasized that the “foundation” of the bill is that regulations are “built upon” the state’s 10 natural watersheds, “rather than artificial boundaries, such as county lines and municipal barriers.”
The senator further maintained that the Lebanon project, called the Limitless Exploration/Advanced Pace Research and Innovation District, or LEAP, “is an example of what we’re trying to work on, but it’s not the reason” for the legislation.
“This isn’t about LEAP. It’s about the next LEAP, and it’s about being proactive,” Koch told reporters Thursday after his bill was heard by the Senate utilities panel. “This isn’t about the past. This doesn’t undo LEAP. It’s not meant to undo LEAP—and it won’t undo LEAP.”
Even so, Koch’s bill—and another filed by GOP Sen. Spencer Deery, R-West Lafayette—appears to signal an appetite within the supermajority caucus to make Indiana’s water management policies more robust.
Deery’s proposal, Senate Bill 256, would separately create a two-year legislative task force to study water regulation and put a moratorium on Wabash River pipeline projects in the meantime. That bill was also assigned to the utilities committee but has not yet been scheduled for a hearing.
Koch, who chairs the utilities committee, pointed to recent statewide studies—conducted as part of the LEAP project’s planning—which so far show that “Indiana has plenty of water.” But he made clear that high-volume transfers like LEAP “are going to get some sets of eyes and some regulatory oversight that they haven’t had before.”
“We’re not going to have a shortage, so long as it’s properly managed. And so, that’s the premise. We work from naturally created watersheds, and we realize that sometimes development occurs where water does not exist,” Koch continued. “This bill attempts to find the right balance between future needs and future supplies.”
Utilities, citizens groups express approval
The water oversight bill was heard by the Senate committee Thursday but was not put to a vote. Koch said he anticipates the bill will be amended and advance to the Senate chamber in the coming weeks.
Expected updates to the bill’s permitting language will require the review process to also focus on “the impact of a long-haul water pipeline on customer rates,” Koch noted.
He said, too, that a forthcoming amendment will allow the IURC and DNR to employ third-party consultants “in an advisory capacity”—as long as there’s no conflict of interest—and that the consultants’ fees would be paid for by the water project applicant.
Representatives from the Indiana Chamber of Commerce, Indiana Manufacturers Association and the American Council of Engineering Companies of Indiana testified in favor of the bill.
Bridget O’Connor, government affairs director for Citizens Energy Group, said the central Indiana utility also supports the proposal.
Although plans for a hotly debated long-haul pipeline—stretching 40 miles between Lafayette and Lebanon—appear to be on hold, the state has already approved funding to help underwrite an extension of Citizens’ system that would provide additional water to Lebanon.
The Citizens project—which is expected to boost an additional 25 million gallons daily to the city—would include new water mains, booster stations and tanks, plus treatment plant upgrades.
“We understand the desire, as detailed in Senate Bill 4, to add safeguards which will ensure the movement of water is managed in a way that supports the water needs of the future, while protecting those that currently rely on the resource,” O’Connor said.
She added, however, that regulating transfers could create “unique” challenges for providers like Citizens. Because of its “expansive” regional territory, the utility “constantly” moves water in and out of multiple basins “on a regular and constant basis.”
“We do not believe the goal is to regulate those normal operations,” O’Connor told lawmakers. “While we believe certain exemptions are necessary to protect the utilities’ day-to-day operations, we believe Senate Bill 4 is a reasonable step forward to ensure that all stakeholders continue to have ample water supplies to facilitate growth and economic development.”
Citizens’ current LEAP project plans would not be subjected to the permitting process established by Koch’s bill.
Kerwin Olson with the Citizens Action Coalition, a utility-focused customer advocacy group, told legislators that some might view that grandfathered approval as “a total and complete exemption for the LEAP project,” but he doesn’t share that interpretation.
“It could be read as sort of an exclusive gift to Citizens as the sole provider … I don’t necessarily read it that way,” Olson said. “I’ve already gotten a few chatters in my ears about that language.”
Olson said his group is working on recommended tweaks to the bill’s language that could help quash concerns about what exceptions would be afforded to Citizens.
Other recommended bill changes
Indiana DNR deputy director Chris Smith said the state agency additionally has “no issues with the goal or purpose of the bill.” Smith offered lawmakers a handful of recommendations, though, to help with implementation of the permitting program.
For example, the bill currently lacks specific criteria for DNR officials to use when making a determination on a permit application, or how to handle permit transfers from one party to another, Smith said.
“Is that water then just locked up in perpetuity, no longer available?” Smith asked.
The LEAP district in Lebanon was pitched by state leaders as a sort of technology park and future industry location for massive projects, such as a semiconductor chip plant. Thus far, the largest announced tenant at the Boone County site is Eli Lilly, which will be investing over $13 billion in research and manufacturing projects.
Lawmakers and groups have expressed concerns that the area didn’t have enough water to attract high-consumption businesses, such as data centers.
The Indiana Economic Development Corp., tasked with attracting new state investors and companies, oversaw water feasibility research before additional studies were moved to the Indiana Finance Authority.
The two most recently published studies from the state predicted that water availability will continue to outpace demand for the vital resource in coming decades, but both analyses urged stakeholders to consider more conservation measures to protect future supply.
Please enable JavaScript to view this content.