Move away from coal could be slowed under Indiana bill
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The planned retirement of numerous, large coal-fired generating units around Indiana could be slowed under a bill that would require electric utilities to ask state regulators for permission before they shut them down.
State Rep. Cindy Ledbetter, R-Evansville, introduced the bill this month, saying utilities are moving too fast to retire and replace generating capacity.
“Indiana has been warned that our electrical grid is stressed,” she told IBJ. “Currently our state requires not only existing generation, but we’re going to need to add more generating capacity to support the significant economic development opportunities in Indiana.”
The Indiana coal lobby is hailing the bill as a good step to keep the grid from potentially failing. But environmental and consumer groups say it would favor fossil fuels and slow Indiana’s transition to clean renewable energy.
House Bill 1382 would give the Indiana Utility Regulatory Commission the authority to approve or deny the retirement of an electric generating unit and would require electric utilities to demonstrate the retirement would result in cost savings to customers.
Ledbetter denied the bill is meant to prop up Indiana’s coal industry, which once counted on electric utilities for a huge part of their business, only to see it dwindle over the past decade as the utilities have converted their plants to natural gas or renewable energy, such as solar and wind power.
“This isn’t a bill to save the coal industry,” Ledbetter said. “… I’m not a very big proponent of coal and never have been. But I also see the common sense of how we cannot move forward in our state, keep adding all this green energy, then try to electrify our vehicles. We’re going to have to realize that we have to stop and ensure we have reliability and resiliency in our grid.”
Regional grid operators have warned that growing consumer demand for electricity, a large number of severe storms and aging transmission equipment could pose risks to the grid.
But some consumer groups point out that Indiana utilities are already required to update long-term generating plans every three years with state regulators to indicate retirement of units and construction of new units. As part of the process, utilities meet with customer groups, regional grid operators and state regulators.
“There’s a long process that utilities must undertake before they retire a coal plant, because the retirement is contingent upon approval of new resources,” said Kerwin Olson, executive director of Citizens Action Coalition of Indiana. “This bill sort of ignores the fact that there is already a process in place.”
The Hoosier Environmental Council said the bill would slow Indiana’s transition away from coal, a dirty fossil fuel, to greener energy sources. It placed HB 1382 on its “bill watch.”
“Besides adding an unnecessary burden to the Indiana Utility Regulatory Commission, this bill encourages our public utilities to keep their current energy generation sources running as long as possible, which are majority fossil fuels,” the council said on its website.
But the group representing Indiana’s coal industry, Reliable Energy Inc., said the bill is a “commonsense approach” to ensuring that energy is readily and consistently available.
“The electric grid that Hoosiers depend on to heat and power their homes and businesses is under unprecedented strain,” Matt Bell, CEO of Reliable Energy, said in an email to IBJ. “… Today, as we endure the arctic blast that has enveloped the nation, Americans are being instructed to conserve energy so that the grid does not fail.”
The bill was assigned to the House Utilities, Energy and Telecommunications Committee but has not been scheduled for a hearing, raising questions about its future in this year’s short legislative session. The deadline for bills to get passed out of the full House is Feb. 5.
Neither Rep. Ed Soliday, R-Valparaiso, the committee chair, nor House Speaker Todd Huston, returned calls to IBJ to comment on the bill.
Ledbetter said she hopes the bill will get a hearing, but she has not spoken to Soliday. She is not a member of the utilities committee.
The legislation appears similar to a law that went into last year in Kentucky that prevents the retirement of coal-fired power plants unless a utility convinces state regulators that retiring a unit will result in higher costs for customers and will maintain or improve the reliability and resilience of the grid.
Ledbetter said Indiana state regulators currently don’t have authority to prevent the closure of a power plant, although they conduct hearings and hand down orders on new power plants.
“There’s not the same formal process in place to determine if the closing or retiring of a generating unit or a power plant is in the best interest of Indiana or the ratepayer,” she said.
Several Indiana utilities have announced in recent years they plan to retire coal-fired units. Indianapolis-based AES Indiana said in 2022 it wants to convert two remaining coal-fired units at its huge Petersburg power plant to natural gas by 2025 and add up to 1,300 megawatts of wind, solar and storage by 2027.
Major corporations, including Indiana’s Eli Lilly and Co. and Cummins Inc., have said they want to sharply cut their carbon footprint and are putting pressure on energy providers to ramp up capacity.
The Indiana Energy Association, the lobbying group for the state’s large electric utilities, did not return a call and an email to IBJ.