Updated: April 18, 2013 6:14AM
The Indiana General Assembly is considering legislation that will help bring low-cost natural gas to rural areas, provide electricity discounts for certain large businesses that expand in Indiana, and update utility regulation. Indiana Senate Bill 560 would also establish an orderly process for review and recovery of costs associated with utility infrastructure.
Energy consumers are understandably concerned about rising utility rates. So is the utility industry. Indiana depends heavily on coal-fired electric generation because it produces inexpensive and reliable power for our citizens. Unfortunately, the federal government has launched an attack on coal with an increasing number of new strict environmental regulations. Complying with these regulations is a key reason Indiana electric rates are increasing.
At the same time, utilities must replace and update our aging energy infrastructure, the wires and pipes that bring electricity and natural gas to our homes and businesses. Much of this infrastructure is at, or nearing, the end of its normal life cycle. Replacement isn’t an option, it’s a necessity. Our challenge is to manage these issues while doing as little harm as possible to Hoosiers’ pocketbooks. SB560 is designed to help do that by establishing an orderly process for reviewing future utility infrastructure investments.
Here is how it would work. A utility could propose a seven-year infrastructure plan to the Indiana Utility Regulatory Commission (IURC). The commission would hold a public hearing where interested parties, including consumer groups, could voice their opinion of the plan and suggest changes. If, after hearing from affected parties, the IURC finds the plan reasonable, it could approve it.
At various points during the seven-year plan, the utility could petition the IURC for recovery of the costs incurred so far. At that time, the utility must provide specific detailed information about the infrastructure investments, and the IURC, the Office of the Utility Consumer Counsel (OUCC) and consumer groups would have “one more bite at the apple” to make sure that the utility’s costs align with the approved plan. Importantly, the bill contains provisions that were added to address customer concerns. One very significant change is the requirement that a utility file for a general rate case sometime during the seven-year plan period. This was a strong recommendation by both industry and citizen customer groups who believe that all utilities’ rates and charges should be reviewed on a regular basis.
SB560 will help assure that we have power 24/7, 365 days a year. It will put Hoosiers to work to build critical energy infrastructure. And it maintains the IURC’s very important oversight role to make sure this is done in a cost-effective manner.
President, Indiana Energy