10 Energy Policy Takeaways from Indiana’s busy Legislative Session

A view of the Indiana Statehouse looking west from Market Street
The Indiana Statehouse in Indianapolis. Photo by Daniel Schwen / Creative Commons

The dust has settled from Indiana’s legislative session, but the drama over state energy policy is not over.

What happens next will be hashed out in rate cases, the courts, and a newly reactivated energy task force — one of the session’s key energy outcomes.

Below are 10 takeaways from one of the state’s busiest energy-related legislative sessions in recent times.

“It’s ground zero in Indiana in respect to energy,” said Citizens Action Coalition Executive Director Kerwin Olson. “Who knows where this crazy train is going.”

1. The energy task force is back

Clean energy advocates were not happy with the first iteration of the state’s energy task force, arguing that it focused too much on promoting the baseload value of coal-fired power. But they are pleased that legislation passed to renew the task force with a focus on electric vehicles, distributed generation, energy storage and other clean energy goals.

2. Utilities have a new tool to refinance costs from retiring coal plants

Coal plant securitization is an increasingly popular tool that allows refinancing coal plant debt to reduce the burden on ratepayers. SB 386, creating a pilot program in the state, became law after important amendments sought by clean energy and consumer advocates, including one that guarantees the tool will only be used when it creates savings for consumers.

3. Cities and counties won’t be able to require electric heat in new buildings

HB 1191, known as “ban the ban,” prohibits municipalities and counties from passing mandates that new construction have electric rather than natural gas heat and hot water. The Hoosier Environmental Council had called on Gov. Eric Holcomb to veto the bill after its passage, to no avail.

“This is a big deal,” said council Executive Director Jesse Kharbanda. “The power sector is decarbonizing, the transportation sector is going to reach a point of significant decarbonization, but the building sector will really lag behind those two. It depends on city government to use longstanding tools to be able to cut carbon” — but the law prevents cities from doing so. “The handcuffs are on cities and counties if they want to stipulate that all new privately owned buildings need to have rooftop solar or green roofs or anything to do with energy efficiency.”

Olson said that he’s disappointed HB 1191 passed, but he doesn’t think it will prevent increasing electrification in the future. He noted that almost a third of Indiana homes already use electricity for heat, and entire developments have long been built with electricity instead of natural gas for heat, stoves and hot water. “It’s not the nail in the coffin of electrification,” he said.

4. Net metering’s phase-out and ongoing rate cases spell trouble for rooftop solar

At least three bills that would have extended net metering beyond its phase-out next year never even got hearings. Olson and other renewable advocates were disappointed that three bills to extend net metering —two introduced by Republicans — were never heard by the legislature.

Net metering effectively ends next year in Indiana thanks to a law passed in 2017, and a recent rate case involving utility Centerpoint Energy (formerly Vectren) creates a dismal outlook for rooftop solar. The Indiana Utility Regulatory Commission decided that the utility can calculate the credit customers get for energy contributed to the grid on an instantaneous basis, rather than the monthly basis that Citizens Action Coalition, the state’s own Office of Utility Consumer Counselor and solar groups had argued for in the bitterly contested case. Under the commission’s decision, customers will essentially only get credited for solar energy sent to the grid at the exact moments when they are producing more energy than they consume.

“That was a big loss,” Olson said of the commission’s decision. “In our view, there’s no netting with instantaneous netting. This will really dampen the rooftop solar industry.”

The state’s four other major utilities will be filing their own rate cases this year, and they will likely seek instantaneous net metering as well, Olson predicted. The utility NIPSCO has already changed its request from monthly net metering to instantaneous net metering. Groups including the Indiana Distributed Energy Alliance, United Solar Neighbors and Citizens Action Coalition are challenging the commission’s decision in court.

5. Solar installers will be sprinting to sign up customers this year

Zach Schalk, Indiana program director for Solar United Neighbors, which organizes solar group buys, said the organization is hoping to help as many residents as possible get solar within the next year. That will allow the group to beat the phase-out and lock in net metering for 10 years. “For people on the fence, there really is no time like the present,” Schalk said. “A sense of urgency is warranted.”

Laura Ann Arnold, president of the Indiana Distributed Energy Alliance, echoed that sentiment. “Given the handwriting on the wall, folks are out there hustling,” she said. “If there are any projects they’ve been working on, they’re trying to tell people, now is the time — you’ve got to get moving.”

6. Government and nonprofit organizations now have few options for solar

Arnold said that government and nonprofit institutions are particularly hurt by the end of net metering, since they can’t leverage tax incentives and Indiana does not allow third-party ownership that in other states is used to pass on such credits. She said that instead of trying for net metering legislation yet again, solar advocates might prefer to focus on allowing third-party ownership. “We have members saying, ‘Let’s go for the real prize,’” legalizing third-party ownership, rather than fighting a losing battle for net metering, Arnold said.

7. Storage could play a growing role for customers who can afford it

Arnold also said people might turn to solar systems with batteries, to keep all the energy they generate for themselves, if net metering isn’t worthwhile. “What utilities don’t seem to understand is with this kind of policy you’re forcing people who have the financial resources and wherewithal to install batteries,” she said. “At some point, there’s a stick-it-to-the-man-type attitude that says, ‘If you aren’t going to treat me fairly, I’m just going to go off the grid — na, na, na, na!’ We have a lot of independent-minded people in Indiana who think that way. It’s not all granola-eating, Birkenstock-wearing hippies in Bloomington who are going solar.”

8. Utility-scale solar is still going strong

Arnold noted that even as NIPSCO is discouraging residents from getting solar through its net metering plans, it has put out requests for proposals for utility-scale solar. Utility-scale solar generally has a bright outlook in Indiana, ranking 20th nationwide for installed capacity with more projects in the works. Indiana has among the most solar projects waiting in the MISO queue for approval, though notorious delays in processing have caused projects across MISO to be withdrawn.

Renewable advocates were disappointed in the legislature’s failure to pass HB 1381, which would have created uniform siting standards and made it harder for local governments to pass more restrictive measures on things like setbacks, decommissioning, turbine measurements and drainage issues. While developers generally crave the predictability that uniform statewide standards provide, utility-scale solar development will likely continue to blossom anyway.

“Indiana has strong wind and solar resources and a good location that makes it relatively easy to deliver electricity to much of the eastern U.S.,” said John Billingsley, founder, chair and CEO at Tri Global Energy. The company recently announced plans to sell a 400-megawatt solar farm it is developing in the state. “We have found great land resources and an entrepreneurial spirit in White County and in other areas of Indiana,” Billingsley said. “We know this project will pay benefits locally for decades to come.”

9. There’s still no plan for improving coal ash storage

The Hoosier Environmental Council is upset that Sen. Mark Messmer, a Republican and chair of the environmental committee, declined to hold a hearing on a bipartisan bill that would have forced companies to more safely store coal ash, including moving it from unlined into lined pits. Indiana has the country’s largest number of coal ash repositories.

“Indiana is dramatically trailing other conservative states like North and South Carolina in dealing with the risks to our drinking water resources from unlined coal ash waste pits,” said Kharbanda, of the Hoosier Environmental Council. “In those states, the utility companies are excavating their coal ash from these waste pits and moving the toxic ash to lined landfills. In Indiana, with the Indiana Department of Environmental Management’s consent, the utilities are generally keeping their millions of tons of coal ash in place, even though the coal ash is leaching toxins into groundwater resources and the waste pits are in floodplains.”

10. Community organizing and public input matters

Kharbanda said that despite significant disappointments, he felt the session showcased the importance of community organizing and public input. This was seen in amendments made to certain bills, the failure of measures hostile to mass transit, and the weakening of a prominent bill to gut wetlands protections, which doesn’t relate directly to energy but underscores support for sustainability.

“It was a very tough session, a session in which the influence of special interests and hard-line ideologues was very pronounced, but despite that backdrop we were able to secure several victories,” Kharbanda said. “It speaks to the ongoing significance of grassroots organizing and coalition-building, which is a very important message to keep relaying to the public. There’s a lot of discouragement out there around why does Indiana seem so resistant to supporting rooftop solar, to facilitating climate action. We make an effort to communicate to the public that these victories exemplify the value of staying engaged.”

This article first appeared on Energy News Network and is republished here under a Creative Commons license.

Correction: A prominent bill to gut wetland protections was weakened but not defeated. An earlier version of this story incorrectly described the legislation’s status.

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