Businesses Form Renewable Energy Association


(posted Feb 26)

Laura Arnold started the Indiana Renewable Energy Association to help small businesses have a legislative voice about the renewable energy business. Although the month old organization is still considered an unincorporated association, the group closely watches renewable electric legislation. The group is not considered a lobbying group. "Individual member companies have been communicating with state legislators," Arnold said.

The renewable electric standard would require utilities to use alternative energies like wind, bio-mass and solar to offset some of its reliance on coal to power the utility plants.

Arnold has been watching energy bills slowly die off with HB 1117 surviving. She said it is a much weaker bill than 1102 to generate electricity with renewable energy resources. She was disappointed to see clean coal included as renewable energy since it will diminish the total percentage for using solar and wind. She said utility consumer advocates are opposed to 1117 because of the tracker mechanisms that allow utilities to instigate rate changes without having to go through the formal IURC proceedings. The trackers were created by the Indiana General Assembly during the 1970 oil embargo. They were designed to allow utilities to recover certain costs without a going through a complete rate case procedure.

Jack Wickes, Jr., executive director of the Indiana Industrial Energy Consumers, Inc., said the legislature is working on two or three new trackers this year that will allow the utilities to recover money from consumers more quickly. He said it is an inequitable system for the consumer. He estimated that trackers, not including the fuel adjustment clauses, have passed $2 billion onto the consumer to recover costs. He called HB 1117 a "hostile bill" for consumers because it contains trackers and acts as a rapid payment plan for plant equipment.

Wickes has also followed the Speedway Utility Management's petition for alternative regulatory practices. He did not consider it a tracker but it allows the IURC to acquiesce its jurisdictional regulatory powers to the utility if the consumer agrees with the arrangement. If this happens, the Allison Transmission no longer has a recourse to complain about potential rate hikes by the utility company.

IURC Public information Officer Mary Beth Fisher said there are all different types of trackers, depending upon the utility industry. "The tracker is misunderstood by a lot of people," she said. Statutory powers create trackers for utilities to use. Trackers do not bypass the regulatory process altogether, the utility has to prove to the IURC that recovering the cost through rate increases is justified and reasonable. The process is reviewed but not the extent of a full blown rate case hearing.

The IURC takes a "neutral position" on trackers because commission is there to serve the state legislators.

In a September 12, 2007 report to the Regulatory Flexibility Committee of the General Assembly, IURC Chairman David Lott Hardy discussed rate effects of environmental trackers on the consumer. "Except for Duke, through 2006, base rates have not increased in the past five years, trackers have increased the rates paid by the Indiana customers."

Arnold would also like to see Indiana improve its net metering and interconnection for consumers to provide electric power to the grid. Net metering allows a consumer to sell its excess energy back to the grid and requires an interconnection fee for systems over 10 kilowatts. It also requires the consumer to carry $100,000 liability insurance.

"Changes in the net metering rules are needed to make it easier for consumers to sell excess electricity back into the grid. Currently only residential customers and K-12 schools fall under the IURC's current net metering guidelines. That means commercial and industrial customers are not covered under the net metering rules. The report entitled Freeing the Grid ranks the 50 states on their net metering and interconnection rules. The State of Indiana gets a "D" in both categories."

David Johnston of IURC Electricity Division said IPL's annual report indicated five customers are on the net metering plan.