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State Chamber study looks at future of energy in Indiana  

Control over siting of wind and solar farms in Indiana is at the local level leading to a diverse set of requirements for developers to meet. The study cites this as a hurdle for Indiana developing renewables and recommends a balance of state guidelines and local control.

Credit:  Don Knight | The Herald Bulletin | December 10, 2020 | www.heraldbulletin.com ~~

ANDERSON – An energy study commissioned by the Indiana Chamber identified five paths forward in planning for the state’s future energy needs.

“The good news is that our system isn’t broken and we hope to tweak it in a good way and gain some of our competitive advantage back,” said Greg Ellis, vice president of energy and environmental policy for the Indiana Chamber of Commerce.

“In the end I think that that will be good for not just the business but residential consumers as well,” Ellis said.

The Chamber was prompted to commission the study after hearing from members about rising energy costs that moved Indiana from one of the cheapest states for energy to the middle of the pack.

In 2019 Indiana ranked 28th for electricity prices down from 13th in 2010 as prices rose 2.9% each year according to the study by London Economics International.

“I think a lot of it was what we expected,” Ellis said talking about the study’s findings. “Indiana forever had the energy advantage as far coal was concerned. Coal prices were cheap so our electric generation fuel source was mainly coal … that gave us a competitive advantage over our neighbors and a lot of states around the country.”

The rise of fracking made cleaner burning natural gas cheaper. Neighboring competing states use a lot of natural gas for power generation, closing the gap on Indiana’s cost advantage.

The state has also seen a large shift away from coal which accounted for 93% of generation in 2009 down to 59% in 2019.

Another 7.7 gigawatts of coal is expected to be retired by 2028, being replaced by gas, wind and solar.

“I think people are going to walk away from it (coal) over the next 10, 20 years,” said Greg Winkler, director of economic development and strategy for the city of Anderson. “I think you are going to see the U.S. and the world as a whole slowly move out of fossil fuels into things that are considered renewables.”

Anderson Utilities is part of the Indiana Municipal Power Agency, which has four solar parks in Madison County including two in Anderson providing 10% of the city’s power needs.

IMPA has plans for three more solar parks around Anderson that have been put on hold due to the pandemic.

Wildcat Wind Farm has 125 turbines in northwest Madison County and Tipton County.

While Indiana has lost its competitive advantage with its neighbors, it’s still considerably cheaper than the coastal states, Winkler said.

“East or West Coast you’re going to pay more than twice what our rates are now. If you’re anywhere in the middle part of the country then we are very much middle of the pack,” Winkler said.

While competing against Georgia for NTN and NTK the city found itself at a disadvantage because of power demand charges.

The charges are based on a commercial customer’s peak demand and are used to ensure the utility has the infrastructure to meet that demand when necessary.

“Oftentimes that demand charge will be as much as your actual utility bill,” Winkler said. “That’s the thing that hurts us.”

The city uses an electric power abatement that diminishes over time to reduce the cost.

The competing site in Georgia didn’t have power demand charges since the utilities carry excess power on their lines above what their customers need due to an abundance of cheap hydroelectric power from the Tennessee Valley Authority.

Control over siting of wind and solar farms in Indiana is at the local level leading to a diverse set of requirements for developers to meet. The study cites this as a hurdle for Indiana developing renewables and recommends a balance of state guidelines and local control.

“We had a large wind company that said, look, we’re not going to invest in Indiana anymore until this gets resolved,” Ellis said.

Winkler thinks the Legislature will be hesitant to take control of renewable siting but the lower cost of renewables will continue to drive their development.

“The market is always going to win, the market will dictate no matter what government does,” Winkler said.

While energy costs in the state have risen, the study expects them to level off while prices in surrounding states are expected to rise, restoring some of Indiana’s competitive advantage.

“Utilities did a good job of updating their infrastructure,” Ellis said.

Those updates did push up energy prices but the study found the states surrounding Indiana have not made the same investments.

“Our prices should plateau and the surrounding states are going to have to make these investments that we’ve already done so their prices are going to increase, so we should gain some of our competitive advantage back,” Ellis said.

Source:  Don Knight | The Herald Bulletin | December 10, 2020 | www.heraldbulletin.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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