Indiana Governor Mike Pence: Allows SEA 340 to become law; Calls for new direction on energy efficiency in Indiana

Posted by Laura Arnold  /   March 28, 2014  /   Posted in 2014 Indiana General Assembly, Indiana Utility Regulatory Commission (IURC)  /   No Comments

Governor Mike Pence

FOR IMMEDIATE RELEASE March 27, 2014

Contact: Kara Brooks, kbrooks@gov.in.gov                                                                                                                                    

 

GOVERNOR PENCE CALLS FOR NEW DIRECTION ON ENERGY EFFICIENCY IN INDIANA

Seeks recommendations for energy efficiency program in 2015

 

Indianapolis — In announcing his intention to allow SEA 340 to become law without his signature, Governor Pence issued the following statement:

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[Editor's Note: Governor Pence was not in Indianapolis last when this statement was released by his office. Instead he was  participating  in the First Annual Forbes Reinventing America Summit at JW Marriott in Chicago.

A Government of Growth: Politics and Policy that Foster Innovation
So what is the role of government in all this? How can Washington and the states create policies that allow the new industrial revolution to thrive? Our panelists will debate the right—and wrong—strategies for fostering innovation.

A. Paul Alivisatos, Ph.D., Director, Lawrence Berkeley National Laboratory
The Honorable James S. Gilmore III, President & Chief Executive Officer, AmericanOpportunity.org; Governor, State of Virginia 1998-2002
The Honorable Michael Pence, Governor, State of Indiana
The Honorable Rick Snyder, Governor, State of Michigan
The Honorable Thomas Vilsack, Secretary, U.S. Department of Agriculture

Moderator: Steve Forbes, Chairman & Editor-in-Chief, Forbes Media
Floor Moderator: Dan Bigman, Managing Editor, Forbes Media

It would interesting to obtain a copy of Governor Pence's prepared remarks.]

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“Low-cost energy is an essential element of Indiana’s economic development and prosperity. The simple fact is that higher energy costs will cost Indiana jobs.  By reducing our need for electricity, we reduce our need to build expensive power plants at a cost to Hoosier ratepayers. For this reason, I believe that energy efficiency is an important part of our ‘all of the above’ energy strategy.

 

“As such, I was disappointed that the General Assembly chose to eliminate the energy efficiency program established by the previous administration without offering a viable alternative. For that reason, I have declined to sign this bill and acknowledge that this bill will become law without my signature.

 

“I could not sign this bill because it does away with a worthwhile energy efficiency program. I could not veto this bill because doing so would increase the cost of utilities for Hoosier ratepayers and make Indiana less competitive by denying relief to large electricity consumers, including our state’s manufacturing base.

 

“To ensure that Indiana’s energy policy continues to include sound efficiency programs that lower electricity usage and support economic growth, I am calling on the Indiana Utility Regulatory Commission to immediately begin to develop recommendations for a new energy efficiency program that would include an opt-out for large electricity consumers.

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 [Editor's Note: The Indiana Utility Regulatory Commission (IURC) already opened an investigation Cause No. 44441 on 01/15/14 to address this issue.

44441 Order creating DSM Opt-out Docket dated 2014-01-15

An excerpt is below:

On December 9, 2009, the Indiana Utility Regulatory Commission ("Commission") issued its Phase II Order in Cause No. 42693 ("Phase II Order") wherein it found, among other things, that demand side management ("DSM") must be available to all customer classes to ensure that every Indiana energy consumer has the opportunity to benefit from energy cost reductions that can be achieved through energy efficiency improvements. Phase II Order at 29. Consequently, the Commission established annual energy savings goals for all jurisdictional electric utilities designed to meet an overall goal of 2% annual cost-effective DSM savings within ten years. Id at 30-31. The energy savings goals, while not mandates, were established to ensure all DSM opportunities for all customer classes were fully pursued. We explained that such a broad approach should help ensure that significant reservoirs of untapped cost-effective energy efficiency potential were not omitted from consideration. Id at 30. Nonetheless, the Commission specifically indicated that it was not foreclosing possible consideration of opt-out provisions at some future date. Id

On February 27,2013, the Commission issued an Order initiating an investigation in Cause No. 44310 to consider "whether to pursue the adoption of a 'structured' self-direct DSM program for certain large customers. Specifically, whether the DSM expense allocated to certain large customers for Core and Core Plus Programs should be utilized to fund a self-direct DSM program whereby these quaifying customers may access the funds, or receive credits, to complete defined energy efficiency projects that are subject to evaluation, measurement and verification." (Order at 1). In
establishing the procedural schedule for the investigation, the Presiding Officers' March 28,2013 Docket Entry specifically provided that, "related issues, such as opt-out programs and the energy savings goals established in Cause No. 42693, will not be addressed .... "

Now further informed by the various positions of the parties in the Cause No. 44310, and concerned that the efforts which would be required to effectuate a structured self-direct DSM program after an order establishing the reasonable parameters for such an offering would not be insignificant, the Commission is persuaded that administrative efficiency is best served by more fully exploring alternative solutions beyond the stated purpose of that proceeding. Although we remain convinced that cost-effective DSM offerings must be available to all customer classes and market segments, we recognize that economic drivers outside the present model may serve as powerful
incentives toward that objective. Therefore, we open this investigation to undertake a critical review on the continued reasonableness of certain large customer participation in utility sponsored and Commission regulated DSM programs. This investigation will occur on an expedited basis to ensure continued implementation of the Phase II Order requirements for the submission of three-year DSM plans by the regulated electric utilities and the continued offering of Core Programs. The investigation will also consider any associated and necessary revisions to the energy savings goals
established in the Phase II Order.

...

IT IS THEREFORE ORDERED BY THE INDIANA UTILITY REGULATORY
COMMISSION that:
1. An investigation is hereby commenced to allow the Commission to consider and
review the reasonableness of continuing to require the participation of certain large customers in utility sponsored and Commission regulated DSM programs and any associated impacts on the energy savings goals established in the Phase II Order.
2. A Preliminary Hearing and Prehearing Conference to establish a procedural schedule is set for February 3, 2014 at 9:30 a.m. local time in Room 222 of the PNC Center, 101 West Washington Street, Indianapolis, Indiana.

Editor's Note: So why does Pence say:  "I am calling on the Indiana Utility Regulatory Commission to immediately begin to develop recommendations for a new energy efficiency program that would include an opt-out for large electricity consumers." Wasn't the IURC already doing that?]

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“In addition, I have informed leaders of the General Assembly of my actions and my intention to bring energy efficiency legislation during the 2015 legislative session. I look forward to working with legislators to develop a new energy efficiency program for our state that will encourage conservation and promote a strong Indiana economy.”

 

 

 

Christy Denault

Communications Director

Office of Governor Mike Pence

cdenault@gov.in.gov

317/233-9997 (Office)

317/775-1170 (Cell)

 

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