IURC Issues Order 1/15/14 to look at continuing to require large customers to “opt out” of DSM

Posted by Laura Arnold  /   January 16, 2014  /   Posted in Indiana Utility Regulatory Commission (IURC), Uncategorized  /   No Comments

The Indiana Utility Regulatory Commission (IURC) issued an order in a new docket concerning Demand Side Management (DSM) on 1/15/2014.

Click here to download >>44441 IURC Orderon DSM issued 2014-01-15

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 qp&iifying 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.




  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.
  3. This Order shall be effective on and after the date of its approval.

This order was issued the day before the Senate Utilities Committee of the Indiana General Assembly scheduled a hearing on SB 340 to allow industrial customers to opt out of DSM activities.

The committee hearing on SB 340 adjourned after nearly 3 hours of public testimony. No vote was taken so the issue will continue to be discussed.

An amendment was also offered. Contact Laura.Arnold@IndianaDG.net or call (317) 635-1701 for more details.

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