Contested state utilities bill passes Indiana House of Reps.

A bill allowing Indiana utility companies to pass federally required costs on to consumers passed the Indiana House of Representatives 62 to 34 April 21 and awaits action by the Senate.

Senate Bill 251 would require the Indiana Utility Regulatory Commission to allow utility companies to defer 80 percent of some federally mandated costs by raising utility rates for customers. The remaining 20 percent of the costs would be paid for by the utility companies.

The federally mandated costs companies can pass on to consumers include complying with environmental laws, energy efficiency standards, participating in industry reliability organizations and transmission and pipeline safety costs. Utilities can also petition to be reimbursed for costs not listed in the bill.

Who Sponsors the bill: Senators Beverly Gard, R-Greenfield; James Merritt, R-Indianapolis; Brandt Hershman, R-Wheatfield ; and Phil Boots, R-Crawfordsville. Representatives Jack Lutz, R-Anderson, and Robert Behning, R-Indianapolis are also sponsors.

The Pros: The General Assembly’s motivations for the bill include Indiana’s growing population and demand for more utility energy sources, attracting businesses and creating jobs and specifically citing economic benefits for southern Indiana given its coal resources. The Indiana General Assembly also cited public interest to increase in-state power capacity. The bill was designed to encourage coal gasification, also referred to as clean coal technology.

The Cons: SB 251 came under fire earlier this year after Japan’s tsunami-induced nuclear plant radiation leaks occured. The bill’s original version included clean energy financial incentives to utility companies building nuclear power plants. That provision was later eliminated. However, nuclear utilities would still benefit from the bill’s provisions if they are passing along costs responsible for maintaining and updating nuclear facilities.

The Citizens Action Coalition has been against the bill since it began making its way through the General Assembly.

“These investor-owned utilities are state-franchised monopolies sheltered from risk and market forces,” said Grant Smith, executive director at CAC in a press release. “To reward these corporations with extra profit for doing absolutely nothing is completely disgusting.”