The Journal Gazette
Wednesday, December 02, 2015 12:55 am

Is the state losing its edge on power rates?

In the most recent CNBC business-climate survey, Indiana was rated 13th overall, but No. 1 on the low cost of doing business.

Yet the recovery still stutters along in Indiana. What part of "economic development" aren’t we getting?

Indiana Industrial Energy Consumers, Inc., which represents 26 of the state’s largest industries, has an answer to that.

The state’s industrial electric rates, once among the nation’s lowest, have been rising.

"The advantage we’ve had with low-cost coal has really evaporated," said Jennifer Wheeler Terry, an Indianapolis attorney whose firm represents the IIEC. "Indiana was fifth (lowest) 10â years ago. Now it’s 26th overall in industrial electric prices."

"It’s causing companies to make tough decisions on locating, investing and expanding," added Miriam Dant, who lobbies for the industrial energy group.

Dant and Terry talked with us while they were in Fort Wayne visiting the General Motors plant. Together, GM and the energy group’s other 25 industries employ 55,000 Hoosiers.

The massive energy costs of those companies are on a vastly different scale from those of individual consumers. But many of the changes the IIEC wants would also benefit the average Hoosier.

Indiana’s residential and commercial electricity rates, though still below the national average, have also been rising. I&M’s rates are below the state’s averages.

IIEC would like to see the state put the brakes on utility increases by requiring more regular review of overall rates and putting less emphasis on "trackers" that allow utilities to recover different types of costs separately, which penalizes average consumers as well.

The industrial group wants to see Indiana, heavily dependent on coal, seek more diversity, and argues that the state should loosen rules that discourage industries from developing or purchasing alternative energy.

IIEC would like to see its members empowered to pursue co-generation – simultaneous production of thermal and electrical energy, an issue that will be addressed by a legislative study committee.

In fact, the IIEC’s agenda sounds similar to those of consumer groups.

"For the most part, we share common ground," said Kerwin Olson, executive director of Citizens Action Coalition.

For instance, he said, the industrial group’s concerns about being able to remain on the utility grid while generating alternative power is reminiscent of the fight over solar generation for homes.

"We absolutely agree that customers should be allowed to generate power," he said. "It’s just on a very different scale."

Though it’s possible for the interests of industrial customers and those of individuals and small businesses to diverge – rules shouldn’t be structured to reduce the rates for big companies at the expense of individuals – the IIEC and those who speak for the consumers might consider approaching the legislature as allies. 

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