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Report: Former Energy Efficiency Program Was Cost Effective

Energizing Indiana provided about $3 in savings for every one dollar spent, before it was eliminated earlier this year.

changing light bulb

Photo: U.S. Navy (Flickr)

Energize Indiana provided incentives for individuals and businesses to be more energy efficient.

A new report indicates the state’s energy efficiency program legislators eliminated earlier this year was cost effective, saving about $3 for every one dollar spent.

The Indiana Utility Regulatory Commission report shows the biggest payback from Energizing Indiana, as the program was called, was in rebates given to commercial and industrial businesses that upgraded to energy efficiency equipment.

For every one dollar in rebate, the companies saved more than $5 in electricity costs.

Citizens Action Coalition Executive Director Kerwin Olson says numbers like that show Indiana should restart the program—or something similar that benefits both the consumer and utility companies.

“The Citizens Action Coalition believes the best path forward with that is the establishment of a public purpose charge that removes the disincentive for utilities to invest in efficiency, captures those costs from the public and those go directly to an independent administrator to run and oversee those programs and leave the utilities to what they do best and that is generate and sell electricity,” he says.

But Indianapolis Republican State Senator Jim Merritt, who authored the bill scrapping Energizing Indiana, says he stands by his decision.

He says funding to run the program was expected to double and that cost would have been passed on to ratepayers—even if they weren’t using the program.

“It was obvious that changing lightbulbs and wrapping pipes can just take you so far in efficiency and after that you start looking at refrigerators and big devices such as that that cost a lot of money and would be bourn, socialized by the entire rate base, and those that would not be participating with new refrigerators would bear the burden,” Merritt says.

The Indiana Utility Regulatory Commission is scheduled to present the findings of its report at a legislative study committee next month. The committee is then expected to provide its recommendations to the full legislature next year.

Gretchen Frazee

Gretchen Frazee is a reporter/producer for WFIU and WTIU news. Prior to her current role, Frazee worked as the associate online content coordinator for WFIU/WTIU. She graduated from the University of Missouri-Columbia where she studied multimedia journalism and anthropology. You can follow her on Twitter @gretchenfrazee.

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  • Bob Eckert

    If they would just work with Whirlpool or GE (both have frig manufacturing plants in Indiana and would benefit by the extra sales) and pay half of the cost of a new energy-efficient fridge or electric water heater (a real energy waster) I would buy new right away, but as it is I can’t because of the high cost of the appliances that are also very energy efficient. That type of aid would benefit those companies, Indiana taxpayers, the utility company and me.

  • btownmoon

    Refrigerators are highly efficient due to government standards. The Whirlpool factory in Evansville closed in 2010 and the GE plant in Bloomington is in the process of closing.

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