The EPA announced Monday a plan to reduce carbon dioxide emissions nationwide 32 percent by 2030.
The rules would also require Indiana cut its carbon emissions in that same time period one of two ways: 1) reduce its total carbon emissions 28 percent or 2) reduce its emissions per megawatt hour of electricity produced by 38 percent.
Utility companies have said the requirements will make electricity rates increase because of the investments companies will have to make in new technologies.
So, we have to pay more for electricity?
"The answer is it's too soon to say," says Ken Richards, an environmental economics professor at Indiana University.
Watch Indiana Newsdesk's explanation of the EPA's Clean Power Plan
The EPA proposed its preliminary rule to reduce carbon emissions last year. During the comment period that followed the announcement, utility companies created projections that showed electricity cost increases from 1 percent to 14 percent.
But a lot changed with the EPA's final version, and utility companies haven't had time to make updated projections.
Historically, Indiana's utility rates have been low. The state has the 18th lowest electricity rates in the nation, according to the Indiana Energy Association.
But rates have been rising in recent years.
"[The rates] have come up in the last decade or so as utilities have made changes, not the least of which is complying with the various EPA regulations," says Indiana Energy Association President Mark Maassel.
Environmental groups blame the lack of diversity in Indiana's energy supply.
"Those bills are going up because we're overly dependent on coal," says Jodi Perras, the Sierra Club's Indiana representative.
How Energy Efficiency Factors In
Another factor to consider when determining whether the EPA's plan will cost consumers more money, is energy efficiency.
The EPA's plan includes incentives for states to invest in energy efficiency. States will be able to count drops in demand for electricity toward their 2030 targets.
"Even when the price goes up, when people have more access to energy efficient technologies, then their overall bill will go down," Richards says.
In other words, if the cost of electricity is higher, but you use less of it, you're still saving money.
"Due to these improvements, the Clean Power Plan will save the average American nearly $85 on their energy bill in 2030, and save consumers a total of $155 billion through 2020-2030," the EPA says on its website.
The question is what would energy efficiency look like in Indiana.
Lawmakers recently voted to end the state's energy efficiency program, Energizing Indiana, saying it was going to become too costly.
Now, instead of having a statewide energy efficiency target, utility companies are being told to come up with their own energy efficiency plans and submit them to the state for approval.
Listen to more about the EPA's plan and how it will impact Indiana on Noon Edition.
