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Court stops Indiana law giving utilities dibs on interstate power lines, may affect Hoosiers' bills

By Rebecca Thiele

Posted December 11, 2024

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A photo of power lines near an airport at dusk.

A federal court recently blocked an Indiana law that allows state utilities to get dibs on interstate power line projects — saying it violates interstate commerce laws. (Abigail Ruhman/IPB News)

Who gets to build and own the power lines that cross Indiana’s borders could affect Hoosiers’ electric bills. The U.S. needs a lot of those interstate power lines to connect renewable energy sources and help the country meet its current climate goals.

The cost to build them eventually gets passed on to utility customers.

A federal court recently blocked an Indiana law that allows state utilities to get dibs on interstate power line projects — saying it violates interstate commerce laws.

It ruled in favor of a LSP Transmission Holdings II, LLC — a Missouri transmission company — which said the law would make it unable to compete for the projects, missing out on billions of dollars in profits.

Lawmakers passed a law allowing Indiana investor-owned utilities "right of first refusal" last year. The utilities have said they can ensure those interstate power lines are built well, respond to disasters faster and save Hoosiers money.

But consumer advocates like the Citizens Action Coalition disagree. Executive Director Kerwin Olson said competition brings prices down.

“This is a good day for utility consumers in Indiana. I mean, HB 1420 was inherently an anti-consumer bill and anti-free market bill that further exposed customers in Indiana to monopoly pricing," he said.

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According to InsideClimateNews, both consumer advocates and utilities have commissioned studies to show that right of first refusal laws do or do not save customers money. However, a lead economist cited in both studies said competition helps to control costs.

The Midcontinent Independent System Operator (MISO) is the electric grid operator for the central U.S. and parts of Canada. It said it will decide which companies will build those lines in Indiana sometime next year.

State utilities could still appeal the ruling. The Indiana Energy Association, which represents utilities, said it doesn’t comment on pending litigation, but that it stands by the Indiana law.

Similar laws were passed in at least 11 other states: Texas, Michigan, Minnesota, Iowa, Montana, Nebraska, Oklahoma, Mississippi, Alabama, North Dakota and South Dakota.

Rebecca is our energy and environment reporter. Contact her at rthiele@iu.edu or follow her on Twitter at @beckythiele.