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What’s Likely To Replace Indiana’s Energy Efficiency Program

Energy auditor Mike Bass changes a light bulb in a Columbus home as part of the Energizing Indiana program.

After Indiana’s energy efficiency program Energizing Indiana is eliminated at the end of the year, lawmakers plan to consider whether to implement an alternative program or continue without a state mandate.

The legislature won’t debate the issue until the next legislative session in January, but the public debate is already unfolding.

At a recent rally on the statehouse steps, about 75 Hoosiers gathered to show their support for implementing a renewable energy mandate as a part of the state’s energy policy.

Holding small plastic wind turbines and solar panels, they chanted “What do we want? Solar power!”

They also emphasized they want Energizing Indiana, or a similar program, reinstated.

“In all honesty, it’s much more affordable to invest in insulation than it is to invest in solar power, but really it’s a one-two punch,” says Ryan Zaricki, the founder of the Evansville-based solar panel company Whole Sun Designs. “First become efficient with the energy you use and second power the remainder of the energy you use with greener renewable sources. It really just makes sense.”

Energizing Indiana has been a cost-effective program, according recent report from the Indiana Utility Regulatory Commission. On average it saved $3 for every one dollar spent.

Here are how the numbers break down:

Energizing Indiana Savings Per Dollar (2012-2013)

Commercial & Industrial Incentive: $5.49
Residential Lighting: $3.03
School Energy Efficiency Kit: $2.42
School Building Assessments: $1.21
Home Energy Audit: $1.10
Average: $3.02

The Role of Home and Business Energy Audits

So why did legislators vote earlier this year to eliminate the program?

To understand that, we need to first explain what Energizing Indiana entails.

On a recent weekday, Mike Bass, a field supervisor for Energizing Indiana, is inspecting Dawn Andrew’s Columbus home. He’s spelling out some simple ways she can reduce her energy consumption.

Turn the thermostat down in the winter when you’re not home for example or replace incandescent light bulbs with fluorescents or LEDs.

“We’re not going to tell you to replace windows or replace your heating and air system, we’re going to look for ways that are low cost, no cost and it can make a pretty significant difference just on doing those items,” Bass says when asked about the solutions he provides homeowners.

On average, the savings is about $100 per year, which is attractive to Andrews.

“My husband and I both are small business owners and we have a large family so anything we do to save money is great for us,” Andrews says.

Energizing Indiana also provides these kinds of audits for businesses, and they are all free. They are one measure utility companies have been using to meet the state’s 2 percent annual energy savings goal. [pullquote]If you look at the way utilities plan to meet the need of their customers in the future…this becomes the most cost effective technique.
-Mark Maassel[/pullquote]

But meeting that goal was getting more difficult and more expensive.

“I found that it was an inexpensive program to start when it was changing light bulbs and wrapping pipes and simple measures such as that to save energy,” says Sen. Jim Merritt, R-Indianapolis. “When you look at the second four years, 2015-2019, those simple measures just aren’t there.”

Merritt and utility company officials say that expense was also hurting residential and business customers, especially large industrial manufacturers that use a lot of energy.

That’s because utility companies are allowed to recover the cost of the audits through a fee on utility customers’ monthly energy bills.

They are also allowed to charge fees for new power plants and other up-front costs to producing new energy, which is why even without Energizing Indiana, utility companies plan to continue many of the energy efficiency programs such as energy audits.

“If you look at the way utilities plan to meet the need of their customers in the future, and they look at how to do that, this becomes the most cost effective technique in a number of different cases,” says Mark Maassel, the president of the Indiana Energy Association, which represents Indiana’s five largest investor-owned utilities.

What Utility Companies Are Proposing

But consumer advocates like Kerwin Olson say, right now, the lack of a statewide mandate largely puts utility companies in the driver’s seat.

He points out that the proposals the utility companies recently submitted to the Indiana Utility Regulatory Commission allocate a lot less money for those programs than before and achieve about half of the energy savings that would have been saved under the state energy mandate. [pullquote]The scales are fully tilted toward the utility companies.
– Kerwin Olson[/pullquote]

“The scales are fully tilted toward the utility companies in what the law allows them to do and what the commission requires them to do,” Olson says.

Utility companies don’t have the final say though. That’s left up to the Indiana Utility Regulatory Commission and state lawmakers who are gearing up to decide what Indiana’s energy policy should look like.

So while legislators could decide to re-implement an energy efficiency mandate, they could also just allow the IURC to approve utility companies’ plans.

Maassel says he would recommend doing so about every three years. But he also expects the discussion about energy efficiency will continue past the next legislative session.

“There are individuals that believe cost effectiveness is not a criteria. I disagree with that personally,” he says. “I believe our industry disagrees with it. As long as we have that fundamental question of is this something that serves customers but is in a way that is in their best interest–is cost effective–as long as that issue remains; I think there will always be the discussion of is there enough energy efficiency or not.”

Governor Mike Pence is reviewing the Indiana Utility Regulatory Commission’s recommendations for energy efficiency programs and plans to work with legislators to establish a new energy plan next year.

The governor has repeatedly said he advocates for an “all of the above” strategy when it comes to Indiana’s energy policy and he recently specified that that includes energy efficiency.

Want to contact your legislators about an issue that matters to you? Find out how to contact your senators and member of Congress here.

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