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NIPSCO asks Indiana Utility Regulatory Commission for another general rate increase

A NIPSCO lineman works on installing high-voltage power lines near a new substation just off Bingo Lake, in St. John. It is part of an extensive electric modernization project underway for two years at the utility, which will increase reliability for customers.

NIPSCO asks state regulators for rate hike

Keith Benman keith.benman@nwi.com, (219) 933-3326

NIPSCO has filed a rate-hike request with state regulators that proposes increasing a typical residential customer's electric bill by 11.5 percent.

The increase would pay for increased costs and a variety of improvements made by the utility since its last rate hike in 2012, including $95 million in distribution upgrades and a $90 million meter replacement program, according to NIPSCO chief executive Violet Sistovaris.

"Our proposal works to strike the right balance of cost and service, so that we can provide the level of service customers expect," Sistovaris said on Thursday.

For residential customers, much of the increase would come from increasing the fixed $11 customer charge that appears on every customer's bill to $20, according to testimony filed in the case.

The Citizen's Action Coalition immediately decried that aspect of the increase, saying it means those who use less energy will actually see a bigger percentage increase in their bills.

“When you increase fixed costs like that, you are actually increasing charges more for low-volume users, who are usually the elderly or the poor,” said Kerwin Olson, Citizens Action Coalition executive director. “So that is incredibly inequitable to vulnerable populations.”

NIPSCO spokesman Nick Meyer said the increase in the fixed customer charge will cover utility costs that stay the same year after year with little fluctuation. He said customers with low energy use are not necessarily low-income, so the effect will not be inequitable.

NIPSCO also wants to implement a summer electric bill assistance program for low-income customers similar to the winter home heating aid programs it already operates.

NIPSCO's request was filed Thursday afternoon with the Indiana Utility Regulatory Commission, which will now schedule proceedings in the case. NIPSCO expects a ruling by August 2016.

The Indiana Utility Regulatory Commission proceedings will include a public field hearing in Northwest Indiana as well as testimony by NIPSCO and consumer groups in front of the commission in Indianapolis. The commission can ultimately grant NIPSCO's request, amend the request, or reject it.

NIPSCO has 460,000 electric customers spread across 32 counties in northern Indiana. It also has 810,000 natural gas customers. Natural gas bills would not be affected by NIPSCO's request.

Sistovaris on Thursday confirmed the utility also plans to file a request by the end of this year for a bill surcharge to pay for a seven-year modernization program for its electric distribution system. If the commission grants the utility's request, customers would also see that charge added to their bills within a year.

Under NIPSCO's Thursday request, a typical residential customer using 700 kilowatts of electricity per month would see their bill increase to $102.16 from the current $91.63, making for a $10.53 increase. NIPSCO has established a Web page where customers can calculate the impact on their individual bill at NIPSCO.com/rates.

The average increase for commercial and small industrial customers would be between 7 and 9 percent, according to NIPSCO. Larger industrial customers would see a blended average increase on the order of 7 percent, although the impact on each would be determined by what rates they utilize, Sistovaris said.

NIPSCO residential bills have increased 29 percent during the last decade, according to the most recent bill survey by the Indiana Utility Regulatory Commission. That is the the smallest increase among the state's five large, investor-owned utilities. But NIPSCO charges remain the second highest among those five.

The last increase in NIPSCO base rates approved by the commission at the end of 2011 hiked a typical residential customer's bill by 4.5 percent. That was followed by a subsequent 3 percent increase due to the costs of an energy conservation program.

In addition to the distribution and meter replacement programs, NIPSCO also wants to recoup its operating costs for federally mandated pollution control equipment installed at generating stations since the last rate case.

NIPSCO bill hikes

Here are the bill changes a typical NIPSCO residential customer has experienced in the last five years. The 2012 increase was due mainly to an increase in basic rates, but the others were due to increases in surcharges called "trackers" that pay for special projects and other costs. NIPSCO has had the smallest bill increases of any of Indiana's five, large investor-owned utilities during the past 10 years, according to the Indiana Utility Regulatory Commission's annual bill survey.

2011: $80.29

2012: $85.02

2013: $88.17

2014: $91.79

2015: $91.63

Source: NIPSCO

IndianaDG Editor's Note: This is likely not to be the only rate increase request NIPSCO makes this year. NIPSCO also intend to file another TDSIC case in December of 2015.

NYT Paul Krugman: Enemies of the Sun

Posted by Laura Arnold / October 05, 2015 / Posted in solar, wind / No Comments

But here’s the thing: by the standards of today’s Republican Party, the Cheney report was enlightened, even left-leaning. One whole chapter was devoted to conservation, another to renewable energy. By contrast, recent speeches by Jeb Bush and Marco Rubio — still the most likely Republican presidential nominees — barely address either topic. When it comes to energy policy, the G.O.P. has become fossilized. That is, it’s fossil fuels, and only fossil fuels, all the way.

And that’s a remarkable development, because while it’s true that fracking has led to a boom in U.S. gas and oil production, we’re also living in an era of spectacular progress in wind and solar energy. Why has the right become so hostile to technologies that look more and more like the wave of the future?

Before I try to answer that question, a few facts about renewable energy.

Wind and solar used to have a reputation as hippie-dippy stuff, not part of any serious approach to our energy future, and many people still have that perception. But it’s way out of date. The cost of wind power has dropped sharply – 30 percent in just the past five years, according to the International Energy Agency.

And solar panels are becoming cheaper and more efficient at a startling rate, reminiscent of the progress in microchips that underlies the information technology revolution. As a result, renewables account for essentially all recent growth in electricity generation capacity in advanced countries.

Furthermore, renewables have become major industries in their own right, employing several hundred thousand people in the United States. Employment in the solar industry alone now exceeds the number of coal miners, and solar is adding jobs even as coal declines.

So you might expect people like Mr. Rubio, who says he wants to “unleash our energy potential,” and Mr. Bush, who says he wants to “unleash the Energy Revolution,” to embrace wind and solar as engines of jobs and growth. But they don’t. Indeed, they’re less open-minded than Dick Cheney, which is quite an accomplishment. Why?

Part of the answer is surely that promotion of renewable energy is linked in many people’s minds with attempts to limit climate change — and climate denial has become a key part of conservative identity. The truth is that climate impact isn’t the only cost of burning fossil fuels, that fossil-fuel-associated pollutants like particulates and ozone inflict huge, measurable damage and are major reasons to support alternative energy. Furthermore, renewables are getting close to being cost-competitive even in the absence of special incentives (and don’t forget that oil and gas have long been subsidized by the tax code.) But the association with climate science evokes visceral hostility on the right.

Beyond that, you need to follow the money. We used to say that the G.O.P. was the party of Big Energy, but these days it would be more accurate to say that it’s the party of Old Energy. In the 2014 election cycle the oil and gas industry gave 87 percent of its political contributions to Republicans; for coal mining the figure was 96, that’s right, 96 percent. Meanwhile, alternative energy went 56 percent for Democrats.

And Old Energy is engaged in a systematic effort to blacken the image of renewable energy, one that closely resembles the way it has supported “experts” willing to help create a cloud of doubt about climate science. An example: Earlier this year Newsweek published an op-ed article purporting to show that the true cost of wind power was much higher than it seems. But it turned out that the article contained major factual errors, and its author had failed to disclose that he was the Charles W. Koch professor at Utah State, and a fellow of a Koch- and ExxonMobil-backed think tank.

It’s unlikely, I guess, that energy policy will play as big a role as other issues, such as tax policy, in the 2016 election. But to the extent it does, you need to know what’s really at stake.

While politicians on the right may talk about encouraging innovation and promoting an energy revolution, they’re actually defenders of the energy status quo, part of a movement trying to block anything that might disrupt the reign of fossil fuels.

WSJ: Vegas Casinos Fight to Buy Their Own Electricity

Posted by Laura Arnold / October 05, 2015 / Posted in Uncategorized / No Comments

MGM, Sands and Wynn—the three companies challenging NV Energy—account for more than 5% of the utility’s electricity sales. PHOTO:BLOOMBERG NEWS

Vegas Casinos Fight to Buy Their Own Electricity

MGM, Sands and Wynn push for right to tap wholesale electricity, sidestepping Nevada power monopoly

CASSANDRA SWEET

Oct. 4, 2015 7:00 p.m. ET

52 COMMENTS

Three big casino companies that run glittering resorts on the Las Vegas Strip are trying to break free from Nevada’s electric power monopoly, NV Energy.

Hoteliers including Wynn Resorts Ltd., MGM Resorts International and Las Vegas Sands Corp., which operate more than a dozen massive gambling palaces in Nevada, say they could cut millions of dollars from their electric bills if they could buy power directly from solar farms or power-plant owners.

But NV Energy, which is owned by Warren Buffett’s Berkshire Hathaway Inc., is pushing state regulators to make it very expensive for the casinos to stop buying its power, according to documents released by the state’s Public Utilities Commission. NV Energy declined to comment.

The same struggle is occurring across the country as large power users watch wholesale energy prices fall while their utility bills rise. New York, Texas and 11 other states allow residents and businesses to buy their electricity from competitive suppliers, but Nevada is among the majority of states that require most customers to buy power from monopoly utilities.

The fight is particularly acute in Vegas, where keeping the bright lights of the Strip shining—and creating permanent daylight indoors so the gambling never stops—requires a lot of juice.

Data from MGM Resorts International show that its Las Vegas properties, including the Bellagio and Mandalay Bay, use more electricity than Key West, Fla., a tourist destination with more than 2.5 million visitors each year. According to the commission, the three casino owners challenging the power utility account for more than 5% of the electricity sales of NV Energy, which generates power and also buys it from other companies.

The casinos say they would like to use more renewable energy to live up to commitments they have made to shareholders and customers. Many other large companies, including Wal-Mart Stores Inc. and General Motors Co., have joined together to push for better access to renewables but say some utilities are charging too high a premium for it.

Casinos say that is part of what is going on in Nevada. After Berkshire bought NV Energy in December 2013, the utility signed long-term contracts to buy solar power for as little as 3.9 cents a kilowatt-hour from First Solar Inc. and SunPower Corp., according to documents NV Energy filed in July with the state regulatory commission. Wholesale conventional power is even cheaper, going for an average of 3.5 cents a kilowatt-hour at a hub in southern California, where Nevada gets some of its power. That is down 34% from 2014, and 57% below 2008 prices, according to data from Intercontinental Exchange Inc.

The company charges the casinos and other big commercial clients between nine and 10 cents a kilowatt-hour for a mix of conventional and renewable power, according to the casinos, utility documents and data from the U.S. Energy Department.

Matt Maddox, president of Wynn Resorts, calls the markups excessive.

Wynn could cut its power costs by as much as 40%, or $7 million a year, by purchasing electricity directly from energy suppliers, Mr. Maddox said, adding he can’t see why the resort should be forced to buy power from NV Energy when the utility is doing little to keep costs down for its consumers.

“They are over-earning and not passing on savings,” he said.

Las Vegas Sands wants to buy more renewable power as part of an effort to cut its energy use and be more environmentally responsible, but the company can’t reach its goals without more buying options, said Rob Goldstein, the company’s president and chief operating officer.

MGM declined to comment.

So far, state regulators are taking the utility’s side. Despite a 2001 law that allows large energy users to switch power suppliers, the Public Utilities Commission of Nevada has never granted customers permission to leave the Las Vegas utility.

A commission spokesman declined to comment. But when a large data-storage company tried to leave the utility last year, regulators said that the departure of a big customer was unacceptable because other customers’ bills would rise sharply to make up for the loss of revenue.

In the current case, the commission has proposed that the casinos together pay about $130 million—$90 million for MGM, $24 million for Sands and $17 million for Wynn—in one-time fees to the utility to cover the costs that the commission staff fears would otherwise fall on remaining customers. The casinos plan to continue to pay the utility fees for transmitting the power they buy.

The casinos say that sum—which represents years of electricity bills—would make it too expensive for them to leave.

The Public Utilities Commission of Nevada is expected to make a decision by December.

Meanwhile, Sands and MGM are already generating electricity from rooftop solar panels at their properties. The ones atop MGM’s Mandalay Bay hotel and convention center supply as much as 20% of the complex’s electricity. Las Vegas Sands said solar panels at its Palazzo Resort provide a small portion of the hotel’s electricity, while a separate array heats water used in the building’s swimming pools and spas.

Wynn said it is considering installing panels at its resorts.

Write to Cassandra Sweet at cassandra.sweet@wsj.com

ACEEE: Ohio study committee gets it wrong on energy efficiency targets

Posted by Laura Arnold / October 03, 2015 / Posted in Uncategorized / No Comments

Ohio study committee gets it wrong on energy efficiency targets

Blog | October 02, 2015 - 2:46 pm

By Maggie Molina, Utilities, State, and Local Policy Director

On Wednesday, a group of Ohio policymakers released their recommendations to indefinitely freeze the state's clean energy and energy efficiency targets. Their misinformed recommendations, if implemented, would once again deliver a major setback to Ohio energy bill payers and the state's clean energy economy.

A cost-benefit analysis that ignores the benefits

The group, the Energy Mandates Study Committee—a special committee created in SB 310 to specifically examine cost-benefits of the energy efficiency resource standard (and renewable portfolio standard)—gets several things wrong about energy efficiency. First, while the committee’s initial task was to complete a cost-benefit analysis, the study includes absolutely no analysis of the benefits from investments in energy efficiency. They only look at the costs. ACEEE examined the benefits of energy efficiency in Ohio back in 2012, and found that continuing Ohio’s efficiency targets could save customers almost $5.6 billion in avoided energy expenditures, reduced wholesale energy prices, and capacity prices. And utilities in Ohio have extensively analyzed the costs and benefits of energy efficiency. By not basing their recommendations on an actual cost-benefit analysis of energy efficiency, the committee's study is shockingly incomplete.

Incentives alone are not enough to achieve high savings for Ohio

Ironically, the committee seems to recognize the value of efficiency, stating in their report that "the Study Committee does see great value in continuing with energy efficiency so that Ohio ratepayers will pay less for electricity and the state will use less electricity overall." But the committee then goes on to recommend voluntary programs and energy incentives for utilities to invest in efficiency instead of targets. Again, the committee fails to look at the evidence in developing their recommendation.

Yes, energy efficiency performance incentives for utilities are an effective tool if structured well (as we recently examined in ACEEE’s Beyond Carrots for Utilities report). However, the tools by themselves have been far less successful than specific energy efficiency targets at driving high levels of efficiency, as I wrote in a paper earlier this year, Policies Matter: Creating an Energy-Efficient Utility of the Future.

Utility energy efficiency performance incentives deliver the most savings for energy-bill payers when aligned with long-term, concrete targets, such as those in the original Ohio legislation. Without the targets, customers are vulnerable to large swings in program offerings and the resulting benefits, and the business community faces uncertainty in the state's commitment to invest in energy efficiency.

The results from voluntary programs in other states have not been promising. In 2014, all of the top 18 electricity-saving states in ACEEE’s State Energy Efficiency Scorecard had mandatory savings targets in place (including Ohio). Meanwhile, states with voluntary standards ranked much lower in terms of electricity savings—for example, Missouri (33rd), Kentucky (34th), Tennessee (36th), and Virginia (47th). The trend of top savings occurring only in states with mandatory goals has generally held true for at least the past five years.

Emerging technologies are creating huge potential for energy savings targets

The energy efficiency targets in Ohio's original legislation are achievable and cost-effective, as we examined this summer in an analysis on energy efficiency potential in Ohio. We reviewed energy efficiency potential studies by the four investor-owned utilities (IOUs) in the state, which showed that the utilities were already planning on significant, cost-effective energy savings from efficiency programs. While the utility studies identified large amounts of untapped energy potential in the state through the next 10–20 years, they often underestimated the full efficiency potential in certain areas. For example, several emerging technologies and best practice strategies to encourage customer participation can yield significant additional energy savings, but were not fully considered in the studies. A recent ACEEE analysis further examines those emerging technologies and strategies in more depth, finding that 18 measures alone—including reduction of plug loads, conservation voltage reduction, and smart manufacturing— could collectively save up to 31% of total projected electricity use in the year 2030 .

The committee's recommendations are now in the hands of the Ohio General Assembly, which will decide whether to take them up in legislation. We hope they consider the evidence and the facts in their decisions—that energy efficiency delivers, and that policies matter. Setting concrete utility targets is the still best way to deliver energy and costs savings for Ohio customers.

Duke Energy looks to cooperate with states on EPA’s Clean Power Plan as it mulls a challenge

Posted by Laura Arnold / October 02, 2015 / Posted in Uncategorized / No Comments

Duke Energy looks to cooperate with states on EPA's Clean Power Plan as it mulls a challenge

by John Downey, Senior Staff Writer, Charlotte Business Journal

Oct 1, 2015, 4:33pm EDT

Duke Energy executive Jennifer Weber says the power company will focus on working with state officials on how to implement the Obama administration’s Clean Power Plan as it considers whether to challenge the program.

“That is under consideration,” she said. “But for now we are leaving that aside to work with our states on what compliance looks like.”

Jennifer Weber spoke in Washington Wednesday at the "Reviving Private Investment" panel sponsored by the Progressive Policy Institute.

Weber, Duke’s executive vice president of external affairs and strategic policy, was in Washington Wednesday to speak on a panel organized by the Progressive Policy Institute.

‘Investment drought’

PPI used the discussion of private investment to outline the results of its new report, “U.S. Investment Heroes of 2015,” which identifies 25 large companies — including Duke — that are bucking the trend of what PPI sees as an “investment drought” in the United States.

Weber told the audience the principal drivers for investment at Duke are changes in what customers expect from their power companies, new technology and the opportunities it creates, and public policy.

After the event, she spoke with the Charlotte Business Journal in a telephone interview.

Market forces

Weber said taxes remain a key public-policy issue for capital-intensive companies such as Duke. She said lower state and federal rates would spur investment. So would a revamping of federal taxes on repatriating money that U.S. companies earn overseas for investment in the United States.

She also said policymakers should always consider what can be accomplished by market forces without regulation. She contends the current low cost of natural gas and the rapid drop in the costs of solar and other renewable-energy sources occurred largely in the absence of new regulation.

So, she said, the more the Clean Power Plan can rely on those kind of market forces, the more successful it will be.

New services

On new technology, she cited advancements in renewables and battery storage as key innovations. Duke utilities are investing in building solar plants in North Carolina and Florida. She also said government polices to encourage investment in research and development would be helpful.

On changing customer expectations, she cited demand for more billing options and for greater access to buying clean energy. “We are looking for new energy services in which we could be energy advisers for our customers,” she said.

Some of those services may be offered as part of the services Duke already provides customers. Others will likely be offered as premium services, which customers can pay for separately.

Six states

Weber says Duke has no timetable on when it will decide whether to challenge the Clean Power Plan. She notes it is a comprehensive and complex regulatory plan.

The plan sets separate requirements for every state and instructs the states to propose the methods for achieving them.

Duke operates in six states — the Carolinas, Florida, Indiana, Kentucky and Ohio — and must consider the impact on its operations in each state as it decides whether to object to the plan.

John Downey covers the energy industry and public companies for the Charlotte Business Journal.