Author Archives Laura Arnold

Tax breaks for Rockport gas plant stripped; Indiana lawmakers say too many questions unanswered

Posted by Laura Arnold / February 23, 2012 / Posted in Uncategorized / No Comments

Original article: http://www.courierpress.com/news/2012/feb/22/tax-breaks-rockport-gas-plant-stripped-bill-indian/

By Lesley Weidenbener / Special to the Evansville Courier & Press; Posted February 22, 2012 at 11:33 p.m.

INDIANAPOLIS —Questions about a synthetic natural gas plant proposed for Southern Indiana led a House committee Wednesday to strip tax breaks for the $2.6 billion project from a bill that already has passed the Senate.

The Ways and Means Committee also eliminated language from Senate Bill 344 that would have taken industrial customers — those who use so much natural gas they strike their own purchasing contracts — out of the customer deal that led the General Assembly to OK the plant in 2007.

“I am still for the project,” said Rep. Suzanne Crouch, R-Evansville, who voted for the Indiana Gasification plant in 2007 and authored Wednesday’s amendments.

“But I believe the General Assembly has provided enough tools for the project,” Crouch said. “When is enough enough? When do we move from a public-private partnership to a publicly subsidized project?”

Others, though, expressed concern about whether the project should move forward at all. Rep. Win Moses, D-Ft. Wayne, said he initially supported the idea because it would convert Indiana coal to a cleaner fuel and because it seemed like it would save Hoosiers money.

Now, he said, the plant will not be required to use Indiana coal and the savings are unclear.

“I really hoped the governor would pull the plug,” Moses said.

The Ways and Means Committee voted 22-2 to remove the Indiana Gasification language from SB 344.

Officials from Evansville-based Vectren Energy appear to be largely responsible for the Ways and Means Committee’s action. The company has been lobbying against the tax breaks for the project and has appealed a decision by the Indiana Utility Regulatory Commission to OK the 30-year contract between Indiana Gasification and the Indiana Finance Authority.

“We were pleased to see nearly every member of the committee acknowledge that the natural gas world has changed, and that there are serious questions about building a plant that will burden Hoosiers with 30 years of expensive substitute natural gas,” said Mike Roeder,Vectren’s vice president of government affairs and communications.

That contract calls for the state to buy most of the plant’s synthetic natural gas. The price would be determined by a formula that takes into account a fixed rate plus fluctuations for the cost of coal and other factors. The state would then sell the gas in the market.

Customers of the state’s natural gas companies — including Vectren but also Citizens Gas, NiSource and other utilities — will then share in half of the profits the state earns or pay more to make up for most of the losses.

But there’s a question about whether industrial customers were originally meant to be part of the deal. Vectren and some lawmakers say yes. Indiana Gasification and other lawmakers say no, which is why those customers were seeking legislation to clarify. That provision exempting industrial customers was stripped from the bill.

Mark Lubbers, who is spearheading the Indiana Gasification project for parent company Leucadia National Corp., has said the project will be a great deal for Hoosiers. SNG produced at the Rockport plant will cost about $6.60 per dekatherm, which he said will be cheaper than natural gas over the 30 year period.

But Vectren officials — and now some lawmakers — are arguing that the recent emergence of shale gas — which is recovered through a process called hydraulic fracturing — has driven prices lower and making the SNG deal questionable.

Currently, natural gas prices are below $3 per dekatherm and futures prices remain below the $6.60 estimate for the Rockport contract.

“Shale gas deposits around the country have increased supply at a historically low price,” Roeder said. “We will continue working with legislators on this topic for the remainder of the session.”

Rep. Matt Ubelhor, R-Bloomfield, was one of two lawmakers who voted against the amendments to take the Indiana Gasification language out of the bill. Ubelhor, a manager at a coal mine, said he’s confident the project is still a good one and will create jobs and a market for Indiana coal.

“My fear is that this is the first step toward elimination” of the project, Ubelhor said.

But Rep. Terry Goodin, D-Crothersville, said there is no legislation to eliminate the project. “This will just be a bigger magnifying glass” on it, he said.

Because SB 344 passed the Senate with the Indiana Gasification language in the bill, it remains alive for this session. That means it could still be amended into other legislation.

Ways and Means Chairman Jeff Espich, R-Uniondale, said the issue might not be dead but said it “needs to continue to be reviewed.”

MI Public Service Commission: Renewables Less Expensive than Coal, Spark Economy

Posted by Laura Arnold / February 23, 2012 / Posted in Uncategorized / 1 Comments

FOR IMMEDIATE RELEASE: Thursday, Feb. 23, 2012

CONTACT: Heather Kevnick (517) 333-1606 or mieibc@mieibc.org

www.mieibc.org

Find us on Facebook www.facebook.com/MIEIBC

LANSING – A Michigan Public Service Commission report shows Michigan's renewable energy standard is directly sparking Michigan's economy, generating $100 million in investments, spurring manufacturing and business growth, and creating jobs, the Energy Innovation Business Council said today. The report also shows that renewable energy now costs less than coal.

Read the full report at http://www.michigan.gov/mpsc.

"Michigan manufacturers and businesses see firsthand how a renewable energy standard drives economic growth, innovation, investments and job creation, and this report validates the need for a strong renewable energy standard," said Jeff Metts, CEO of Astraeus Wind, a manufacturing company based in Eaton Rapids. "Other states are aggressively pursuing strategies to grow their renewable energy and manufacturing sectors. Michigan must roll up our sleeves and aggressively position ourselves to compete for new opportunities and jobs, or get left behind."

The MPSC report on the RES enacted in 2008 included the following highlights:

Michigan's current RES generated more than $100 million in investments on advanced energy projects between 2008-2011, many of them directly impacting Michigan businesses and workers
All renewable energy sources cost significantly less than coal per megawatt/hour, with renewables costing an average of $91.19/MWh, lower than the $133/MWh for a new coal plant.
Michigan is on track to meet the current renewable energy standard of 10 percent by 2015

The MPSC report went on to say: "Michigan has the potential to become a regional leader in development and manufacturing of renewable energy systems, building on the state's engineering expertise, modernized machining, and investment in renewable energy in coming years. It appears that the Michigan incentive REC (renewable energy credits) provision in the standard is meeting its intended purpose to encourage developers to maximize the amount of Michigan equipment and labor."

Additionally, Mlive.com reported Feb. 16 that Consumers Energy significantly lowered its renewable energy charge from $2.50 to only 65 cents a month because renewable energy costs continue to decrease.

While the MPSC report says Michigan is on track to meet the RES by 2015, only around 3.6 percent of Michigan's electricity currently comes from renewables. In comparison, 21 percent of Iowa's electricity already comes from renewables. In addition, neighboring Midwest states such as Ohio, Illinois and Minnesota have renewable energy standards higher than Michigan's.

"Michigan's renewable energy sector is providing solid financial, social and ecological values for Michigan because of our renewable energy standard. Michigan utilities that are investing in advanced energy such as wind and solar deserve full credit for embracing the future and creating new economic opportunities," said Rich Vander Veen, president of Mackinaw Power in Lowell. "The MPSC report shows a renewable energy standard establishes energy security and makes good economic sense for Michigan businesses and ratepayers. New wind farms are providing solid income to local communities and landowners, and this helps protect family farms for future generations."

"Michigan's advanced energy manufacturing companies are retooling, our workers are retraining and we are rebuilding our economy, thanks to positive programs such as our renewable energy standard," said EIBC President Ed Clemente. "Michigan is showing the world that we are once again a great place for innovation, entrepreneurship and manufacturing. The MPSC report demonstrates how advanced and renewable energy can diversify our economy, bring new opportunities for business and move us forward."

Earlier this month, the EIBC released a study showing Michigan's advanced energy manufacturing sector – solar, wind, advanced energy storage and batteries, and biomass – generates $5 billion a year in economic activity and supports 20,500 jobs a year. The study is one of the first of its kind in the nation because it used real-world manufacturing data.

About the Energy Innovation Business Council

Global, national and statewide demand for clean, renewable sources of energy continues to grow – and Michigan has the resources to become a significant contributor to this growing new energy economy.

The Energy Innovation Business Council is a trade organization made up of Michigan companies and businesses that are at the forefront of this important sector. Our members are engaged in clean energy manufacturing and other areas of the new energy economy that is creating opportunities and jobs for Michigan.

Launched in 2012 as a voluntary membership organization, EIBC is excited to invite all Michigan businesses interested in the clean energy economy to join the council. Together, EIBC can be an even stronger advocate for clean energy innovation, entrepreneurship, opportunities and jobs.

The EIBC aims to diversify and accelerate the growth of Michigan's energy sector and create partnerships to expand business opportunities, secure access to capital, engage the public and policymakers, advocate and build consensus for policy, and advance energy innovation with the goal of generating jobs and economic development.

Website: www.mieibc.org

Facebook: http://www.facebook.com/MIEIBC

Twitter: http://twitter.com/mi_eibc

Michigan Public Service Commission

Report on the implementation of the P.A. 295 renewable energy standard

and the cost-effectiveness of the energy standards

HIGHLIGHTS OF THE MPSC REPORT

Michigan's current RES generated more than $100 million in investments on advanced energy projects between 2008-2011. (p. 18)
All renewable energy sources cost significantly less than coal per megawatt/hour, with renewables costing an average of $91.19/MWh, lower than the $133/MWh for a new coal plant. (p. 22, p. 25-26)
- The actual cost of renewable energy contracts submitted to the MPSC to date shows a downward pricing trend. This was the case as of the filing of this report in February 2011 and continues to be the case as the two most recent contracts approved by the MPSC for new wind capacity have levelized costs of $61-$64/MWh. (p.24)
- Based on contract pricing trends, MPSC anticipates that the cost of renewable energy will continue to decline. (p. 26)
Michigan is on track to meet the current renewable energy standard of 10 percent by 2015. (p.28)
- By the next MPSC biennial review in 2013, electric providers will have made significant progress toward securing all the renewable energy necessary for compliance with the Act. (p. 9)
- Progress toward the first compliance year in 2012 and the 10 percent renewable energy standard in 2015 is going smoothly. (p. 28)
A benefit of the additional investment, manufacturing, installation, administration and development of clean and renewable energy has been job creation. (p. 18)

"Michigan has the potential to become a regional leader in development and manufacturing of renewable energy systems, building on the state's engineering expertise, modernized machining, and investment in renewable energy in coming years. It appears that the Michigan incentive REC (renewable energy credits) provision in the standard is meeting its intended purpose to encourage developers to maximize the amount of Michigan equipment and labor." MPSC report, 2/15/2012, p. 20.

New renewable capacity by technology type

Includes all renewable energy contracts approved by the MPSC from 2009 - 2011. Includes 12 MW of Solar that will come online through 2015. (Source: Electric provider contract approval filings.)

IURC Hearing on Indiana Michigan Power Rate Case Starts Today –Feb. 20 at 9:30 am EST; Watch On-line

FYI: The IURC streaming video is down right now but they are trying to fix it. Check back periodicially to see if the problem is fixed so that you can watch on-line. Laura Ann Arnold

Hearing Set For I&M Rate Case

InsideINdianaBusiness.com Report

The Indiana Office of Utility Consumer Counselor's first evidentiary hearing in the Indiana Michigan Power rate case begins Monday. I&M's requested increase would raise some customers' monthly bills by approximately 25 percent. The utility serves more than 450,000 Indiana customers.

To watch on-line, go to http://www.in.gov/iurc/2624.htm Hearing is scheduled to start today at 9:30 am and continue for the next two weeks if needed.

February 17, 2012

News Release

The Indiana Office of Utility Consumer Counselor (OUCC) and other consumer parties will start cross examining Indiana Michigan Power Company's (I&M's) rate case witnesses on Monday, February 20.

Twenty-two I&M witnesses have filed testimony in the utility's pending base rate case before the Indiana Utility Regulatory Commission (IURC). The IURC's first evidentiary hearing in the rate case starts Monday in Indianapolis and is expected to last several days.

"The evidentiary hearing is a critical step in this case as the OUCC continues to question I&M on its request and develop recommendations," said Indiana Utility Consumer Counselor David Stippler. "While this hearing will focus on attorney cross-examination and Commission questioning of I&M’s technical witnesses, I urge I&M customers to make the most of the opportunities they have to make their voices heard."

I&M's requested base rate increase, according to its testimony and exhibits, would raise the monthly bill for a residential customer using 1,000 kilowatt hours (kWh) by 25.38 percent.

The rate case (IURC Cause No. 44075) is one of several I&M cases that may have a significant, cumulative impact on I&M customer bills. Separately from the rate case:

I&M is seeking rate recovery for new pollution control equipment at its Rockport Generating Facility (in IURC Cause No. 44033). The utility's testimony in that case does not specify how the $1.4 billion Rockport project would affect Indiana customer bills, with I&M scheduled to file additional testimony in late April.
I&M is also expected to request IURC approval of a Life Cycle Management project for its D.C. Cook Nuclear Plant this year. In its rate case testimony, I&M estimates the Cook project costs at "less than $2 billion."

I&M customers may comment in the rate case in either or both of two ways:

1. By attending and speaking at one of the IURC's public field hearings. These will be held in Fort Wayne, South Bend and Muncie on upcoming dates to be determined.

2. By sending written comments to the OUCC. Comments the OUCC receives by April 20, 2012 will be filed with the IURC, to be included in the case's formal evidentiary record.

The OUCC invites consumer comments through the agency's Website at www.in.gov/oucc/2361.htm, and by mail, email, or fax:

• Mail: Consumer Services Staff; Indiana Office of Utility Consumer Counselor; 115 W. Washington St., Suite 1500 South; Indianapolis, IN 46204

• email: uccinfo@oucc.IN.gov

• Fax: (317) 232-5923

Written comments should include the consumer's name, mailing address, and a reference to "IURC Cause No. 44075."

"Whether consumers wish to write to us, attend a field hearing, or both, we want to hear from them," said Stippler. "While the OUCC’s attorneys and technical experts are examining I&M's rate case very closely, consumer input is extremely important to this process."

The OUCC is scheduled to complete its technical and legal review of I&M's request and file testimony on April 27, 2012.

Other parties that have intervened in this case (including the cities of South Bend and Fort Wayne, a number of I&M's industrial customers, and the Citizens Action Coalition of Indiana) are also scheduled to file testimony on April 27. Witnesses for the OUCC and other consumer parties will face cross-examination and Commission questioning at an evidentiary hearing to be held in June.

For more information on the base rate case and other I&M cases, please visit the OUCC's Website at www.in.gov/oucc/2680.htm.

I&M, a wholly owned subsidiary of American Electric Power (AEP), provides service to approximately 458,000 customers in 24 Indiana counties.

(IURC Cause No. 44075)

The Indiana Office of Utility Consumer Counselor (OUCC) represents Indiana consumer interests before state and federal bodies that regulate utilities. As a state agency, the OUCC's mission is to represent all Indiana consumers to ensure quality, reliable utility services at the most reasonable prices possible through dedicated advocacy, consumer education, and creative problem solving. To learn more, visit www.IN.gov/OUCC

Source: Indiana Office of Utility Consumer Counselor

Vectren: Rockport a ‘Loser’ For Indiana Natural Gas Customers

Posted by Laura Arnold / February 16, 2012 / Posted in Uncategorized / No Comments

Dear Readers,

Kerwin Olson, Executive Director of the Citizens Action Coalition of Indiana (CAC) also testified at the House Ways and Means Committee hearing and essentially supported the testimony given by Vectren. The fact that CAC was supporting a position of an Indiana utility brought more than a few smiles and laughes from the Committee.

Laura Ann Arnold

Utility executive: Shale-gas boom means proposed coal-gasification plant's 'time has passed'

from Associated Press, Feb. 14, 2012

INDIANAPOLIS — A utility executive told a legislative committee Tuesday that a drop in natural gas prices as a result of the nation's shale-gas boom have made a proposed southern Indiana coal-gasification plant a project "whose time has passed."

Jerry Ulrey, Vectren Corp.'s vice president for regulatory affairs, also told the House Ways and Means Committee that the utility estimates the proposed plant would lose more than $800 million over its first eight years in operation given current natural gas price projections.

He testified as the panel considered a bill exempting large industrial customers from rate hikes resulting from a state-negotiated gas supply deal for the plant proposed near the Ohio River town of Rockport. The Senate passed the bill earlier this month.

Ulrey told the committee that excluding large industrial customers from sharing in the plant's production costs could end up doubling the rate increases for some of Vectren's 760,000 residential and small business customers in Indiana.

Mike Roeder, Vectren's vice president of government affairs and corporate communications, told the Evansville Courier & Press (http://bit.ly/Asw57l) before the hearing that such an exemption would "pick customer classes that win and lose."

In November, the Indiana Utility Regulatory Commission approved a 30-year contract under which Indiana would become the primary buyer of the synthetic natural gas developer Leucadia Corp.'s Rockport plant would produce.

Indiana's natural gas-supply deal calls for the plant's gas to be bought for a fixed price and the Indiana Finance Authority to resell it to consumers through utilities, guaranteeing the plant's developers a customer.

Vectren contends that under that 30-year contract, the gas price has some room to increase over time, but would start at about $6 per million BTU. Right now, that much natural gas sells for $3. Estimates are wide-ranging, but Vectren officials believe the price will stay low because natural gas is being extracted from shale deposits by a booming industry.

Vectren said its customers could end up paying more for their gas because the state would buy the Rockport plant's synthetic gas no matter whether it's cheaper or more expensive than the market rate for natural gas.

Gov. Mitch Daniels says the deal would lock in low rates for Indiana 's natural gas users.

"All we're saying is, the world's changed because of shale," Roeder said.

Gov. Mitch Daniels has said the deal would lock in low rates for Indiana's natural gas users and would help economically depressed southwestern Indiana.

Mark Lubbers, a former Daniels aide who is an Indiana consultant for Leucadia, said large industrial customers are able to buy from diverse sources, which enables them to hedge against price changes.

He told the Ways and Means committee Tuesday that the Rockport project would do the same for other natural gas customers since the coal that will be bought for the plant historically has had more stable prices.

"It is still the smart play to diversify your supply portfolio," Lubbers said. "Today you are 100 percent at risk to market prices."

Rockport developer William Rosenberg said the facts Vectren laid out were all in front of the IURC when it unanimously approved the Rockport plant in November.

He said the plant owned by New York-based Leucadia would have a strong incentive to beat the market rate. The contract guarantees that over the 30-year life of the deal, and it will save consumers $100 million, Rosenberg said.

"The one thing that's certain is that gas prices are uncertain. Gas prices over the last five, 10 years have ranged from $3 to $13," he said. "It's in the interest of the ratepayer to have a diversification of supply."

___

Information from: Evansville Courier & Press, http://www.courierpress.com

----------------------------------------------------------------------------------------------------------

Andy Ober, InsideINdianaBusiness.com

Roeder says the company will continue to make its case to lawmakers up until a final vote.

Evansville-based Vectren Corp. (NYSE: VVC) says an expected Statehouse vote next week could be key in determining whether a proposed coal gasification plant moves forward. The company argues the plant slated for southwest Indiana would cost the state's natural gas customers $800 million in its first eight years of operation. Vice President of Corporate Communications Mike Roeder says an increase in shale-based natural gas makes the 30-year deal with Indiana Gasification LLC risky.

The Indiana Utility Regulatory Commission approved the 30-year contract with Indiana Gasification late last year. Roeder says at the time the project was initially proposed, it may have made sense because of the high cost of natural gas. He says the boost in supply has driven prices down.

Developers say the more than $2 billion project could create at least 200 jobs.

Source: Vectren Corp., Inside INdiana Business

Indiana House Ways and Means Committee Hearing 2/14/12 @ 9am on SB 344 includes property tax exemption for solar PV

Posted by Laura Arnold / February 13, 2012 / Posted in Uncategorized / No Comments

ACTION ALERT

The Indiana House Ways and Means Committee has scheduled a committee hearing on SB 344 on state taxation. SB 344 was amended and passed the Indiana Senate with language which now includes a property tax exemption for solar photovoltaic systems.See below for language in the bill.

Agenda for :

Indiana House Ways and Means Committee

Monday, February 14, 2012 9:00 AM EST

Room 404 State House, Indianapolis, IN

Watch Video of the General Assembly >Please select video stream > House Ways and means

Chairman : Espich

Vice-Chair : Crouch

Members :

Cherry Chair of Budget Subcommittee, Dermody Chair Higher Ed Sub,

Pond Chair Health & Medicaid Sub, M. Smith Chair Tax Sub,

Thompson Chair K-12 Sub, Baird, Clere, Karickhoff, Kubacki,

Leonard, McClain, Truitt, Turner, Ubelhor.

Crawford R.M.M., Candelaria Reardon, Goodin, Kersey, Klinker,

Moses, Pelath, Pryor, Welch.

The following previously scheduled bills are eligible for amendment and vote only.

SB 98 - Amend & Vote Only

SB 143 - Amend & Vote Only

Authors, Sponsors/Co-Sponsors

Hearing :

>SB 0344 State taxation. Hershman, Mishler Espich, Welch<

SB 0140 Slot machine wagering tax. Kenley, Charbonneau Espich, Crawford

SB 0142 Property tax issues. Kenley, Hershman Espich, Crawford

SB 0307 Fire protection territories. Hershman, Kenley VanNatter, Welch

SB 0345 Statewide 911 system. Hershman, Wyss Thompson, Soliday, Welch

SB 0098 County highway maintenance funding. Kenley, Charbonneau Espich, Crawford

SB 0143 Automatic taxpayer refund. Kenley, Charbonneau Espich, Crawford

Language in SB 344 as it was amended and passed the Indiana State Senate now includes the following:

CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012 (RETROACTIVE)]:

Sec. 26.1. (a) This section applies only to a solar power device that is installed after December 31, 2011.
(b) This section does not apply to a solar power device that is owned or operated by a person that provides electricity at wholesale or retail for consideration other than a person that:
(1) participates in a net metering or feed-in-tariff program offered by an electric utility with respect to the solar power device; or
(2) is the owner or host of the solar power device site and a person consumes on the site the equivalent amount of electricity that is generated by the solar power device on an annual basis even if the electricity is sold to a public utility, including a solar power device directly serving a public utility's business operations site.
(c) For purposes of this section, "solar power device" means a device, such as a solar thermal, a photovoltaic, or other solar energy system, that is designed to use the radiant light or heat from the sun to produce electricity.
(d) The owner of real property equipped with a solar power device that is assessed as a real property improvement may have deducted annually from the assessed value of the real property an amount equal to:
(1) the assessed value of the real property with the solar power device included; minus
(2) the assessed value of the real property without the solar power device.
(e) The owner of a solar power device that is assessed as:
(1) distributable property under IC 6-1.1-8; or
(2) personal property;
may have deducted annually the assessed value of the solar power device.

SOURCE: IC 6-1.1-12-27.1; (12) SB0344.2.5. --> SECTION 5. IC 6-1.1-12-27.1, AS AMENDED BY P.L.113-2010, SECTION 26, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012 (RETROACTIVE)]: Sec. 27.1. Except as provided in sections 36 and 44 of this chapter and subject to section 45 of this chapter, a person who desires to claim the deduction provided by section 26 or 26.1 of this chapter must file a certified statement in duplicate, on forms prescribed by the department of local government finance, with the auditor of the county in which the real property, or mobile home, manufactured home, or solar power device is subject to assessment. With respect to real property or a solar power device that is assessed as distributable property under IC 6-1.1-8 or as personal property, the person must file the statement during the year for which the person desires to obtain the deduction. Except as provided in sections 36 and 44 of this chapter and subject to section 45 of this chapter, with respect to a mobile home which is not assessed as real property, the person must file the statement during the twelve (12) months before March 31 of each year for which the person desires to obtain the deduction. The person must:
(1) own the real property, mobile home, or manufactured home or own the solar power device;
or
(2) be buying the real property, mobile home, or manufactured home, or solar power device under contract; or
(3) be leasing the real property from the real property owner and be subject to assessment and property taxation with respect to the solar power device;
on the date the statement is filed under this section. The statement may be filed in person or by mail. If mailed, the mailing must be postmarked on or before the last day for filing. On verification of the statement by the assessor of the township in which the real property, or mobile home, manufactured home, or solar power device is subject to assessment, or the county assessor if there is no township assessor for the township, the county auditor shall allow the deduction.