Industry: Indiana electric rates hurt competitiveness
By Keith Benman keith.benman@nwi.com, (219) 933-3326
Indiana's largest manufacturing companies are preparing to make the case for changes in the way Indiana regulates electric utility rates, which they say could restore the state's economic competitiveness.
Indiana Industrial Energy Consumers Inc., a consortium of more than two dozen companies, is pointing out Indiana electric rates have gone from being the 5th lowest in the nation in 2003 to the 26th lowest in 2014, according to data from the U.S. Energy Information Agency.
"We've lost that really nice economic competitiveness advantage we use to have," said Jennifer Wheeler Terry, legislative liaison for Indiana Industrial Energy Consumers.
Perhaps even more alarming, neighboring states like Illinois and Ohio that once had higher average industrial electric rates than Indiana now have lower average rates, Terry said. Illinois and Ohio have instituted reforms in recent years that have controlled their electric rates and even lowered them some, although Illinois' rates had price spikes in the early years.
"We feel like surrounding states are really engaged with their energy policy and Indiana could really benefit as well if we got in the game," Terry said.
Manufacturing companies included in the consortium with operations locally include Alcoa, ArcelorMittal, BP, Marathon Petroleum, Praxair and U.S. Gypsum. Companies with operations elsewhere include automakers Chrysler, Honda and Toyota; steelmaker NLMK; pharmaceutical company Eli Lilly; and jet-engine builder Rolls-Royce.
Terry, an energy sector lawyer at Indianapolis law firm Lewis Kappes, recently represented several Northwest Indiana companies in a landmark Court of Appeals case challenging bill surcharges for NIPSCO's $1.2 billion electric modernization plan. Under a proposed settlement, NIPSCO would file a rate case by the end of this year.
NIPSCO spokesman Nick Meyer said Tuesday the utility remains committed to competitive electric rates, which are important to both customers and the state. He pointed out recent electric price increases often have been due to factors beyond utilities' control, such as environmental regulations.
The Indiana market for electricity is dominated by investor-owned utilities NIPSCO, Vectren, Indianapolis Power & Light, Duke and AEP.
The consortium of large industrial customers will start by lobbying a joint Indiana Senate/House committee this summer on energy matters to expand opportunities for co-generation plants at their facilities, Terry said in a Tuesday briefing.
Those plants produce both heat and electricity. They are generally seen as an environmentally friendly alternative to coal fired plants.
But the companies also are discussing the possibility of much broader reforms that could increase competition in the marketplace for both industrial and residential customers.
Those could include allowing individual industrial users to apply for alternative regulatory plans that might allow them to buy electricity from providers other than the local monopoly utility. Further reforms could include competitive procurement of new infrastructure and allowing independent and renewable energy providers to sell directly to customers. [emphasis added]