Written by John Russell 

Despite strong opposition from environmentalists, senior citizens and consumer groups, an Indiana Senate committee on Thursday endorsed legislation that encourages the construction of coal-fired and nuclear power plants in Indiana and would allow utilities to quickly recover certain costs from customers.

The wide-ranging measure, supported by major utilities across Indiana, passed the Senate Utilities and Technology Committee along party lines after three hours of heated discussion. Six Republicans, including Chairman Jim Merritt of Indianapolis, voted in favor, and two Democrats voted against. The bill now moves to the full Senate for consideration.

"Our energy needs are growing," said Sen. Brandt Hershman, R-Lafayette, one of the bill's authors. "We need to develop a comprehensive policy to address this challenge."

More than a dozen organizations showed up to oppose the measure, including environmentalists, large industrial customers, wind power advocates, the AARP and consumer groups.

Many said the bill would raise the cost of electricity to customers and would shift the risk of building traditional power plants from the utility companies to customers. They also said Senate Bill 251 would give incentives to utilities to do what they are already doing: investing in coal plants at the expense of renewable-energy projects such as wind, solar, biomass and water.

"You are rolling out the red carpet for nuclear power and coal and telling real renewable-energy resources to use the back door," said Laura Ann Arnold of Indiana Distributed Energy Advocates, a promoter of renewable energy.

The Indiana Cast Metals Association, which represents foundries across the state, said the bill allows too many "trackers," or mechanisms that allow utilities to automatically pass along the cost of federal mandates without sufficient oversight from the Indiana Utility Regulatory Commission.

"Energy costs are a top concern of our members," said Blake Jeffery, the association's executive director.

But some Republicans said the bill would help provide reliable electricity for all Hoosiers.

"You want power. It's not going to fall out of the sky for free," responded Sen. Beverly Gard, R-Greenfield, one of the bill's authors.

Citizens Action Coalition of Indiana, a grass-roots consumer group with 40,000 members, denounced the bill, saying it would reduce financial risk for utilities while increasing their profits. A section of the bill would provide up to 3.5 percent more return on investment to utilities that meet certain renewable-energy requirements.

"When are we going to talk about the consumer, and about protecting the public?" said Kerwin Olson, program director at Citizens Action.

"You are merely shifting the risk to ratepayers," said Jack Wickes, an attorney at Lewis & Kappes, which represents dozens of large industrial consumers of electricity.

The Sierra Club's Hoosier chapter said the bill would take Indiana's energy policy in the wrong direction, encouraging traditional power plants at the expense of cleaner, renewable options.

"What you are doing is incentivizing business as usual," said Mike Mullet with the Sierra Club.

The bill also would provide incentives to build nuclear power plants in Indiana. There are no nuclear plants in the state, and the last one that was approved, Marble Hill in Southern Indiana, was abandoned during construction in the 1980s after running into huge cost overruns.

The Indiana Energy Association, which represents about a dozen utility companies, said none of its members is planning to build a nuclear plant in Indiana.

But some legislators, including Hershman, said they wanted to make the state attractive for a nuclear plant in the future by offering more incentives, such as ratepayer financing of new plants as they are constructed.

"Without the change in law provided in SB 251, it would be very difficult for such a plant to be constructed here," Stan Pinegar, president of the Indiana Energy Association, said in an e-mail afterward.

The bill would also direct the Indiana Utility Regulatory Commission to "exercise all necessary caution" to avoid disclosing confidential information it receives from utilities to the public during rate cases or capital projects.

In recent months, several organizations, including The Indianapolis Star and Citizens Action Coalition, separately have filed open-records requests with the IURC, asking to see inspection reports on the construction of Duke Energy Corp.'s new power plant in Edwardsport, which has been plagued with cost overruns and delayed by accidents.

The IURC has denied the requests, citing state privacy laws on such reports. The new bill underscores the state's efforts to keep such information private.

Some consumer and environmental advocates on Wednesday urged the Senate to drop that requirement from the bill, but the committee kept it in.

"When you deal with regulated utility monopolies, transparency in the process is critical," said the Sierra Club's Mullet.