By Megan Banta
INDIANAPOLIS – A House committee Wednesday passed an amended version of a bill that would allow utilities to add the costs of their infrastructure upgrades onto customers’ bills after expedited regulatory reviews – rather than the state’s normal in-depth process.
Ed Simcox, president of the Indiana Energy Association, testified Wednesday in support of legislation that gives utilities an expedited system for passing the costs of upgrades on ot customers. Photo by Megan Banta, TheStatehouseFile.com
Supporters say the bill will help boost energy and economic development but critics say it shifts the risks associated with construction and upgrades away from the utilities and to ratepayers.
Sen. Brandt Hershman, R-Buck Creek, who authored SB 560, said the bill is part of an effort to enact a balanced energy policy. He said having a reliable infrastructure is critical, especially as part of an effort to make Indiana to be competitive for jobs.
Indiana is “one of the lowest cost energy providers in the nation,” he said, but the landscape is changing as the cost of mining and using coal has gone up.
Hershman said recent incidents, including the power outage during the Super Bowl in New Orleans and the gas explosion on the south side of Indianapolis, have shown the need for a safe distribution network.
SB 560 would help achieve that by encouraging infrastructure development, he said.
Rep. Matt Pierce, D-Bloomington, asks a question Wednesday during a hearing about a bill that would expedite utility requests to pass construction or upgrade costs on to customers. Photo by Megan Banta, TheStatehouseFiles.com
Ed Simcox, president of the Indiana Energy Association, said the measure would allow for efficiency in modernizing the state’s infrastructure to make it more safe and reliable.
He said more than half of the other states have similar provisions and that this kind of legislation is “a trend around the country in rate making.”
Bob Kraft, spokesman for Indiana Farm Bureau, said the bill would have many benefits for farmers and rural communities, including more access to natural gas.
“What it would do primarily would be to encourage economic development within the small, rural communities,” he said.
Kraft said potential employers look at the availability of natural gas and this bill would provide “opportunities for off-farm employment for farm families,” which could mean access to benefits for some small farms.
The committee made some changes to the bill, including a decrease in the amount a utility may charge to customers as part of a temporary implementation from 75 percent to 50 percent and the addition of interest to customer refunds. Those eased some opponents’ concerns, but several still spoke in opposition to the bill.
Rep Matt Pierce, D-Bloomington, was the only member of the committee to vote no. He said the Indiana Utility Regulation Commission might not have enough employees to deal with the complex issues involved with reevaluating cases approved using the so-called trackers, the more common name for the expedited regulatory review.
Kerwin Olson, executive director of the Indianapolis-based Citizens Action Coalition, said while he agrees that the rate case process needs streamlined, he does not think the bill necessarily fixes the problem.
Olson said he does not understand why a tracker is needed.
“This would give them (utilities) a tracker for everything else,” he said. “This would essentially allow them to track all of the costs involved with running a monopoly utility company.”
Olson also voiced concerns that while the proposal deals with investment risks, it puts the burden of those risks on those who cannot bear it, such as low-income families and the elderly.
“Five, 10, 15 dollars on a senior citizen’s utility bill is the choice between heat and eat,” he said.
Muncie Mayor Dennis Tyler, a former state representative, was also concerned about the bill’s potential effect on those who are struggling financially.
He said the measure “aims to enhance utility profits at my constituents’ expense” and would increase utility bills and decrease consumer protection.
Charlie Hutchins, president of Sagamore Gas and Appliances, Inc., said the bill would “destroy existing businesses,” specifically small businesses that deal with propane.
Hutchins said the proposal is an attempt on the part of utilities to change the level of regulation from “one they must comply with to a level they enjoy.”
Megan Banta is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.