A bill is in the works that could increase Indiana’s dependence on coal and gas

Indiana has taken small steps toward breaking its heavy reliance on coal and natural gas, but some fear a new bill could slow that transition and keep fossil fuels off emissions for longer.

As the legislative session gets underway on Monday, the bills that must be considered by the legislature in this session have begun to roll in. One of them is expected to be a bill that would limit the amount of electricity Indiana utilities can draw from the grid. In other words, it would take facilities to be able to produce more of their energy.

Regional and national grid operators have raised concerns about reliability in recent months, warning that factory retirements have left the region with fewer resources and that fuel availability issues could lead to insufficient power supplies during severe winter weather.

That’s why Indiana’s 21st Century Energy Task Force wants the state’s utilities to be more self-sufficient—and it’s feeling the potential legislation, which it recommended in last final reportis one way to do this.

“The fear is that if we don’t find the right balance, we’ll pay any price,” Rep. Edmund Solidi, R-Valparaiso, said during a task force meeting. Soliday, who co-chairs the task force and chairs the House Utilities and Energy Committee, did not respond to IndyStar’s requests for comment.

However, many consumer and clean energy advocates as well as some lawmakers do not believe that forcing utilities to produce more of their own energy is the right solution.

Rep. Matt Pierce, D-Bloomington, said the “irony” of much of Indiana’s energy legislation is keeping fossil fuels going because of the “idea that makes things reliable.” Pierce serves on the Energy Task Force as well as on the House Energy and Utilities Committee.

“But that sacrifices affordability,” he added.

Concerns about network vulnerability

The Energy Task Force was created a few years ago to help chart a course for Indiana’s energy future and figure out how the state should get there. The group says all of its decisions and recommendations focus on five pillars: reliability, flexibility, affordability, stability and environmental sustainability.

With reliability in mind, task force members discussed lowering the utility’s capacity threshold—or how much electricity they can plan to buy from the grid in order to meet their demands.

Right now in Indiana, utilities can get up to 30% of their capacity from the grid, which is largely operated in the Midwest by a group called MISO. But the task force’s final report, released late last year, recommends lowering that number.

While no specific figure was recommended in the report, a new amount of 15% had been discussed in previous meetings. No bill on the subject had been introduced by the end of Monday, the first day of the 2023 legislative session. Proposed bills will continue to trickle in over the next several days.

“The bottom line of it all is that utilities rely so much on buying power through MISO rather than producing here in Indiana, and the idea that the more renewables you have the more it undermines the reliability of the grid,” Pearce told IndyStar. “But I think renewables are so small in Indiana that it’s too early to have these conversations.”

Renewable energy sources including wind and solar power account for just over 10% of electricity generation in Indiana. Based on the latest data, approximately 60% comes from coal and about 30% from natural gas, according to US Energy Information Administration.

axle rub: The top greenhouse gas emitters in Indiana for 2022 are power plants and the steel industry.

Despite a heavy reliance on fossil fuels, utilities in Indiana and throughout the region have either recently retired or plan to retire many coal plants in the coming decades. The MISO region has retired more than 4 gigawatts of coal and nuclear power since last winter, according to the Modern report by North American Electric Reliability Corp. , or NERC. One gigawatt can power about 750,000 homes.

The report said a severe cold weather event in the MISO region — which manages power in 14 states and one Canadian province — could result in significant generator outages. a Report from MISO He also said that as the grid adds more renewables, grid planning and operation becomes more difficult.

MISO spokesman Brandon Morris said the operator is “unfamiliar” about fuels and power generation types.

“But we are frank in stating that the accelerated retirement of widely available resources is an increasing risk,” he told IndyStar. This is particularly the case when this capacity is only partially replaced or replaced by resources that are difficult to plan for.

Consumer advocate Kerwin Olson acknowledges that there are some challenges with the grid transition to renewables, but fears these reports are being co-opted to promote fossil fuels.

“We see this kind of rhetoric and wonder if this law is designed in some way” to manage or slow the pace of generator retirement, said Olson, executive director of the Citizens Action Coalition, a consumer advocacy group.

Pearce agrees: “As I point out these challenges, the fossil fuel industry is really using these reports to create a bigger and worse impression of renewables. There was definitely a sub-text in all of these policy decisions that renewables are a grid risk and a reliability risk.” “.

Wrong solution raises costs

Grid expert Michael Goggin said he already views those reports differently — for him, the main takeaway is the need to improve and expand transmission to be able to better transmit electricity where it’s needed. He believes that renewables, along with battery storage and greater transmission capacities, provide a “very reliable source of energy”.

While he doesn’t think renewables are the only solution, he also believes that Indiana’s potential ability to reduce the bill “is the wrong solution.”

“It’s almost certain to raise costs with minimal benefits,” said Goggin, vice president of Grid Strategies LLC. “It can actually hinder the transition to more cost-effective and more reliable energy options.”

electricity: Indiana customers still face higher bills as fossil fuel plants fail, and costs soar

Peirce similarly worries that because renewable energy cannot be seen as providing capacity, it will instead lead utilities to rely on fossil fuels such as coal and natural gas, often referred to as “base load generation.” It is also a more expensive form of energy generation.

“If legislation continues down this path, we are telling the Utilities Regulatory Commission that we want the energy mix to be dominated by primary fossil fuel generation,” the lawmaker said. “So we’re basically saying we want the most expensive generation mouse driver.”

The proposed legislation would allow utilities to purchase more than 15% of their power from the grid, but they cannot count on it. Therefore, to meet capacity requirements, utilities may have to delay planned coal retirements or look to build new natural gas plants.

Customers will have to pay for more expensive power supplies, even if they barely work. This discussion has already taken place for Southern Indiana customers served by CenterPoint Energy. The facility received approval last year to build two new natural gas units that it expects to operate only about 10% of the time. However, customer bills are expected to increase by up to $20 per month.

IndyStar’s attempts to reach out to the Indiana Energy Consortium, the trade group that represents the state’s utilities, for their ideas on recommended legislation were unsuccessful.

Pearce is also quick to point out that recent problems with some fossil fuel plants in Indiana call into question how reliable they really are. In some cases, unexpected factory closures have led to higher billings.

Three of the state’s public utilities have had at least one power plant idle for an extended period of time, forcing them to buy more electricity from the grid to make up for their production shortfalls.

For example, EES Indiana’s Eagle Valley natural gas plant—described as modern and one of the most efficient in the state—stopped just three years after it started operating and has been out of service for nearly a year.

The same thing happened to one of the units at the Culley coal-fired plant in CenterPoint. It broke in June and has been offline for several months. One of NIPSCO’s gas-fired units was offline for most of last year, and was forced to retire two coal-fired units at the Schahfer plant two years ago due to a facility fire.

“The experience in Indiana is exactly the opposite: Natural gas and coal have been problematic,” Pearce said. “We have plants that hang and stay for a long time even without severe weather.”

Energy efficiency, rooftop solar energy is up to par

What is not included in the report is just as frustrating to Pearce and Olson as what is included.

Peirce proposed several amendments and additions to the final working group report that would have looked at distributed generation, such as rooftop solar, and energy efficiency – but the majority of the group voted against those proposals.

The lawmaker said he believed the task force and the legislature failed to create beneficial policies that would encourage rooftop solar or re-establish energy efficiency programmes. Pearce said this is “another huge disappointment.”

If the legislature is really serious about reliability and affordability, Olson said, distributed generation can help strengthen the network by taking some of the burden off. Efficiency can also reduce some energy needs and reduce electricity bills.

The task force’s report recommended looking at different price structures that could help shift peak demand by changing the amount of electricity costs at different times.

Olson said he won’t be able to tell if a bill lowering capacity thresholds is a problem until he sees actual language.

“We want to make sure that going from 30% to 15% will in no way hinder the clean energy transition underway in Indiana and will not delay, through legislation, the retirement of really expensive dinosaur coal plants,” he said. . “I don’t mean at this point that’s what the bill will do, we just don’t know at this point.”

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