Bill to Slow Utilities From Shutting Coal Plants Advances in Indiana Legislature
By Meredith Colias-Pete
January 24, 2020 - In Indiana, a bill to slow power companies from closing coal-fired plants passed Wednesday, a move critics said was designed to stall any transition to cleaner energy sources.
The bill was changed Wednesday to expire after a year, in July 2021. It passed 9-4 to advance, along party lines.
This March 4, 2017, photo shows a hyperboloid cooling tower at the Michigan City Generating Station, a coal- and natural gas-fired power plant. Northern Indiana Public Service Company plans to close the Michigan City plant by 2028.
Photo: Michael Zajakowski, Chicago Tribune)
Nearly three-dozen people signed up to testify, its sponsor Rep. Ed Soliday, R-Valparaiso, said. During the three-hour House Utilities Committee hearing, nearly only coal industry lobbyists supported the bill.
Soliday sponsored the proposal last week, which says an electric provider “may not retire, sell, transfer, or terminate a lease” without going before a state regulatory commission and proving it was in the public interest or justified under a federal mandate. Since taking office, the Trump administration promised to help revive the lagging U.S. coal industry.
That bar wouldn’t be met, if Indiana was not involved in a federal consent decree — i.e. agreement — that led to a plant’s closure, the U.S. Environmental Protection Agency says the plant should close, or the utility has its own “interpretation”, the bill states.
Soliday said his proposal was not meant to prop up the coal industry, rather giving a one-year break to ensure Indiana can guarantee a reliable electric grid as it shifts to other energy sources. He heads a state energy task force and wants to complete its report to Gov. Eric Holcomb by December.
“It is not a bill to make coal last until the second coming,” he said.
Critics said electric companies are already planning for the switch to natural gas and other cleaner sources of power, adding the coal industry was trying to “manufacture a crisis.”
State Rep. Matt Pierce, D-Bloomington, on Thursday released a statement about the bill.
“The House Republicans have manufactured a crisis to justify protecting the coal industry from less expensive and cleaner forms of energy, and they are doing it at the expense of every Hoosier who pays an electric bill,” Pierce said. “Rather than embracing a clean energy future, they have chosen to reward a special interest by clinging to the past. For a party that professes to support free markets, it is very curious that they would want to interfere with the marketplace at the expense of more competitive forms of energy.”
Coal was a cheaper energy source that was needed to maintain grid reliability as Indiana looked at other options, several industry representatives said.
“It’s typically less expensive to keep the car that you have,” said Michelle Bloodworth, President and CEO of the Washington D.C.-based group, America’s Power, one of a handful who spoke on behalf of the Indiana Coal Council.
The move could likely raise prices for consumers, while interfering in market forces, said Jared Noblitt, executive director of Indiana Conservative Alliance for Energy.
But, 90 coal miners were facing pink slips, said Rep. Alan Morrison, R-Brazil, adding Indiana’s economy would take a hit without coal.
“It’s going to be a dumpster fire,” he said.
Other opposition came from unlikely bedfellows — a cross section of environment, consumer groups, the Indiana Chamber of Commerce and Indiana Industrial Consumers Energy, which represents companies including ArcelorMittal, BP, and Eli Lilly.
“We have sent a pretty negative signal about clean energy,” said Jesse Kharbanda, executive director of the Hoosier Environmental Council. “This bill further sends that negative signal by saying we are going to favor this one aging sector.”
Such a proposal could have far-reaching effects in Indiana, where 69% of its net electricity was generated by coal in 2018, only second in the U.S. to Texas, according to the U.S. Energy Information Administration.
The Northern Indiana Public Service Co., announced last year it plans to shutter all of its coal-fired plants by 2028, moving to cheaper sources including solar, wind, other various renewables and electricity bought off the grid.
Those plans include retiring the R.M. Schahfer Generating Station (Units 14, 15, 17 and 18) in Wheatfield by 2023 and its Michigan City Generating Station (Unit 12) by 2028.
NIPSCO President Violet Sistovaris said again recently it was a cost-cutting move that could save an estimated $4 billion rather than a decision driven by environmental concerns.
“We are continuing to monitor the activity around this proposed bill to understand its intent and any potential impacts to our customers and the company if it moves forward,” spokesman Nick Meyer said Wednesday.
Favoring coal could lead to higher customer rates, Kerwin Olsen, executive director of Citizens Action Coalition said Wednesday. The Indiana Utility Regulatory Commission’s role is to look at customer’s electric rates, not business decisions, like the cost factors to close a coal-generated power plant, he said previously.
“I’ll I’ve heard is, ‘We don’t pick winners and losers’," he said Wednesday. “We like the markets.”
Last session, Soliday sponsored an unsuccessful bill to temporarily stop the construction of new power plants. Other Indiana utilities, including Indianapolis Power & Light Co., Duke Energy, Hoosier Energy and Vectern Corp., have announced plans to retire some coal plants.
Soliday has received $4,000 from coal interests since 2017, according to state records. That includes two $1,000 contributions in November from Alliance Coal PAC and Sunrise Coal, LLC.
Last year, Scott Pruitt, the scandal-ridden former head of the EPA, registered as an energy lobbyist in Indiana as fossil-fuels interests are fighting to block the proposed closure of several coal-fired power plants.
A report commissioned by Olsen’s group last fall noted 82% of Indiana’s coal plants are 30 years or older and will likely face expensive repair and upkeep costs, according to the Arlington, Massachusetts-based Applied Economics Clinic.
The report concluded Indiana could save more money by skipping those repairs by moving sooner directly from coal to renewable energy sources, analyst Bryndis Woods said in November.
NIPSCO itself is an EPA-held responsible party for the Town of Pines Superfund site, outside Michigan City where toxic coal ash put in a landfill leaked into local water wells.