By Sarah Bowman

November 20, 2020 - Indiana’s energy future is here. Sort of.

A group tasked with charting a course for how to provide Hoosiers with electricity has embraced and encouraged renewables, but it also wants to keep fossil fuels around to help with what it says is the variability of solar and wind.

Thursday marked the last meeting for the 21st Century Energy Task Force, during which the group approved a final report with findings and recommendations on what the future of electricity service should look like in Indiana.

But there wasn’t a complete consensus: The report passed 11 to 4.

Task force co-chair Rep. Ed Soliday stressed that the report is not binding, and it is up to the Indiana legislature to put it into action.

A Lack of Specificity  

Some key findings and recommendations include:

    - Acknowledging that encouraging renewable energy is important to keep Indiana competitive in attracting and retaining certain businesses.
    - Understanding that renewables are more variable and need other types of energy, such as fossil fuels, to help compensate.
    - Recognizing the need to develop metrics and goals to help ensure reliability throughout the state.
    - Extending the task force for another two years to deal with topics such as energy efficiency, paying for retired coal plants, distributed generation sources like rooftop solar and battery storage.

However, the report did not include:

    - Specific recommendations on what the metrics and goals should be to help maintain reliability.
    - Did not have recommendations related to net metering and rooftop solar, which has a phaseout deadline in the spring of 2021.

Some task force members and stakeholders are concerned about the lack of specificity in certain recommendations — vagueness that they fear is a “blank check” for potentially problematic legislation that would favor fossil fuel generation.

The Indiana General Assembly created the task force during the 2019 legislative session to explore the impact that emerging technologies and a transition away from fossil fuels might have on Indiana. It also was meant to identify policies focused on affordability and reliability of electricity.

The group — which is made up of legislators and governor-appointed experts in the field — met 10 times over the past year and a half, and its report was due by Dec. 1.

All seven of the appointed experts voted to approve the report, after a couple of drafts and multiple changes. For the eight lawmakers, the vote came down along party lines: The four Democrat senators and representatives serving on the task force voted not to approve it.

The crux of the report, authored by Soliday, R-Valparaiso, and the other co-chair Sen. Eric Koch, R-Bedford, includes 17 findings and eight recommendations.

Findings on Renewable Energy

Some findings focused on the need to encourage the deployment of renewable energy technology to stay competitive in attracting and retaining businesses and economic development.

The group Hoosiers for Renewables said it applauded the task force for recognizing that renewable energy can be an economic driver. The Clean Grid Alliance said it was a positive development that the task force wanted to remove certain citing and tax barriers for renewables.

The solar panels on William Harlow's farm in Sharpsville, Indiana, will have native plants underneath it to provide habitat for bees and butterflies.

Photo provided by Emergent Solar Energy

Still, the report said it was important to embrace renewables, while also balancing reliable and affordable energy service.

Other findings pertaining to renewables were a bit more problematic, said some task force members and advocacy groups. The first draft of the report said that renewables were “highly desirable” but were only cost competitive because of “significant” government subsidies, were “significantly less reliable” and that “back-up sources,” such as from fossil fuels, were needed to compensate for that unreliability.

The language of such findings were altered for the final report, after Soliday said that he and Koch received more than 10 pages of comments and suggestions from task force members.

The updated report said that technology advancements have also helped with the cost competitiveness of renewables, and instead said that renewables are “more variable” and their “successful integration” into the energy system includes additional “dispatchable” resources, meaning those that are in constant supply.

Consumer and environmental advocacy groups question the picture the final report paints of renewables.

Jesse Kharbanda with the Hoosier Environmental Council said that “the final adopted report continues to portray renewables technology, from an affordability and reliability perspective, in a skeptical light” even with the latest economic data showing that the resource is competitive without subsidies. He also points to several Midwestern and Plains states that have adopted renewables more broadly than Indiana, and still are able to reliably operate.

“We worry that the Task Force’s renewables-skeptic findings … could pave the way for legislation that would have the effect of slowing the transition from fossil fuel generation to ‘renewables plus storage’ generation,” Kharbanda said.

Soliday told IndyStar that he did not have time to speakwith a reporter due to his schedule. He stressed during Thursday’s meeting that he wanted to emphasize that Indiana’s door is open to renewables.

Maintaining Monopoly System

Another seemingly minor edit was made during Thursday’s meeting, swapping out just one word for another. For Rep. Matt Pierce, however, that swap marked a significant change.

Pierce, D-Bloomington, was concerned about a finding that said Indiana’s current regulatory structure — which is vertically integrated, meaning utilities have a monopoly on the production and sale of power — is “the best” framework to meet Indiana’s goals.

He acknowledged that he didn’t have plans to change that structure, a move that has caused some heartburn in other states. Still, Pierce said he felt the topic had not been discussed enough — if at all — to make such a strong statement that, in essence, he said, locked Indiana into a monopoly system.

Task force member John Graham, a professor in Indiana University’s O’Neill School of Public and Environmental Affairs, echoed Pierce’s thoughts. He suggested swapping out “best” for “workable,” leaving it open for further discussion and potential changes to that framework — an edit that was accepted by the group.  

Writing 'a Blank Check'

Pierce’s bigger concerns came in the recommendation portion of the report, pointing to two in particular. Both urge the Indiana legislature to consider legislation to “create a mechanism … to ensure generation and transmission resource adequacy” throughout the state, and to “set forth statewide specific metrics and goals for reliability.”

Pierce said it is difficult for him to support a recommendation that asks the legislature to do something without outlining what those metrics and goals should be.

“My concern is that someone will author a bill to create this mechanism that they think is best and they’ll say ‘This bill is recommended by the task force, rest assured,’ ” Pierce said during Thursday’s meeting. “You’re essentially asking me to write a blank check.”

The Bloomington Democrat previously told IndyStar he was concerned such vague recommendations could leave the door open to a bill that would favor coal or fossil fuel generation.

Kerwin Olson, executive director of the consumer advocacy group Citizens Action Coalition, said he is having some deja vu.

“The big ticket item, without any question, are these two recommendations,” he said. “The devil will be in the details.”

Olson said that legislation to create a mechanism sounds “an awful lot” like similar and controversial mechanisms that were passed in Ohio and Illinois to “bail out uneconomic legacy power plants.” The laws in Indiana’s neighboring states provided subsidies and credits for utility companies — some on the backs of ratepayers — after determining their facilities should be kept running.

Rep. Ed Soliday talks with a colleague on the starting day of legislative session at the Indiana Statehouse, Indianapolis, Thursday, Jan. 3, 2019.

Photo: Jenna Watson, Indy Star

In response to Pierce’s concerns, Soliday said that legislation has already been drafted on both recommendations.

He said short of getting into specifics, the bill would require the Indiana Utility Regulatory Commission to review data from utilities on an annual basis. If the agency saw “we were falling off reliability, then they could go to the utilities and say something needs to be done,” Soliday said during the meeting. “It has teeth,” he later added.

Pierce said that if there was already specific legislation in the works, he thought that should have been brought to the task force to be discussed. Olson echoed that sentiment, saying he wasn’t sure that wasn’t part of the discussion, adding “it’s that bill that matters a whole lot more than a non-binding report.”

Soliday said the draft legislation is not complete and it’s not an easy topic and that bringing it before the task force was not something he nor Sen. Koch wanted to do.

Some Unresolved Issues

Though this report marks the conclusion of the task force, one of the final recommendations called for its extension for an additional two years until November 2022 to further study several issues.

One is securitization, a practice that helps utilities finance the costs of retiring coal plants early, and maintaining affordability as the state transitions to renewables. Other topics include developing an energy efficiency plan, encouraging research in energy storage technology, understanding the effects of coal plant closures on communities and workers and exploring the growth of distributed generation, such as rooftop solar, which research shows can help with reliability.

Pierce, Olson and Kharbanda, among others, have expressed frustration that these topics — which they say are critical to moving away from fossil fuels in a responsible and effective way — were not discussed more extensively during the current task force.

While they are happy to see they are still on the agenda for future discussion, Olson said their delay feels like a delay for Indiana’s energy transition.  

Pierce asked the task force chairs to consider a recommendation for legislation that would put a pause on SEA 309, a 2017 law that phased out the net-metering incentive for solar customers. Under that law, utilities have to file for their new rate structures for solar customers by March 1, 2021.

Pierce argued that because the task force is not going to start discussing distributed generation and net metering until next summer, that it would be too late. He said the state should keep the status quo until the extended task force can take a closer look. Co-chairs Soliday and Koch dismissed Pierce’s suggestion.

Soliday did say during Thursday’s meeting that even though distributed generation is listed for the next task force, he said any lawmaker can propose legislation on this or any of the other listed topics during the upcoming legislative session.

Whether it would be heard is a different story. Soliday chairs the Utilities Committee in the House and Koch will likely chair the Senate counterpart, after previous chair Sen. Jim Merritt retired this year.

During Organization Day, the ceremonial start of the 2021 legislative session this week, Speaker of the House Rep. Todd Huston, R-Fishers, outlined various priorities for the session. Recommendations from the Energy Task Force were one of them.