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Mike Pence
Indiana Governor Mike Pence (AP Photo by Darren Cummings)

Pence allows energy-efficiency repeal to become law

A controversial bill to repeal several energy-efficiency programs became law Thursday without the governor’s signature.

Indiana Gov. Mike Pence said late Thursday he’s “disappointed” the Indiana General Assembly killed the state’s fledgling energy efficiency program without creating any alternative, but declined to veto the measure.

That means programs to weatherize homes, and rebates for businesses that install energy-efficient equipment, will cease at year’s end.

The bill survived a push organized by several business interests aligned with energy efficiency. Leaders at the businesses signed a letter this week, asking Pence to veto the bill.

General Electric, Ingersoll Rand, Johnson Controls, Siemens, Honeywell and United Technologies were among the businesses signing the letter, according to a story Wednesday in The Times of Northwest Indiana. The signatories said the legislation jeopardizes 10,000 manufacturing and efficiency jobs in Indiana.

By the end of the business day Thursday, Pence had signed every bill sent to his desk by the Legislature, with the exception of the energy efficiency repeal, raising hopes by utility consumer advocates he might veto the bill.

But at 8:39 p.m. Pence’s office sent out a press release, indicating he would allow the repeal to take place without his signature.

“I could not sign this bill because it does away with a worthwhile energy efficiency program. I could not veto this bill because doing so would increase the cost of utilities for Hoosier ratepayers and make Indiana less competitive by denying relief to large electricity consumers, including our state’s manufacturing base,” Pence said in the statement.

State Rep. Heath VanNatter, R-Kokomo, authored the repeal, saying he believed there were numerous problems with the program and didn’t believe the program is as effective as advocates claim.

He also criticized social service agencies for pushing the program, saying they receive funding for every individual they refer to the state’s home weatherization program.

Advocates, including the Citizens Action Coalition of Indiana and the Sierra Club, said independent studies show every dollar invested in the state’s “demand-side” energy programs will result in two dollars saved, mainly through reducing the need to build more power plants.

“In a study released last year, Purdue University’s State Utility Forecasting Group predicted that Indiana’s energy efficiency program will save 1,800 megawatts in peak energy demand by 2022,” the Sierra Club said in a statement late Thursday. “These savings would avoid the need to build 2.5 power plants the size of the Harding Street Power Station on the south side of Indianapolis.”

Many of the energy efficiency programs fall under the banner of Energizing Indiana, a program funded by surcharges on utility bills.

The Indiana Office of Utility Consumer Counselor and other groups had long lobbied for demand-side measures during the approval processes for new power plants in the state, arguing approvals for new plants should be offset by investments to reduce future energy demands.

Energizing Indiana provides home energy audits, weatherization and rebates to industrial and commercial facilities for installing energy-efficient equipment.

The bill, which was amended late in the legislative process by the Indiana House, started as an attempt to allow large industries to opt out of demand-side management. The chairman of the Senate Utilities Committee, Jim Merritt, R-Indianapolis, said businesses had complained about funding the program when they already have significant incentives to reduce their own energy demand.

When the bill reached the House, VanNatter proposed simply ending the program altogether, and the amendment passed with little discussion.

“If you want to change the program, study it and make recommendations. Send it to committee, and take public comment. You don’t offer it as a second reading amendment, with no dialogue, no committee vote. It’s just astounding,” Citizens Action Coalition director Kerwin Olson said after the House amended the bill.

Pence indicated he wants the program brought back, in a revised version similar to what Merritt intended with the original bill.

The governor said he’s directing the Indiana Utility Consumer Counselor’s office to “immediately begin to develop recommendations for a new energy efficiency program that would include an opt-out for large electricity consumers.”


Scott Smith is on Twitter, @JasonSSmith1, and can be reached at scott.smith@kokomotribune.com

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