For AEE, an Indiana Legislative Session with Real Progress and Minimal Setbacks

In a blink of an eye, AEE Indiana ran through the finish line of the 2021 legislative session of the Indiana General Assembly at the end of April, and we’re just now catching up. While in the past two sessions we mostly  played defense, working to stop coal bailouts and moratoriums on plant closures. But this session the advanced energy industry got an opportunity to go on offense, with several bills that we favored making it to the Governor’s desk. We still had to temper a last minute Hail Mary from the Coal Council, which would have hindered utility efforts to move beyond coal, but overall the pros outweigh the cons in 2021. Here’s a rundown of where we ended up on our priority issues at the end of the Indiana legislative session.

Electric Vehicles:

HB 1168, authored by Rep. Michael Karickhoff (R-Kokomo) establishes an electric vehicle product commission, which would expire in 2026, with reports due to the legislature no later than September 30 each year until then. It has been signed into law by Governor Holcomb. The purpose of the commission is to:

• Evaluate the inventory of existing electric vehicle product facilities and production capabilities
• Evaluate the inventory of skilled and unskilled workers in the electric vehicle product industry
• Evaluate opportunities and needs for training within the electric vehicle product industry
• Determine if training centers promoting careers in the electric vehicle product industry should be created or transitioned from traditional automotive training centers
• Identify existing manufacturing competencies within the traditional automotive industry and determine how the existing competencies could be leveraged to increase the production of electric vehicles
• Identify and evaluate opportunities for growth within the electric vehicle product industry

Siting:

Rep. Ed Soliday’s commercial wind and solar standards and siting bill, HB 1381, was one of the most controversial bills of the session – and AEE was on the front lines supporting the legislation. At the beginning of the legislative session, Speaker Huston said that it was one of the most interesting bills of the year because of all the areas of policy that it touched – home rule, energy costs, and local control – and the bill won approval of the House. In the Senate Utilities Committee, however, it was amended significantly (47 pages), changing the bill from a mandatory statewide policy to recommendations. But even that was not enough to satisfy the opposition. Sen. Mark Messmer, a co-sponsor,  gave a short speech stating that working with county officials on the bill was the equivalent of being a hostage negotiator with a schizophrenic: he gave local authorities everything they asked for, and they still shot the hostage. And that was the end of the bill for the session. 

Securitization:

Sen. Eric Koch’s SB 386 (cost securitization for electric utility assets) passed Third Reading in the House unanimously, and the Senate concurred with the House’s amendments unanimously as well. AEE testified in support of the bill in committee, stating that it allowed utilities (here in a pilot project) to have a tool to soften the blow of generation transition by bonding stranded asset costs while avoiding ratepayer increases. We also held our annual Energy 101 Event on the topic of securitization, featuring Senator Koch. AEE worked closely with CenterPoint Energy on this legislation and gave multiple interviews to the IndyStar on the importance of this legislation. Governor Holcomb signed the bill into law on April 19.

Reliability:

HB 1520, Rep. Soliday’s electric utility reliability adequacy metrics bill, passed unanimously on every vote that was taken (in committees and on the House and Senate Floors). This legislation came out of the recommendations from the first two years of the 21st Century Energy Policy Development Task Force (see below). The Governor signed it into law on April 21. 

21st Century Energy Policy Development Task Force: 

HB 1220, which re-establishes the 21st Century Energy Policy Development Task Force for another two years, has been signed by Governor Holcomb. Most of the concern around the bill came from Democrats, who feel that Democrats will not be adequately represented (the House only concurred with the Senate’s version of the bill on a vote of 55-24). The Task Force has been asked to study:

• The management of stranded utility assets, including securitization, and
• The establishment of an annual reporting requirement that would require cooperatively owned power suppliers to annually report information regarding stranded costs to the IURC
• Methods to assure fairness to all customers classes in retail electric rate structures, including alternative rate designs
• Appropriate regulation of the deployment of distributed energy resources
• The impact on communities of utility plant or fuel source site closures
• The status of energy efficiency efforts in Indiana, and the potential development of a statewide energy efficiency plan
• Energy issues affecting low income communities and communities of color
• The potential use of green zones or energy investment districts

As a reminder, the Task Force was created in statute in 2019 for a two-year term to study and create a potential statewide energy plan. It was decided after two productive years that this needed to be a longer-term project, as the Task Force was only able to scratch the surface of important energy policies. The legislation this year extended the Task Force for two additional years and there is a stronger focus on advanced energy policies to be studied. AEE is very happy with the issues to be studied over the next two years and will be working with legislators and leadership on ensuring that AEE’s voice is well-represented before the Task Force. 

Others:

HB 1348, Rep. Soliday’s assessment of utility grade solar projects legislation, was also signed by the Governor. This bill came as a result of the Task Force, where solar developers said that not having a reliable tax rate kept them from doing business in Indiana. The language landed at taxing at the industrial utility rate with certain provisions, and also provided assurance that  if you have a deal already on the books it is good until the next tax cycle.

HB 1180, authored by Rep. Alan Morrison (R-West Central Indiana), would have required the public retirement system to divest from businesses that engage in action or inaction to penalize, inflict economic harm on, or otherwise limit commercial activity with companies invested in or assisting in the production of or manufacturing of certain carbon based or nuclear products. The bill was heard in committee but not voted on before the deadline.

SB 373 (Carbon credit market, carbon sequestration, and federal mandates): This bill made it through most of the legislative session without any language that AEE cared about. After moving through both the Senate and House Natural Resources Committees it was surprisingly reassigned to the House Judiciary Committee, which caused us to pay more attention. Here, language regarding federal phaseout mandates was added, with the purpose of the state considering the impact of coal plant closures in IRPs and other regulatory matters. Acting with a coalition, we worked with Chairman Soliday on a proposed amendment that softened the language enough for AEE to move to neutral. The bill got hung up due to other issues but the federal phaseout mandate language moved to HB 1191 (see below) during the final hours of legislative session.

HB 1191, Rep. Jim Pressel’s (R-Rolling Prairie) bill on local authorities’ power to prohibit utility connections, passed the House Utilities Committee 9-4 and the full House 66-28. AEE did not take a position on this bill until the federal phaseout mandate language was added in the last hours of the session. With the softened federal phaseout language included, the bill passed the legislature and was signed by Governor Holcomb. 

Also of note, SB 383 was authored by Senator Holdman. A various tax matters bill, language was inserted into this omnibus legislation that would provide for a sales tax exemption for a utility battery scale energy storage system. This legislation passed and was signed by the Governor into law.

While we hit a speed bump with the statewide siting bill, we really were able to move significant renewable energy policy forward this legislative session. Coal was rarely mentioned until the last remaining hours of session, and we successfully worked with stakeholders to lobby for softened language on the mandated federal phaseouts. We look forward to a well deserved rest but will be working with legislators in the coming weeks to begin planning for 2022!

For the latest advanced energy employment data in Indiana and 13 other states, click below. Maps of jobs county by county are also available for these states.