OPEN LETTER TO GOV.
MIKE PENCE: STOP THE ASSAULT ON HOOSIER CONSUMERS AND JOBS, OPPOSE SB340
The Honorable Mike Pence, Governor of the State of Indiana:
Senate Bill 340 (Demand Side Management Programs) is working
its way through the State's legislative process, currently on second reading in
the House of Representatives.
The bill in its current form promises to eviscerate energy
efficiency in Indiana, lead to the loss of hundreds of Hoosier jobs, stifle
additional and significant private sector investment in our communities, and
cause unnecessary and potentially significant increases to the already
escalating utility bills of Hoosier businesses, consumers and taxpayers.
Representing over 40,000 residential ratepayers in our great
State, Citizens Action Coalition of Indiana respectfully requests that you
protect Hoosier ratepayers and jobs by opposing SB340 and taking a strong
position against this harmful piece of public policy. Please urge the
General Assembly to slow down and consider the harmful effects of rushing this
bill through a short legislative session. Instead, lawmakers should look
into the costs and benefits of
these programs through an in-depth summer study committee which should include
all interested parties.
The current energy efficiency/DSM programs are
working. Launched in January 2012, these programs are in their
infancy. With just one year of verified data available, the programs are
already having a positive impact on Hoosier ratepayers. The State Utility
Forecasting Group (SUFG) projected significant reductions in future load growth
versus what had previously been forecasted, citing investments in energy
efficiency as the primary driver causing this decline. This reduction in
demand will save Hoosier ratepayers billions of dollars by avoiding the future
costs of expensive new generation facilities.
By allowing Big Business to "opt-out" of
participating in Indiana's successful energy efficiency/DSM programs and to not
pay into the fixed costs of those programs, SB340 will unfairly discriminate
against other classes of ratepayers, causing the electric bills of everyday,
hard-working Hoosiers and small businesses to increase. Energy
efficiency is a "resource" for the utility system—just like a
power plant. No customer or group of customers would be able to refuse to
pay for a new power plant. Instead, all customers must pay.
Similarly, all customers should pay for the energy efficiency resource.
And, because industrial customers consume almost half of all
energy used in Indiana, excluding
them from the program would mean that an enormous amount of very cost-effective
energy efficiency resources would not be realized ... and much more expensive
supply resources would have to be purchased for the utility system.
At 2 to 4 cents per kWh, energy efficiency is about one-third the cost of
electricity from a new power plant (i.e., 8 to 12 cents per kWh), and
industrial energy efficiency is the cheapest energy efficiency of them all.
Taking that resource off the table goes against Indiana's law mandating public
utilities to provide their customers with the lowest cost resource that is
reasonably possible. Energy efficiency is the quickest path to reducing
energy costs and the cheapest kWh of electricity we can generate. It is
counterintuitive to work towards reducing electric rates by eliminating energy
efficiency. SB340 will achieve the exact opposite of its stated goal.
On the campaign trail in August of 2012, you announced a new
energy policy in which part of the stated intent was to "to maintain
low-cost energy and improve environmental health for Hoosiers." Under
your direction, the Office of Energy Development is now creating that new
energy plan for our State in which you tasked them with pursuing an "'all
of the above' energy mix."
If SB340 becomes law, Indiana will not maintain
low-cost energy, because the cheapest energy resource would become
unavailable to serve the needs of captive Indiana ratepayers and the overall
cost of the energy efficiency resource will be much higher than
If SB340 becomes law, the environmental health of Hoosiers will
not be improved, because electricity demand will unnecessarily increase,
leading to more expensive power plants and more emissions from fossil-fuel
generation facilities – dirtying the air we breathe, the water we drink,
and the soil in which we cultivate our crops.
If SB340 becomes law, any new State energy plan would
not include an "'all of the above' energy mix"—instead, the
least cost resource we have will be off the table.
If your administration also intends to increase private
sector investments and jobs in Indiana, do not remain silent on SB340 as it
will kill hundreds, if not thousands, of current and future jobs in our
State. Here are just some of the companies currently investing in our
State as a result of Indiana's energy efficiency/DSM programs and providing
high-quality jobs to Hoosiers: Honeywell, Lockheed Martin, Navigant, Good
Cents, CLEAResult, Franklin Energy, Wisconsin Energy Conservation Cooperation,
JACO, and Ecova.
We appreciate the claimed intent of the
legislation—electric bills are becoming unaffordable in Indiana, and all
ratepayers need relief. However, energy efficiency/DSM is not the
problem; it's the solution. The sooner we embrace energy efficiency
as the preferred resource for our State, the sooner Indiana will realize the
substantial economic and environmental gains that energy efficiency can
Lastly, CAC was invited by your administration to
participate in the stakeholder collaborative process and assist in crafting the
new State energy plan. We accepted this honor and sincerely appreciate
the inclusive approach your administration has taken. We have found those
we have worked with in your administration to be knowledgeable, sincere, and
thorough. We are hopeful that this constructive and thoughtful approach
your administration has taken to date also includes a discussion with the
members of the Indiana General Assembly and ultimately weighing in on SB340.
SB340 is contrary to your stated campaign and gubernatorial
objectives. Please protect Hoosier ratepayers and jobs by standing by
your campaign promises and taking a strong position against SB340.