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POLITICS

Energy-saving program may be switched off

John Russell
john.russell@indystar.com

The new light bulbs in Kathy Burkhart’s kitchen still shine brightly, 18 months after an energy auditor visited her house on the Far Westside and suggested she try them.

Upstairs, the shower feels fine, even after the auditor turned down the temperature on the water heater a few degrees and changed the shower head to an energy-saving model.

But the best feeling of all, Burkhart said, is opening her electricity bill from Indianapolis Power & Light Co. It’s about $20 less a month than it used to be.

“I’m saving over $200 a year, not to mention helping the environment, so I think it’s a great deal.”

In the past two years, energy auditors have visited more than 200,000 homeowners, schools and businesses to hand out light bulbs, haul away old energy-gobbling refrigerators, examine air conditioners and suggest other ways to save energy and money. Utilities also offer rebates to customers for getting rid of old appliances and replacing them with more efficient ones.

But it could all end in this year.

Some lawmakers, manufacturers and utilities say the program, paid for by monthly fees on electricity bills, is too expensive and the benefits are too questionable. They want to shut down the two-year program, known as Energizing Indiana, on Dec. 31.

A bill that would end the program is scheduled to come for a vote Monday before the Indiana Senate.

The bill has alarmed an array of consumer and environmental groups — and even some business interests. They say it would dismantle the flagship clean-energy program in a state not known for supporting green causes.

The Rev. Wyatt Watkins, pastor of First Baptist Church of Cumberland and a member of the board of Hoosier Interfaith Power & Light, said Energizing Indiana’s lighting rebate program helped his church install efficient lighting that “spectacularly reduced” electric bills.

It also upsets energy contractors who participate in the program. They say their services have saved Indiana customers millions of dollars and created hundreds of jobs.

Energizing Indiana was launched two years ago by then-Gov. Mitch Daniels as a way to save energy and clean the air. The mandate was to produce energy savings of 2 percent a year by 2019, which would help customers save money and reduce the need to build additional power plants.

But some lawmakers don’t like that they didn’t have a say in setting up the program or overseeing it. They say it’s too costly for many big manufacturers and that it hurts the state’s efforts to attract new companies.

Some steel mills, for example, pay more than $10 million a year, or about 2 percent of their energy costs.

Some factory owners say they get little in return, because many of the efficiency services are one-size-fits-all, while their factories are specially designed. They say they have their own energy conservation plans to help them keep down costs.

The typical homeowner pays much less — about $2 or $3 a month — to fund the program. Altogether, it generates hundreds of millions of dollars a year, which is used to contract with energy companies that visit homes and businesses and offer services and energy-saving products, typically at no extra cost.

“We want to study this more, understand exactly what this program is all about, because we had no voice,” said Sen. Jim Merritt, R-Indianapolis. “This was all by executive order and rule. We want to know if it’s worth it or not.”

Merritt introduced a bill in January with a simple aim: to exempt large users of electricity, such as factories, from paying the big monthly fees that support the program. The original bill passed the Senate 37-11 with the support of the Indiana Manufacturers Association, the Indiana Cast Metals Association and the Indiana Chamber of Commerce.

But when the bill got to the House of Representatives, it took a big bounce. Rep. Heath VanNatter, R-Kokomo, introduced an amendment that would shut it down altogether. He said the money assessed and spent on the program — nearly $2 billion through 2019 — required more study. Supporters acknowledge the figure is large but say it would save more than twice as much in energy costs.

The amendment passed by a wide margin, and so did the bill, to the surprise of environmentalists, who say they have never seen a bill take such a sharp turn without public hearings and careful study.

“Suddenly we’ve got this freight train of a bill that’s coming straight at us and will wreck energy efficiency in Indiana,” Jodi Perras of the Sierra Club’s Beyond Coal campaign said during a rally at the Statehouse last week.

The amended bill is now back before the Senate, where Merritt says he will go along with the House changes. He describes the bill as a moratorium, not an end to Energizing Indiana, and says the program could be revived after more study, although the bill does not include any language that would restore the program.

Powerful groups are lining up on both sides and pushing hard.

Groups that support the amended bill also include the Indiana Energy Association, which represents five investor-owned utilities.

“I think the program has benefits, but going forward, the costs will far exceed the benefits, because the low-hanging fruit has already been picked,” said Ed Simcox, president of the utility trade group. “When you have to save 2 percent every year, the metrics get harder and harder to achieve.”

But not all big businesses are for the change. A coalition of energy-related businesses, including General Electric, Honeywell and Johnson Controls, last week sent a letter to legislators and Gov. Mike Pence, urging them to save the program.

“Reductions in industrial manufacturers’ energy use through energy efficiency programs should be encouraged by everyone,” the letter said. “These programs cut waste and are a fiscally responsible way to address the state’s energy needs.”

They also point out that ending the programs would eliminate nearly 400 jobs, plus 1,200 indirect jobs and more than $500 million of economic investment in energy efficiency work.

Many of those were created at companies such as JACO Environmental. In the past two years, the company has hauled away from Indiana households 26,000 old refrigerators and freezers that use three to four times more electricity as new appliances do. Sam Sirkin, a program development officer at JACO, said that has helped save Indiana customers about $3 million a year.

“This is a terrific program that has benefited tens of thousands of people, at least,” he said.

Environmentalists and citizens groups say that even though the program costs money, it has saved enough energy each year to power 64,000 homes. They say that helped save more than $80 million in energy costs in 2012. By comparison, the cost of building a new power plant is billions of dollars — costs that ratepayers have to pick up.

“Utilities have an interest in selling more electricity,” said Kerwin Olson, executive director of Citizens Action Coalition of Indiana. “We think most people want to save electricity and support this program and want it to continue.”

Call Star reporter John Russell at (317) 444-6283. Follow him on Twitter: @johnrussell99.