Ind. coal ‘bailout’ heads to governor’s desk

Source: By Jeffrey Tomich, E&E News reporter • Posted: Wednesday, March 11, 2020

An Indiana bill aimed at slowing the retirement of coal-fired power plants in the state is headed to the desk of Gov. Eric Holcomb (R) after the General Assembly passed the controversial measure last night.

The state House and Senate passed H.B. 1414 in separate votes. The bill would require utilities to get approval of state regulators before they shut down a power plant.

Yesterday’s vote is the extension of a debate that began a year ago in Indiana, a major coal-producing state, as utilities there began planning to shut down thousands of megawatts of aging coal plants in favor of cleaner, cheaper fuels.

The Legislature last year rejected a proposed moratorium on power plant closures and instead voted to form a 21st Century Energy Policy Development Task Force to study the state’s energy policy and make recommendations by the end of 2020.

But House Republicans led by Rep. Ed Soliday, chairman of the House Utilities, Energy and Telecommunications Committee, said they feared the transition away from coal was moving too quickly and proposed H.B. 1414 to serve as a “pause” on plant closures while the task force continues its work (Energywire, Jan. 16).

Opponents have argued that the bill is nothing more than a “bailout” of the coal industry, the only group that supported it.

The bill “is the fourth major piece of legislation over the last decade adopted by the Indiana General Assembly in which the legislature has expressed a preference for an out-of-date vision for our energy system,” Jesse Kharbanda, executive director of the Hoosier Environmental Council, said in a statement. “We worry about how legislation like HB 1414 impacts the reputation of Indiana.”

The Senate adopted the bill 28-21 in spite of opposition from Sen. Jim Merritt (R), the chairman of the Senate Utilities Committee, who said the measure would lead to the “bureaucratic expansion” of regulatory review that could raise costs for consumers.

Merritt said the bill is unnecessary because Indiana utilities already submit long-range integrated resource plans for how they will manage their power plant fleet to the Indiana Utility Regulatory Commission on a rolling three-year basis.

The Midcontinent Independent System Operator, which runs the bulk power grid in the Midwest, also reviews planned plant closures to ensure they won’t lead to transmission-related reliability problems. MISO can order plants to stay online if needed.

Backers of H.B. 1414 said the commission’s process for integrated resource plans isn’t binding and that utilities can alter plans, including shutting a plant, at any time.

They also said two provisions in the original version of the bill that raised concerns among utilities and large industrial energy users were stripped out in the final version.

One of those provisions would have allowed utilities to recover costs for maintaining a 90-day supply of coal at a power plant instead of the current 45-day supply.

Another provision removed from the bill could have required utilities to make expensive repairs at coal plants that the companies intended to retire.

It generally takes several days for a bill passed by the Legislature to reach the governor’s desk, after which Holcomb will have seven days to sign or veto it. The bill becomes law if he does neither.

Holcomb has been silent on the issue so far. His spokeswoman, Rachel Hoffmeyer, said in an email that the governor plans to review the bill.