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Pence must halt bill undermining energy efficiency

Gov. Pence: Veto SB 340

The arguments for doing so in the Energizing Indiana program are myriad and, on the surface, persuasive.

The challenges of energy conservation in Indiana have changed, we’re told, even in the short time since the state program to help individuals and companies conserve electricity began in 2012.

The program, created by the Indiana Utility Regulatory Commission with the support of then-Gov. Mitch Daniels, is funded through six Indiana utilities, including Indiana Michigan Power.

Under contract with the utilities, private energy auditors fan out to residences, industries and institutions to suggest ways to cut electricity use.

By such simple fixes as turning down water-heater temperatures, using more efficient light bulbs and upgrading refrigerators, Energizing Indiana seemed to be on the road to significant inroads in the state’s energy usage.

The need for special strategies to curb energy use here was obvious when Indiana’s energy consumption was particularly high and prices not particularly so.

But now, though Indiana still ranks ninth among the states for energy consumption per capita, energy prices here are rising and use is leveling off. The Purdue University State Utility Forecasting Group predicts that electricity rates will rise 32 percent in the next decade. Those higher costs will help drive down use.

When, after its first year, it developed that the utilities had not spent some of the money they’d collected for the program from their customers, there was concern that Energizing Indiana’s goals had been set too high, too fast. And attention has swung to the cost of Energizing Indiana, which adds $2.03 a month to the average residential electric bill and millions of dollars to many industries’ energy budgets.

Ed Simcox, president of the Indiana Energy Association, argued in an Indianapolis Star piece last week that the “ ‘low hanging’ fruit” efforts to increase energy efficiency have already been harvested, and the next steps will be more complex and costly.

That is undoubtedly true. There are only so many refrigerators to upgrade, only so many pipes that can be wrapped with insulation.

But none of this justifies SB 340, which the legislature sent to the governor earlier this week. If it becomes law, the measure will stop Energizing Indiana dead in its tracks. Its backers call it a “pause” to reassess the conservation efforts’ strategies and costs.

Pauses, though, have a way of becoming permanent. And the needs that Energizing Indiana was intended to address haven’t gone away. Air pollution is still a problem in Indiana, and the state’s urge to conserve energy will only be more acute when prices are even higher.

Energizing Indiana’s efforts have hardly been a fiasco. According to the Sierra Club, an independent study concluded that Indiana utilities “saved two dollars for every dollar spent on ‘demand-side management’ programs.” For industries, the club said, the savings have been even higher: $3.19 for every dollar spent. And the program has helped motivate utilities to get serious about the energy-saving game.

Tracy Warner, a spokesman for I&M, stresses that the decision on SB 340 is up to state policymakers, but that I&M “will continue to offer energy-efficiency programs” even if the state program ends.

Why the rush, though, to abandon a program that seemed so essential only a couple of years ago? Rather than do such a hasty about-face on such a crucial issue, Pence would be wise to veto SB 340 and direct the IURC to make some adjustments in Energizing Indiana’s strategy. Then the legislature can revisit the issue during its longer 2015 session.