HB 1414 – Retirement of Electric Generation Facilities
Authored by Rep. Ed Soliday (R-Valparaiso)
Sponsored by Sen. Mark Messmer (R-Jasper) and Sen. Eric Koch (R-Bedford)
This bill (as sent to the Senate) would prohibit a public utility from shutting down a legacy power generation resource in which the public utility has an ownership interest unless the public utility provides the Indiana Utility Regulatory Commission (IURC) with at least three years advance notice of the termination. The bill requires the IURC to conduct a public hearing to receive information concerning the proposed change in generation and to issue findings and conclusions regarding the proposed shutdown, transfer or sale of the generation. The bill also provides that a public utility is entitled to recover the cost of not more than 90 days of reserve fuel supply. In addition, the bill provides that in awarding high value workforce ready credit-bearing grants, the Commission for Higher Education, in conjunction with the Department of Workforce Development, shall give priority to an applicant who is a dislocated coal mine employee.
Chamber position: Support (as amended)
The latest: The bill was heard in the Senate Utilities Committee on Thursday. The committee chair, Sen. Jim Merritt (R-Indianapolis), offered amendment #8 (there were 10 amendments listed on the agenda). This amendment deleted the language that allowed a public utility to recover as a fuel adjustment charge the cost of up to 90 days of reserve fuel supply. It also deleted the bill’s requirement that a public utility that owns and operates a reliable capacity electric generation resource must operate and maintain the unit in a manner reasonably intended to secure the availability of the unit for dispatch and for providing reliable service to customers of the public utility. It provides that a public utility may not retire, sell or transfer a reliable capacity resource with a capacity exceeding 80 megawatts unless it is consistent with the public utility’s preferred portfolio in the public utility’s most recent integrated resource plan (IRP) and the public utility has made a reasonable effort to comply with specified Indiana administrative rules regarding IRPs.
The amendment also deletes provisions requiring the IURC to hold a public hearing and issue findings and recommendations regarding the retirement, sale or transfer of a plant with a capacity exceeding 80 megawatts. It changed the effective date from upon passage to July 1, 2020, and changed the expiration date of the bill from May 1, 2021 to December 31, 2020. Senator Koch also introduced amendment #6, which replaced language giving priority to dislocated coal mine employees in the awarding of high value workforce ready credit-bearing grants with language giving priority to an individual who is laid off or terminated from the individual’s employment at a commercial coal mine, at a coal-fired electric generating unit or an Indiana based manufacturing or transportation supply chain serving a coal mine or a coal-fired electric generating unit in Indiana. Both of these amendments passed by consent of the committee and the amended bill passed by a vote of 8-2. The bill is eligible for further action (second reading) in the full Senate next week.
Indiana Chamber action/commentary: We testified in support of the amended bill and noted our opposition to the bill as it came out of the House. The amended Senate version is much better than the bill that passed out of the House. The biggest thing that the legislation does is help train/retrain displaced workers for other jobs due to the shutdown of a large generation facility. The potential for increased rates due to large amounts of fuel being stockpiled was eliminated. The potential to interfere with the utilities’ ability to make sound utility business decisions was also eliminated by requiring that a utility’s IRP be used as a guide for generation decisions. All affected parties are allowed to participate in the existing IRP process. The effective date of the bill (July to December 2020) will allow for the results of the Chamber’s forthcoming energy study and the recommendations of the 21st Century Energy Task Force to be taken into consideration before any significant energy legislation can be rolled out in 2021. This bill is destined for conference committee if it passes out of the Senate.
Resource: Greg Ellis at (317) 264-6881 or email: [email protected]