It feels like every day there is a new request to raise electric rates or a new report on how much utility costs are growing. It’s become crisis level, and I consider it even more important than the debate over property taxes.
A recent NPR article said across the country, electricity prices have jumped more than twice as fast as the overall cost of living in the last year.
So, who’s to blame? If only it were that easy. There is no one culprit — instead it’s a handful of factors all colliding to create the highest summer bills I have ever seen. And that’s with a vigilant husband who controls the thermostat.
First, I’ll talk about what I have seen firsthand: lawmakers giving utilities more freedom each year to recoup costs from ratepayers and protect shareholders over consumers. I understand some of the requests from utilities, but customers never seem to win in the discussion.
These so-called trackers allow utility companies to adjust rates for specific costs outside of a normal base rate case before the Indiana Utility Regulatory Commission. For instance, Hoosier power companies can recover costs related to transmission, distribution and storage system improvements. But there are many others.
That means that part of my bill is paying to upgrade an aging infrastructure. Think about it like you having to replace your roof after 30 years. But in personal finances you save for that — something utilities clearly haven’t done.
Hoosiers also haven’t fully embraced all forms of power. From coal and natural gas to solar and wind, all can add to the reliability and affordability of power in Indiana. But in some cases, legislators have limited or outright banned incentives or designations for renewable options. Instead, they are going all in for small modular nuclear reactors.
I fully support exploring nuclear, but the fact is it is likely decades away from coming to fruition and does nothing to help Hoosiers now. And yet that is where legislators focused much of their effort earlier this year.
Then there are those power-hungry data centers. They seem to be popping up everywhere. While only a few of them are partially active in Indiana, many others have been proposed. They create a very real threat to power in Indiana, and I can’t see what advantages they bring to Hoosiers. They usually create a small number of jobs and long tax abatements limit their impact on the tax base.
The last thing I will mention is the rate game. Utilities come in and propose purposely high rate hikes. The Office of Utility Consumer Counselor opposes, and the Indiana Utility Regulatory Commission approves a lower rate, but one that still adds to the burden.
This is one area where Gov. Mike Braun could have an impact. He likes to talk tough, and I hope he brings that same approach to his role over appointments on both agencies.
The agencies will have new leadership soon and he needs to make clear it’s time to start putting the consumer first — not utility shareholders. That’s harder than it looks when you see how much utilities spend in the political arena.
Beyond millions each year in direct donations to campaigns, utilities are among the top spenders on lobbying activities. And some of the state’s largest utilities also help fund the Indiana Economic Development Foundation.
There is no silver bullet. But a starting point would be for legislative leadership to clearly acknowledge the problem and commit to finding solutions.