Hoosier coal advocates pushing for a ban on early coal-fired plant retirements have found allies among Republican Senate leaders. But a key House lawmaker on Thursday publicly signaled opposition to such a measure — and said he’d put forth his own proposal.
“They want a moratorium that says we can’t close coal plants indefinitely. I think we need to make that a business decision,” Rep. Ed Soliday, R-Valparaiso, said in comments to reporters. “… Forcing it just doesn’t work mathematically.”
Soliday co-chairs the bicameral interim energy committee that met Thursday, and leads the House’s energy committee during the legislative session. That means he controls which proposals get heard and voted on in his committee, and which meet an early demise.
He killed an attempt last session to explicitly give the Indiana Utility Regulatory Commission (IURC) the authority to stop utilities from closing their coal-fired plants, and to set conditions for utilities to meet in order commence retirements. It never got a hearing.
Soliday told the interim committee that coal-fired plants are often too expensive to run, adding, “They’re just sitting there.”
“I heard a couple of speeches that we should force the utilities to keep coal-fired plants open for their full useful life. What is useful life?” he continued.
Coal plants have historically had 50-year lifespans, according to a 2019 article published in Nature Communications. But they can last longer with fixes and upgrades.
U.S. coal plants are about 44 years old, in a capacity-weighted average, according to an analysis by the U.S. Energy Information Administration. Plants scheduled for retirement this year averaged 54 years of age: almost a decade older.
But coal plants decommissioned before the end of their expected decades-long lives have become a political flashpoint.
Potential legislation
Soliday, who spent more than 35 years working for United Airlines, defined “useful life” as ending when operations and maintenance cost more than can be earned in revenue.
“I can tell you when the airplane no longer makes money — that it’s out of service an excessive amount of time, it’s costing more to maintain and operate — we’re going to buy a new one,” he told reporters.
He’s planning to propose legislation codifying a definition into law.
It’s unclear how that would fare in the Senate.
Sen. Eric Koch, who co-chairs the interim committee and leads the Senate’s energy panel, said he “was pleased with the testimony from today’s hearing” in an emailed statement. “Rep. Soliday and I work in close collaboration, and will continue to advance Indiana’s “All of the Above” energy strategy centered around the Five Pillars (Reliability, Affordability, Resiliency, Stability, and Sustainability).”
Koch, R-Bedford, didn’t answer questions about his stance on early coal closures and Soliday’s proposal. He wasn’t available for questions after the committee meeting.
Others in the upper chamber have indicated support for new limits on early closures.
In a July memorandum of legal guidance to Majority Floor Leader Sen. Chris Garten, Indiana Attorney General Todd Rokita said the IURC implicitly has the power to deny premature retirements, but that lawmakers could make that authority clearer, make retirement-related oversight mandatory and even add specific guidelines for regulators to use.
Garten released the memorandum earlier this month, through an energy advocacy group focusing on coal, natural gas and nuclear power.
He said a proposal reflecting Rokita’s guidance could be part of the solution.
He’s working on a “holistic approach” in conjunction with energy committee heads of both chambers — Soliday and Koch — as well as legislative leadership.
A frontrunner in the race for governor has also pushed to head off early closures.
Last week, Republican gubernatorial nominee Mike Braun asked regulators to reject one utility’s proposed coal-to-natural-gas conversion. AES Indiana said it wanted to “re-power” rather than retire the units.
Sen. J.D. Ford, D-Indianapolis, asked IURC Chair Jim Huston about the letter. Huston said the letter was “in the record” but declined to comment further, noting “I would get strung up by our general counsel” because the case is pending.
Soliday said if lawmakers want to comment on a case, they should send their letters instead to the Office of Utility Consumer Counselor. The agency represents ratepayers in IURC cases.
“If there’s an appearance that I have some kind of power over (an entity), I shouldn’t be commenting,” he later said.
Reports delivered
The interim committee met to receive statutorily required reports from the IURC, OUCC and Indiana Broadband Office, in addition to reports about renewable energy resources and electricity forecasting.
Indiana is 28th in the nation for its average electricity retail rates, according to the IURC’s presentation and annual report. Huston cited federal requirements for the low ranking.
“A lot of the rules and regulations that (the U.S. Environmental Protection Agency) put in place have to be borne out by utilities, and that means ratepayers have to pay for it,” Huston said. “I’m concerned, a little bit, about the timing and how they wind up intersecting with integrated resource plans and ultimately what customers wind up paying.
“It’s one of the explanations I give about how we used to be one of the lowest-cost utility states in the country,” he continued. “We’ve maintained a generation mix that requires more and more investment to stay online and in compliance with the EPA, so that is a huge part of our rate ranking having changed.”
The agency has also moved forward with a statutorily required study of performance-based ratemaking, which would tie utility revenues and profits to specific performance goals. Rates are currently based on utility capital expenditures.
Huston said the IURC has contracted Christensen Associates Energy Consulting to conduct the study. The vendor has an initial stakeholder survey and workshop done, he said. A follow-up survey and workshop are next, according to the slide deck.
In a separate report, Chief Technical Adviser Dale Thomas said IURC thought utilities’ plans would help them provide reliable electricity and meet planning reserve margin requirements for the next three planning years.
Renewable energy generation, meanwhile, has grown.
State Utility Forecasting Group Lead Analyst David Nderitu said biofuels — mostly corn ethanol — account for more than half of Hoosier renewable energy.
The group, based out of Purdue University, highlighted U.S. Department of Energy estimates that the country could add 454 megawatts of electric capacity at existing dams. Two-thirds of that potential, according to the presentation, is at two locks along the Ohio River between Indiana and Kentucky