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Report: "Energizing Indiana" Was Cost Effective

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A new report indicates the state’s energy efficiency program legislators eliminated earlier this year was cost effective—saving about three dollars for every one dollar spent.

The Indiana Utility Regulatory Commission report shows the biggest payback from the program—called Energizing Indiana—was in rebates given to commercial and industrial businesses that upgraded to energy efficiency equipment. For every one dollar in rebate, the companies saved more than five dollars in electricity costs.

Citizens Action Coalition Executive Director Kerwin Olson says numbers like that show Indiana should restart the program—or something similar that benefits both the consumer and utility companies.

“The best path forward with that is the establishment of a public purpose charge that removes the disincentive for utilities to invest in efficiency, captures those costs from the public and those go directly to an independent administrator to run and oversee those programs and leave the utilities to what they do best and that is generate and sell electricity,” Olson said.

But Indianapolis Republican State Senator Jim Merritt, who authored the bill scrapping Energizing Indiana, is standing by his decision.

He says funding to run the program was expected to double and that cost would have been passed on to ratepayers—even if they weren’t using the program.

“It was obvious that changing light bulbs and wrapping pipes can just take you so far in efficiency,” Merritt said. “After that you start looking at refrigerators and big devices such as that that cost a lot of money and would be bourn, socialized by the entire rate base, and those that would not be participating with new refrigerators would bear the burden.”

The Indiana Utility Regulatory Commission is scheduled to present the findings of its report at a legislative study committee next month. The committee is then expected to provide its recommendations to the full legislature next year.