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Bill would let utilities recover the cost of natural gas plants during construction

By Rebecca Thiele, IPB News | Published on in Business, Environment, Government, Politics
The bill would allow utilities to recover the cost of natural gas plants – like the Eagle Valley plant – as they’re being built. (Rebecca Thiele/IPB News)

A state House bill, HB 1421, would allow utilities to recover the cost of natural gas plants as they’re being built — easing those costs into customers’ bills over a longer period of time. It’s something utilities can already do with other types of power.

“The project is going to result in a rate increase one way or another. The question is when that happens,” said Danielle McGrath, who represents utilities through the Indiana Energy Association.

But some question whether ratepayers would benefit overall and if the state should encourage more natural gas.

Kerwin Olson with the Citizens Action Coalition said his group is opposed to financing power sources this way — even if it’s wind and solar.

“Ratepayers pay for service. Ratepayers are not involuntary financiers of these large capital projects,” he said.

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Olson said this would also let utilities to bypass a formal rate case — which takes an in-depth look at a utility’s books and can sometimes lead to lower rate increases for customers.

Rep. Matt Pierce (D-Bloomington) also raised concerns the bill would encourage larger, more expensive natural gas plants at a time when smaller plants are a better complement to renewable energy sources.

The bill would also classify methane recovery as a “clean energy” source. It passed out of committee and now moves to the full House for consideration.

Rebecca is our energy and environment reporter. Contact her at rthiele@iu.edu or follow her on Twitter at @beckythiele.