Experts say now is the time to plan for Indiana’s commercial utility needs
By Michael Dabney
While most people recognize the importance of education to Indiana’s future, many people outside of the industry seem to overlook the importance utilities will play in the state’s future economic growth and prosperity.
But Indiana’s current utility situation is partly to blame.
Energy, water and telecommunications capacity are plentiful and secure in Indiana at the moment. And people generally don’t think of their electrical power or water needs unless there is a rate change or there is a significant shortage for a prolonged period of time.
“Ensuring that Hoosiers receive reliable utility service at reasonable prices is part of our charge and a responsibility we take very seriously,” said Natalie M. Derrickson, director of communications for the Indiana Utility Regulatory Commission. The IURC hears utility rate cases from across the state.
Indiana’s electric rates are relatively low. The state’s annual ranking for average total customer retail electric rates from 2000 to 2013 ranged from ninth lowest in the nation in 2000 to fourth lowest in 2002 to 15th lowest in 2013, Derrickson said.
The availability of water also hasn’t been a statewide problem in Indiana.
With average annual rainfall of roughly 40 inches, significant ground water reserves and substantial water resources with Lake Michigan in the north and the Ohio River in the south, Indiana has long-enjoyed a reliable supply of fresh water, according Vision Indiana: 2025. That recent report by the Indiana Chamber of Commerce Foundation addresses the state’s infrastructure needs.
Indiana experienced a natural gas boom in the 19th Century that has all but ceased to exist today. Citizens Energy Group in Indianapolis has gas shipped in from out of state, and though it has seen a decrease in gas load in recent years due to the loss of some industrial customers and improvements in equipment efficiencies, the supply is still adequate, said Christopher H. Braun, vice president of energy operations at Citizens.
As it relates to supply, the state is similarly situated.
But that doesn’t mean that things can’t change in the future.
ON THE HORIZON
Having an adequate energy supply is essential to Indiana’s future, most energy and telecommunications experts say. But the question remains as to whether the Hoosier state has the infrastructure capable of handling its commercial and residential needs.
The Indiana Chamber of Commerce Foundation’s report says the state’s assets cannot not be taken for granted and that continued investment and improvements are essential.
“Our future challenges will be to allow competitive markets to function while judiciously using public dollars, maintain what we already have and addressing new market demands,” it states. “The mix between public funding and private investment, as well as the sometimes overriding impact of federal activity, could prove decisive.”
But Indiana has challenges in virtually all utility areas.
At 64 percent, Indiana tied for 37th in the nation in the percentage of households with broadband Internet access, according to the Congressional Research Service. Moreover, the U.S. Census says 18.7 percent of Indiana households have no computer, and those residents have no connection elsewhere. Indiana also ranks significantly below the national average in the percent of highly connected individuals and significantly above the national average in non-connected individuals.
The Congressional report says “. . . disparities in broadband access across American society could have adverse economic and social consequences on those left behind.”
Water is necessary for all life, and an adequate supply of this ‘blue gold’ is essential for the state’s economic future, said Kumar Menon, director of Fort Wayne City Utilities. But he adds that Indiana’s economy is the most water-dependent in the country, and a long-term comprehensive plan is needed to ensure that the state’s water supply does not dry up.
“This is not something that can be achieved in a year or two,” Menon said of developing a statewide water plan. Water “does not know political boundaries and so public officials at all levels will need to be involved.”
The chamber foundation’s report estimated Indiana’s statewide wastewater and drinking water infrastructure needs through 2020 require $12.4 billion to $13.9 billion in funding for capital projects to improve or rehabilitate infrastructure. The American Society of Civil Engineers’ 2013 Report Card for America’s Infrastructure put it quite bluntly: Indiana’s drinking water infrastructure earned a D-plus, and its wastewater infrastructure rated only a D-minus.
Menon didn’t totally agree with the conclusion in the civil engineers’ report. But he did say water utilities needed to invest between 1 percent and 2 percent of revenues each year to maintain and improve their infrastructures for reliable drinking water, high quality water for industry and for quality sewerage treatment.
POWER OF THE FUTURE
There are no operational nuclear power plants in Indiana. And despite gas-fired plants, renewable energy plants and one of the largest windmill farms in the country visible along Interstate 65 in White County north of Lafayette, the Hoosier state is not energy-diverse.
Slightly more than 93 percent of all electricity in the state is generated by coal-fired plants, which critics say pollute the atmosphere, particularly along the East Coast. And coal supporters claim the federal Environmental Protection Agency under the Obama administration is hostile to the coal industry and could force electric utilities to adopt regulations that could dramatically hike electric rates.
Compliance with current and future EPA standards “will continue to increase the cost of electricity to our customers,” Indianapolis Power & Light Co. president and CEO Kelly Huntington said in a statement. But the utility has plans to deal with that.
But to hold down costs and meet regulations, particularly regarding wastewater, in the last several years IPL has announced plans to close or refuel 12 coal-fired or oil-fired generation units and is seeking IURC approval to repower some coal-fired generation stations to natural gas. According to plans announced in mid-August, 79 percent of IPL’s electric power was from coal-fired plants in 2007 and the company hopes to reduce that to 44 percent by 2017, making natural gas IPL’s largest fuel generation source.
Huntington said converting some plants to natural gas “is the best plan for our customers because it is the reasonable, least cost option.”
Public officials and business leaders say the Indiana utility industry is well-trimmed for the future but continued planning and re-investment are needed to insure the state remains a leader through the middle of the century and beyond.
Do African Americans need a book targeted specifically to help them break into and reap the benefits of the Internet economy? Figures released in May by Google show only 1 percent of their employees are Black in comparison to the overall population, which stands at 12 percent. Apple is doing a little better with a staff that’s 7 percent Black. So maybe they do.
A recent study conducted by the Equal Rights Center and Freedom to Work concluded job applicants who so much as hint they are gay, lesbian, bisexual or transgender on their resumes reduce their chances of being called for an interview by as much as 23 percent. Test applicants with nearly identical backgrounds, except a strong work history that identified LGBT volunteerism, applied for the same position. The applicant with the weaker resume was contacted repeatedly for an interview while the LGBT applicant never was contacted and someone else was hired. But there is some relief, at least for those who work for the federal government or its contractors. President Barack Obama in July signed an executive order prohibiting federal contractors from discriminating against their employees based on sexual orientation or gender identity.
BUYING GIFTS CAN BE TOUGH
Residents of northern Madison County supply their homes’ electricity through utilities powered by Indiana Michigan Power, while the southern half of the county uses electricity supplied by Vectren.
Flash back to May 2009 and one would find a massive team on Ball State University’s campus working on an $82.9 million geothermal project in Muncie. Today nearly half of the 1,100-acre campus is heated by geothermal energy.
While shopping for apparel, groceries and home goods, Target customers were surprised when the store lost power for nearly three hours. As a result, customers were frantic and many food items had to be thrown away once they reached room temperature, resulting in a significant loss for the store, at the very least, its insurer.