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Bill Aims To Reduce Costs For Customers When Coal Plants Retire Early

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Lawmakers want to study a way to reduce costs for utility customers when coal plants retire early.

While the rapid transition to renewable energy may save utility customers money in the long run, it can lead to higher energy bills in the short term. That’s because customers are still paying off retired coal plants while also funding new energy sources.

A state Senate billwould study how to reduce those costs through securitization. Much like refinancing a home, it allows customers to pay off coal plants over a longer period of time at a lower rate — lowering energy bills. Tim Phelps is with the Indiana Conservative Alliance for Energy, which supports the legislation.

“These securitization tools could help speed up the state’s inevitable transition to cleaner, more renewable energy and save money along the way," he said.

READ MORE: How Do I Follow Indiana's Legislative Session? Here's Your Guide To Demystify The Process

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READ MORE: How Can We Get Rid Of Retiring Coal Plant Costs? Energy Task Force Takes A Look

The state Senate bill would also create a pilot program with CenterPoint Energy — which plans to retire its A.B. Brown coal plant by 2023. But consumer advocates aren’t so sure about the pilot program.

“If the intent of this bill is to save ratepayers money then the policy must absolutely state that in its language," said Kerwin Olson, executive director of the Citizens Action Coalition.

Olson said otherwise, there’s nothing to keep CenterPoint from double charging customers for the cost of the plant — first in their regular base rate and then again in a new charge as part of the pilot.

He said language guaranteeing customer savings is especially important because the Indiana Utility Regulatory Commission, which would oversee the pilot program, is guided by Indiana law.

Joe Rampala with Indiana Industrial Energy Consumers, Inc. (INDIEC) — which represents large energy users like industrial companies — agreed that the bill needs guardrails to protect consumers. 

The bill passed out of committee on Thursday and now moves on to the full Senate for consideration.

Contact reporter Rebecca at or follow her on Twitter at @beckythiele.

Indiana Environmental reporting is supported by the Environmental Resilience Institute, an Indiana University Grand Challenge project developing Indiana-specific projections and informed responses to problems of environmental change.

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