The Indiana Chamber of Commerce has released the results of a study it commissioned to look at long term energy usage in the Hoosier state and its impact on businesses.
Powering Indiana’s Economic Future is a comprehensive look at power generation and costs, something the state has not done in about 15 years.
The Indiana Chamber initiated the study to identify key issues, gather data, and project future scenarios.
In an interview with Inside INdiana Business, Indiana Chamber Vice President of Energy and Environmental Policy Greg Ellis said chamber members have expressed concern about rising energy costs.
“I think the big driver was we were top 10 lowest (in electric costs) 10 years ago, and now our overall rank is 27. We’ve slipped on the price rankings and we wanted to take a look at that,” said Ellis.
Ellis says the study found Indiana’s average electricity rates were growing more rapidly than the national average, climbing 2.9% per year from 2010-2019.
The report cites the growing energy costs to flattening demand, utilities having to replace and maintain aging infrastructure, and power providers making investments to comply with changing federal environmental regulations.
“Ten years ago, coal was king in Indiana, and the other surrounding states did not have that advantage that we had in that the coal was here, it was low cost, that was our primary source of fuel,” said Ellis. “But since that time, because of fracking, natural gas has become more available in the states that had natural gas-fired power plants.”
The chamber says coal reliance in Indiana has dropped from 90% to 59%, but it is still higher than the national average.
As one of the leading manufacturing states in the country, the chamber says it is important for Indiana to have an affordable and reliable energy plan to remain competitive.
“It is imperative that we maintain a competitive business environment that allows our manufacturing sector to create new jobs and add investment,” said Tom Easterday, co-chair of study advisory council and former executive with Subaru of Indiana Automotive. “Addressing how we power Indiana’s future is an important step toward ensuring affordable and reliable energy for Indiana that can help keep our state competitive.”
The chamber hired London Economics International, a global firm specializing in energy and infrastructure analysis. The goal is to help policymakers grapple with this critical topic.
“We’re going to use the plan as our guiding star for our public policy advocacy with respect to energy, to remind them not only where we’ve been but where we need to go as a state,” said Indiana Chamber President Kevin Brinegar.
Brinegar discussed the study in a recent interview on Inside INdiana Business with Gerry Dick.
Brinegar says the report shows over the next ten years, it expects energy costs in Illinois, Ohio, Kentucky and Michigan will go up faster than Indiana.
“Our (costs) level out as other states play catch up to meeting those requirements on retiring older plants,” said Brinegar. “It’s encouraging. Our affordability is going to plateau and somewhat stay the same, while our surrounding neighbors, who we compete against for business are going to go up.”
To learn more about the study, click here.
Indiana Chamber Vice President of Energy Greg Ellis said the study was long overdue.