Study Evaluates Rate Impact of a RES in Indiana

A study that describes estimated rate impacts that a Renewable Electricity Standard (RES) would have on Indiana’s electric utility ratepayers has been released by the Indiana Coalition for Renewable Energy and Economic Development (ICREED), a coalition of businesses, elected officials, and clean energy groups. The RES would require that electric utilities supply a percentage of their power through renewable sources, such as wind or biomass.

The study, which shows that combined with the current federal incentive for wind, the rate impact of a ten percent standard by 2017 in Indiana would amount to a total of 1.14 percent over the ten-year period, was written by Pete Boerger, a PhD Purdue-educated economist and former head of the Electric Division of the Indiana Office of the Utility Consumer Counselor. Republican State Representative Don Lehe and Democrat State Representative Dale Grubb are supporting an RES that calls on Indiana electric utilities to supply a modest 10% of their electricity with renewable energy technology by 2017. Such a policy would set the proper market conditions for significant new investment in Indiana, and would create thousands of new jobs throughout the state, benefiting both rural and urban areas. Currently, 20 states have a Renewable Electricity Standard (RES) in place, and 15 additional states have bills pending in their legislatures. Such market mechanisms require that electric utility companies supply a small percentage of their electricity with renewable sources of power, such as wind or biomass. ICREED estimates that 70% of all wind development nationally is in states with an RES. “Combined with the current federal incentive for wind, the study estimates that the rate impact of a 10% RES by 2017 in Indiana would amount to a total of 1.14% over the ten year period,” said Jesse Kharbanda of the Environmental Law and Policy Center. “To put that in perspective, this figure is well in line with a report by the Lawrence Berkeley National Laboratory, which states that the average rate impact across 22 studies is about 0.7%.

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