Duke Energy has offered demand-side management programs in Indiana since the 1990s. Indiana electric utilities saved 39,903 MWh in 2009. Indiana electric utilities proposed new energy efficiency efforts in 2008 and 2009, and these are being actively negotiated. Three of Indiana's natural gas utilities conduct energy efficiency programs as well and plan to ramp-up their current portfolios. The early stages of an EERS began when Indiana’s Commission ordered all jurisdictional electric utilities to begin submitting three-year DSM plans in July 2010, indicating their proposals and projected progress in meeting annual savings goals outlined by the Commission.
Duke Energy has proposed implementing its “Save-A-Watt” initiative in Indiana. This process would require converting the current DSM rider, a surcharge paid by utility customers, to an energy efficiency rider. The IURC did not approve the petition and responded with a request that Duke conduct a collaborative potential study to determine the market for energy efficiency measures in the state. After the request, Duke collaborated with the Indiana Office of Utility Consumer Counselor and Citizens Action Coalition of Indiana to hire a consultant to investigate the market potential. The process is ongoing as of 2011.
Duke Energy’s proposal includes revising its integrated resource planning (IRP) process to consider energy efficiency a resource that can be compared with other energy sources.
There have been some past efforts under a statewide strategic energy plan to identify and explore policy and program options to improve energy efficiency and infrastructure. The "Energizing Indiana" initiative--a collaboration between the Indiana Utility Regulatory Commission, participating utilities and consumer groups--is a state-wide effort to reduce energy use. An earlier strategic plan, called "Hoosier Homegrown Energy," was completed in 2006.
Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
Both natural gas and electric utilities in Indiana operate demand-side management and energy efficiency programs. These utilities include Duke Energy, Vectren, Indiana Michigan Power Company, Northern Indiana Public Service Company, Northern Indiana Fuel and Light, and Kokomo Gas and Fuel. While some of these programs have existed for over a decade, they have been relatively small. According to the Indiana Utility Regulatory Commission, Indiana electric utilities reported gross efficiency program savings of 79,366 MWh in 2010, approximately double the savings reported in 2009. Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
Although Indiana has not taken a strong interest in energy efficiency in the past, this began to change in 2007. Utilities have proposed expanding their programs and setting more ambitious targets. This has led to a series of new dockets at the Indiana Utility Regulatory Commission (IURC).
In 2007, the IURC opened a docket concerning Duke Energy’s expanded energy efficiency program, known as the “Save-A-Watt” program, however, Duke withdrew their proposal and the docket is now closed.
A Commission order (in Case 42693) called on all electric utilities to provide a core set of statewide programs. It was implemented starting January 2, 2012. Phase II of the order requires regulated utilities to achieve energy savings targets. Utilities must contract with a single independent third party administrator for the purpose of jointly administering and implementing the Core Programs. All five investor-owned utilities have had their initial set of three year plans approved by the Commission. The docket numbers including the specifics include 43912, 43959, 43955, 43938 and 43960. Non-jurisdictional utilities, such as cooperatives and municipal utilities, were invited to participate in the statewide Core program. Almost all REMCs and Municipal utilities opted out of commission jurisdiction well before the Phase II final order.
Indiana natural gas utilities reported in 2007 that the Indiana Utility Regulatory Commission approved a set of residential programs that year. The scope of these programs was not clearly stated. In general, natural gas programs in Indiana have been small, limited, and often voluntary.
Indiana electric utilities offer energy efficiency programs funded via tariffs (a form of customer surcharge). Indiana utility electric energy efficiency spending in 2009 equaled $9.4 million and the Consortium for Energy Efficiency reports budgets for 2010 totaling $16.5 million, a relatively large increase that reflects recent Commission decisions.
Between 2004 and 2007, three natural gas utilities – Northern Indiana Public Service Company, Northern Indiana Fuel and Light, and Kokomo Gas and Fuel – spent $850,000 on low-income weatherization. Since then, natural gas utilities have also begun expanded funding for energy efficiency programs. Budgets for 2010 natural gas programs in 2010 were $14.5 million.
Reported budgets for energy efficiency programs for 2011 are in the State Spending and Savings Tables.
Indiana’s Commission ordered all jurisdictional electric utilities to begin submitting three-year DSM plans in July 2010 indicating their proposals and projected progress in meeting annual savings goals outlined by the Commission. The goals begin at 0.3% annual savings in 2010, increasing to 1.1% in 2014, and leveling at 2% in 2019. Load management and direct load control initiatives, including peak-shaving, which result in net-energy savings will be counted towards the goal. Achievement of DSM goals will be measured through an independent third-party evaluation and will be based on a reduction of electric sales rather than peak electric demand. Utilities that do not meet the goals must demonstrate to the Commission how they plan to alter or add programs in to increase savings. In 2013, the Commission will critically review the utility DSM filings to ensure a solid foundation is in place to allow utilities to meet energy savings objectives.
The decision also outlines a portfolio of core programs, now called Energizing Indiana, offered by all affected utilities. The statewide approach offers consumers a uniform set of energy efficiency programs, using coordinated marketing, outreach, and consumer education strategies. The programs include: residential lighting, home energy audits, low-income weatherization, energy-efficient schools, and commercial and industrial. Energizing Indiana is administered by a single independent, third-party entity, which is contracted by all of the utilities. Utilities are able to oversee additional programs. Programs will be evaluated through a consistent evaluation framework developed by a third-party evaluator.
Indiana Administrative Code provides guidelines for demand-side recovery electric utilities, as well as lost-revenue recovery and demand-side management incentives.
At one time Vectran Energy had a decoupling mechanism for gas and electric utilities, however decoupling was rejected for electric utilities in a 2011 PUC order. (Cause No. 43839, approved April 27, 2011 and Cause No. 43112, approved Aug. 1, 2007. Vectren has a Reliability Cost and Revenue Adjustment Mechanism (See Cause Nos. 43111, 39453, and 43406) and Duke Energy Indiana has lost revenue recovery. (Cause No. 43374).
Duke Energy’s "Save-A-Watt" proposal includes revising its integrated resource planning (IRP) process to consider energy efficiency a resource that can be compared with other energy sources. This proposal has not been approved yet and is the subject of several open docket.
The evaluation of ratepayer-funded energy efficiency programs in Indiana relies on regulatory orders (Cause No. 42693, Phase II Order). Evaluations are administered by both the utilities and the Indiana Utility Regulatory Commission. There are no specific legal requirements for these evaluations in Indiana. Evaluations are conducted statewide and for each of the utilities. Indiana uses four of the five classic benefit-cost tests identified in theCalifornia Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/Programs Administrator (UCT), Participant (PCT), and Ratepayer Impact Measure (RIM). The rules for benefit-cost tests are stated in Rule 8. 170 IAC 4-8. Indiana specifies the TRC to be its primary cost-effectiveness test. These benefit-cost tests are required for overall portfolio, total program, and customer project level screening, with exceptions for low-income programs, pilots, and new technologies. Indiana program evaluation is still in the nascent stages of development.