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  • Writer's pictureJohn Kristof

Indiana GOP could choose coal over free markets

Major Indiana utility companies have indicated that moving away from coal would be more efficient and cost effective for consumers. According to their plans, 2,300 megawatts of electric capacity shift from coal to other sources over the next decade.

For example, the Merrillville-based Northern Indiana Public Service Co. expects to save $4 billion over 20 years by retiring four of its five coal-fired electricity burning units. Evansville’s Vectren Corp. plans to shift most of its electricity generation to natural gas and solar power by 2024. Indiana’s coal-burning power generating units fell by half from 2010 to 2016.

Lowering electric costs for Hoosiers while moving toward cleaner energy should be a political win-win. Instead, state policymakers are advancing legislation that would restrict utility companies’ ability to shift energy sources.

On April 8, the Indiana House Utilities committee approved legislation that would prevent the Indiana Utility Regulatory Commission (IURC) from approving electric companies’ plans that involve changing how they generate electricity. The moratorium would hold until 2021. In the meantime, the legislation prescripts a statewide task force dedicated to studying Indiana’s energy markets and provide policy recommendations. The bill now heads to the House floor.

Legislators’ defense of the measure sound like intense caution rather than careful policymaking. Rep. Ed Soliday, a Republican insists the state needs to “do something that slows things down” so the state’s energy isn’t determined by utilities and the IURC.

Soliday hasn’t explained why. The Indiana GOP platform declares belief in individual liberty and freedom, which, in the platform’s own words, includes freedom from “intrusive government interference and poor, ineffective or unnecessary regulation.” Furthermore, Indiana Republicans declare belief that “government is intended to protect people without intruding into their lives.” The utilities committee’s temporary ban on energy update plans, a decision led by Republicans, violates these principles.

The decision first violates the state GOP platform by directly contradicting its view on regulation. Before the moratorium, utility companies were moving in a pro-consumer, pro-growth, and incidentally pro-environment direction. Shifting away from coal would cut down costs, keeping Hoosiers’ living costs down. Whether saved or spent, money that doesn’t have to merely keep a house functioning improves living standards. If the purpose of government is merely “to protect our liberty, our safety and our freedom” as Indiana Republicans declare, the story should end here.

After all, the platform later defines liberty and freedom as a lack of “intrusive government interference and poor, ineffective or unnecessary regulation.” Considering the moratorium was approved without testimony, and given legislators’ caution-centric rhetoric, the Indiana GOP seems not to worry about whether this intervention is necessary.

If that weren’t enough, Indiana Republicans’ energy platform asserts “free markets should be encouraged to find effective and efficient energy solutions, not government mandates.” While the temporary ban on new electric plans isn’t a long-term policy prescription, it indicates that utilities can become more efficient only on the state’s terms. Far from encouraging free markets to offer Hoosiers effective and efficient electricity, the moratorium displays distrust in the market process. Utility companies must wait for the state to determine what is effective and efficient––a prime example of central economic planning.

Interest groups from all angles are baffled by the utilities committee’s decision. Energy, environmental, and consumer groups see little sense in halting a statewide move toward cheap and clean electricity.

The moratorium only seems to help the coal industry. If a product’s one advantage, efficiency, is rapidly being overtaken by alternatives, a prohibition on customers’ ability to switch products is exactly what the doctor ordered.

It is not unreasonable to assume the coal industry had a hand in creating and passing the moratorium. Coal interest groups have been significant donors to Indiana Republicans for years, and Republicans have supported billions of dollars of tax breaks for the coal industry as recently as 2018.

Supporting politicians that represent your values is a beneficial and crucial part of American democracy. But the moratorium suggests a Republican devotion to a donor base so strong that the party is fighting against its core principles. Many Hoosiers clearly want their government to protect their liberty and wellbeing, and Republicans have promised to do just that. If they wish to be true to their word, they will shoot down the moratorium before it reaches the governor’s desk.

This blog originally was written April 10, 2019.

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