Controversial utility bill is signed by Gov. Holcomb

May 01, 2023

A bill that will eliminate most competition for the ownership and maintenance of regional transmission lines was signed into law by Gov. Eric Holcomb on Monday, handing a major win to the investor-owned electric utility companies that sought its passage.

The bill had been the center of a fight among business interests with deep pockets and connections that run through the halls of the Indiana Statehouse. 

What the new law does

House Bill 1420 will give investor-owned utility companies, such as Duke Energy, the first opportunity to own and maintain new regional transmission lines.

Transmission lines hang on the massive steel towers often seen cutting across the countryside. They connect the electrical grid across borders.

Previously, those projects were open to bidding by other competitors, such as national transmission companies. One company, LS Power, recently completed a 31-mile project connecting southern Indiana and western Kentucky. 

Rep. Ed Soliday, R-Valparaiso, who carried the legislation, argued that HB 1420 will provide protections against higher energy costs. 

One aspect of his legislation would require investor-owned utilities to provide information about the new transmission projects to an existing state regulatory body called the Indiana Utility Regulatory Commission (IURC). If an investor-owned utility tries to pass along unnecessary costs, Soliday said, then the commission will be able to serve as a check by limiting how much utilities can charge consumers on their monthly bills. 

“Because they have enforcement authority,” Soliday told State Affairs last month. “The IURC can say, ‘You are running way over what you said … You want to spend that kind of money? That’s fine, but your profits are limited.’” 

Why it matters

The federal government plans to significantly expand the grid, seeking potentially trillions of dollars of projects across the country to reduce congestion. 

The Midcontinent Independent System Operator (MISO) — a nonprofit based in Carmel that oversees transmission in our region of the country — has already announced more than $10 billion in projects for the multistate region that includes Indiana. 

Another announcement for $10 billion to $20 billion in projects is expected soon.

With so much money on the line, business interests have been lobbying for access to the work. Investor-owned utilities are financially motivated to seek the projects because of how utility regulation works: The companies pass along their costs (plus some extra to pay for investors’ profits) to Hoosiers’ monthly utility bills. 

Because utility companies function as near-monopolies, opponents of the bill had sought to preserve competition for the ownership and maintenance of the projects. Put simply: Without competition, consumer advocates fear that the utility companies will drive up costs for Hoosiers. 

“The larger the project, the more costs that they can recover and the more that they will then transfer those costs down to the ratepayers,” said Sen. Jean Breaux, D-Indianapolis, on the Senate floor last month. “This is simply a way for the utilities to make sure that they grab that piece of the pie for themselves and share it with nobody else.”

Consumer advocates were joined by national transmission companies in opposing the bill.

But the bill in Indiana also drew support from several labor groups, who have long-standing relationships with investor-owned utility companies and stand to benefit in the form of guaranteed work and jobs. 

What happens next 

Similar battles have been unfolding in several other states, too, in some cases leading to litigation. No lawsuits have been publicly announced in Indiana. 

The law is set to take effect in July. 

Contact Ryan Martin on Twitter, Facebook, Instagram, LinkedIn, or at [email protected].

Twitter @stateaffairsin
Facebook @stateaffairsin
Instagram @stateaffairsin
LinkedIn  @stateaffairs

Header image: Transmission tower (Credit: Chuyu)