By State Sen. Jim Merritt (R-Indianapolis)
In order to ensure that utilities are able to meet the energy demands of their customer base, it is necessary for utilities to maintain an “All of the Above” generation portfolio to provide the reliability and resiliency needed of an electric system. An “All of the Above” approach should not only include investments in innovative renewable technologies, such as wind and solar, but must also include dependable low-cost natural gas to ensure there is adequate energy available when each and every customer goes to turn on the lights. No one source of energy perfectly meets the ideal goals of reliability, resiliency, affordability, environmental friendliness and system stability, which is why maintaining a diverse and balanced portfolio is critical.
“All of the Above” strategies are not new to the electric industry. In fact, it is currently a topic of consideration for the 21st Century Energy Policy Development Task Force. This task force, which was formed by legislation passed in the 2019 legislative session, is charged with evaluating policies associated with electric generation portfolios and developing recommendations for the Indiana General Assembly to consider in the future.
Straying from the “All of the Above” approach to rely solely on intermittent renewable resources has been tested in states like California, where rolling blackouts were seen for four days straight as energy availability was not sufficient to meet customer demand.
In Indiana, when the wind stops blowing or the sun stops shining, the energy grid has access to dispatchable fuel resources, such as natural gas, to power the electric system. Natural gas is not only reliable, but is also a critical component of transitioning our country to more environmentally responsible energy generation. In fact, the promotion and expansion of the natural gas industry was a policy initiative led by the Obama administration to replace coal with a cleaner source of energy (natural gas emits 50% less CO2 than coal). According to the U.S. Energy Information Administration, the use of natural gas has reduced American CO2 emissions to 27-year lows and is projected to continue declining.
Natural gas is also an important low-cost energy source for Indiana’s residential, commercial and industrial retail customers. Natural gas' ability to provide inexpensive and versatile energy that allows Hoosiers to prepare dinner for their families, as well as power numerous businesses in the state, should make it a cornerstone of our energy production.
Indiana’s short- and long-term economic health depends on the availability of affordable, reliable and sustainable energy. One of the first priorities of a company seeking to site its facilities within our state is to evaluate our capability to meet its energy needs. Power outages have the potential to cause millions of dollars in losses to manufacturing facilities or data centers, making access to dependable service non-negotiable. If Indiana’s utilities are unable to meet these needs because of the makeup of their portfolios, these businesses will seek out states who can.
The 21st Century Energy Policy Task Force is scheduled to release policy recommendations on Dec. 1, 2020. I will be looking for policy initiatives promoting an “All of the Above” energy generation strategy for the benefit of our utilities, their customers, and the state of Indiana.