Repealing Energy Efficiency Program Means Lost Jobs, Higher Electric Bills for Indiana
If Indiana’s legislature had not repealed the Energy Efficiency Resource Standard (EERS) in 2015, the state would have saved more energy, ratepayers would have saved millions of dollars, and many jobs would have been created, according to a July 2018 study by the Applied Economics Clinic (AEC).
The study was commissioned by Citizens Action Coalition of Indiana. It compared energy efficiency savings, saved energy costs, and job impacts since the repeal of EERS in 2015 with what would have been achieved had the program not been repealed. The policy brief concluded that:
- Indiana utilities would have saved an additional 136 GWh on average over the 2015 to 2019 period;
- Ratepayers would have saved millions of dollars — from $16 million in 2015 to $44 million in 2019; and
- During the program’s lifetime from 2012 to 2014, Indiana’s EERS directly created 19,000 jobs, a number that has declined dramatically since its repeal.
The EERS required Indiana’s electric utilities to cut energy delivery by an average of 2 percent annually, as well as providing home energy assessments, low-income weatherization, and efficiency rebates for businesses, homeowners, and schools. In 2014, Indiana legislature passed SEA 340 to cancel the EERS. Then Gov. Mike Pence did not veto or sign the bill, so it became law, and Indiana became the first state to repeal its energy efficiency standard.
According to the AEC report, Indiana’s replacement legislation (SEA 412), passed in 2015, has done little to fill the gap. For all utilities in all years studied, costs to implement the efficiency program were less than avoided costs; every kWh of energy efficiency saved money for consumers. Ratepayers and utilities have missed out on almost $150 million in savings between 2015 to 2019, the study concluded.
A 2016 report from the Midwest Energy Efficiency Alliance found that the number of jobs created due to energy efficiency investments in Indiana dropped 37 percent from 2014 to 2015, after the EERS was repealed.
Publication date: 9/19/2018