Download Indiana Energy Association Legislative Topics for 2016

Economic Outlook
Energy Utilities
Northwest Indiana Business Roundtable
October 30, 2015
Who is the Indiana Energy Association?
• Fourteen Investor Owned Utilities operating in Indiana
• Energy Utilities only, i.e., electric and natural gas utilities
• Not rural electrics and not municipalities
• Serve over 4.5 million Hoosiers
• Employ over 10,000 people
• Pay over $160 million in property taxes
• Pay over $118 million in income taxes
• Pay over $243 million in sales taxes
• Strong supporters of economic development
• Strong supporters of Indiana communities and non-profits
Presentation to NWIBRT – Economic Outlook - 2015
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Utilities: Economic Outlook
• Utilities are strongly linked to local, national and international
economy
Local
o How are businesses in the area doing
National
o Overall health of the economy
o Interest rates
o Fracking
o Governmental Regulations
International
o Exports and Imports
Presentation to NWIBRT – Economic Outlook - 2015
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Utilities: Current Ranking – Electric Rates
• Average electric rates are a snapshot
in time and a state will change its
ranking over time.
• Electric rates change over time.
• And individual utilities within Indiana
differ from state averages.
• Indiana utilities face significant cost
pressures including the potential
requirement to comply with the Clean
Power Plan – EPA’s rule to reduce CO2
emissions.
Most recent EIA data (July 2015) shows:
• Indiana ranked 14th lowest for
average industrial rates
• Indiana ranked 10th lowest for
average residential rates
• Indiana electric rates for industrial
customers fell from July 2014 to
July 2015 while 29 other states and
the District of Columbia saw rate
increases
• Similarly, average residential rates
fell in Indiana while 23 other states
and the District of Columbia saw
rate increases.
Presentation to NWIBRT – Economic Outlook - 2015
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Utilities: Investment Outlook
• Over the last decade Indiana’s five investor owned electric utilities
have invested $4.3 billion dollars to meet EPA regulations
• Regulations are continuing to impact investment strategies
EPA Clean Power Plan
Coal Ash rule
Water rules
• New electric generating stations
Not a great need over the next five years
Will be some renewables built
• Maintenance of existing plants is an ongoing part of utility operations
Presentation to NWIBRT – Economic Outlook - 2015
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Utilities: Investment Outlook
Customers want reliable utility service
Utility investment plans:
Utility systems expanded rapidly
in the 1950’s, 60’s and 70’s
Useful Life: 50 to 70 Years
• Significant investments to upgrade and
replace existing systems
• Planned investments will total billions of
dollars
• Will impact all aspects of utility
distribution operations
• Position companies to operate in a
modern world
 Metering
 Utility system operations
Presentation to NWIBRT – Economic Outlook - 2015
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Preparing to Meet Utility Requirements
• Develop the skills needed to perform work on utility systems
Operator qualifications to work on natural gas systems
Certified welders to work on utility pressure vessels and pipe systems
Qualified electrical workers
Skilled personnel on microprocessors
• Stay up to date on new techniques to accomplish the work safely
Like all businesses utilities need to achieve high quality at ever lower costs
• Enhance skills in working around customers
Much of the coming work will be done in people’s yards and streets
Presentation to NWIBRT – Economic Outlook - 2015
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Thank you
Mark Maassel
President
[email protected]
(317) 632-4406