Legally, your electricity utility is required to provide you with the service “at the lowest possible cost that is reasonably possible.”
That’s why it’s disappointing to see CenterPoint Energy proposing to build a new natural gas power plant expected to run less than 10% of the time, at a cost of $900 million, or about $23 per month per residential customer. No matter how you look at it, it’s a bad deal.
Hoosiers in the CenterPoint service area are already saddled with the highest rates of residential electricity in Indiana and, on average, spend the highest percentage of their incomes on electric bills. Local companies struggle with workforce and supply chain issues as they try to make ends meet.
Even rising energy costs will make it difficult for Evansville to attract new economic activity. But the power plant proposal also makes no sense in the context of CenterPoint’s commendable clean energy goals, which it claims are some of the most ambitious in the utility industry.
CenterPoint aims to achieve net zero emissions by 2035 – just 13 years away. To comply with this obligation, this new gas plant may have to be closed decades before the end of its useful life — and before it is paid off. This would leave Evansville residents and businesses in a bind to pay for the capital costs of the plant, even if it’s idle, not producing electricity.
Alternatively, CenterPoint could buy “carbon offsets” to offset continued emissions from burning fossil fuels, even though the facility says it intends to reach a net-zero target with “minimal reliance” on such offsets, which could increase costs to customers.
But there are other good reasons to move away from natural gas rather than double its production at a new power plant. Like gasoline, natural gas prices have risen in recent weeks. That’s because both are globally traded commodities that are prone to sudden (and sometimes severe and extended) upward price swings. Locking customers in this price volatility is particularly harmful.
When these plants operate during times of high fuel prices, CenterPoint will not pay for these costs – they will be passed directly to customers.
What should CenterPoint do instead of building an expensive and risky gas station? Invest more in clean energy resources that lower energy costs, protect against unexpectedly high fuel prices, stimulate local economic activity, and create jobs. When paired with energy storage technologies, cost-effective solar and wind energy resources can meet most of the same energy demand as the proposed natural gas plant.
Then, helping customers become more energy efficient will make building this new fossil fuel resource unnecessary. Installing high-efficiency lighting and electrical appliances, insulating homes, and upgrading to smart thermostats have the added benefit of permanently reducing residential and commercial electricity bills.
The efficiency sector already employs 49,100 Hoosiers, and the entire advanced energy industry has 83,300 jobs within the state. Both are poised for growth if utilities turn to advanced energy technologies in place of the soon-obsolete fossil fuel power plants.
This offer is unfair to CenterPoint customers. When it comes time to approve or reject a new gas plant, the Indiana Utilities Regulatory Commission must tell CenterPoint to come back with a better deal for its customers, businesses, and community.
Sarah Steinberg is director of policy for the Indiana Advanced Energy Economy, the government branch of the AEE National Business Association, which advocates for clean energy policies.
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