Power struggle: Industry challenges utilities on electric rates
Indiana’s near lowest-in-the-nation energy prices were a key reason the Japanese maker of Subaru vehicles chose Lafayette over sites in six other states in 1986 to start U.S. production of the then little-known brand.
Today, production has surged to around 300,000 vehicles per year and more than 3,800 people work at the sprawling auto plant just off Interstate 65.
Tom Easterday, Executive Vice President of Subaru of Indiana, recently spoke to a a small group of Indiana legislators before a tour of the plant.
But Easterday, a lifelong Hoosier, said he’s not so sure Subaru parent company Fuji Heavy Industries would make the same decision today. That is because industrial electricity prices have soared in Indiana in the last decade, including those charged by Duke Energy, which serves Subaru and other manufacturers in the Lafayette area.
In 2003, only four states in the nation had lower average industrial electricity prices than Indiana, according to U.S. Energy Information Administration data. By 2015, 25 states had lower prices than Indiana. Average industrial electricity prices have surged 75 percent in Indiana in that time, while only increasing 37 percent in the nation as a whole.
“We are losing that tremendous advantage we once had,” Easterday told legislators and a few other local business people that morning at the plant’s training center.
Easterday’s briefing for legislators and the following plant tour were one of a series across the state organized by Indiana Industrial Energy Consumers Inc., an alliance of 26 of the state’s largest manufacturers.
Among those companies are some with a large presence in Northwest Indiana, including ArcelorMittal USA, Praxair, Alcoa, BP and Marathon Petroleum. ArcelorMittal’s Burns Harbor steel mill was the setting for a June 16 briefing and tour for Northwest Indiana legislators and others conducted by Indiana Industrial Energy Consumers.
The issue gained more urgency for those manufacturers Thursday when their utility, NIPSCO, applied to the Indiana Utility Regulatory Commission for a rate hike that would increase industrial customers’ bills about 7 percent on average.
NIPSCO Chief Executive Violet Sistovaris said the utility plans to continue programs that aid its industrial customers. Those include one for providing backup power when those customers generate their own electricity and another, a discount when they voluntarily allow a portion of their power to be switched off during periods of peak demand in NIPSCO territory.
“Maintaining competitive electric rates is important for customers; it’s important for the region; it’s important for the state,” Sistovaris said. “We will continue to work with our industrials.”