The Drop on Indiana Water Issues in the 2016 Legislative Session

34886804Indiana’s water quantity issue received significant attention in the 2016 Indiana legislative session as Sen. Charbonneau continues to champion calculated steps toward a credible water policy for the state. His mantra has been “data before decisions” and the legislation this year reflects that refrain, which the Indiana Chamber strongly supports.

Senate Bill 347 (Water Resources) is Charbonneau’s 2016 flagship for the water issue. The bill does three things: 1) directs the Indiana Finance Authority (IFA) to conduct a “water loss” audit of all water utilities; 2) says the IFA will conduct a quality control assessment of well locations; and 3) instructs the IFA to study, analyze and report to the LSA by November 1, 2016, on the infrastructure needs of Indiana’s water utilities. This bill adds to the growing library of data that will guide the state’s water policy.

Senate Bill 257 (Distressed Water and Wastewater Utilities) promotes the purchase of distressed water utilities before they totally collapse. With over 500 water utilities in the state, this is a critical issue.

A cousin to SB 257 is SB 383 (System Integrity Adjustments).For many years, we have not adequately maintained our aging water and wastewater infrastructure. It is out of sight and out of mind. The cost is estimated at over $14 billion to restore this decaying system.

Senate Bill 383 provides that a water or wastewater utility may petition the Indiana Utility Regulatory Commission to recover approved charges. The Chamber supports a fair and equitable way to address this issue, for an inadequate water and sewer system will
negatively impact our economy.

House Bill 1300 (Environmental Management Matters) is IDEM’s annual catch-all bill with a variety of issues including: revising the term “land application”; revoking a temporary variance; clarifying when an antidegradation review is required; extending the vehicle mercury switch program; recycling issues and electronic devices reporting, and addressing rates and charges by regional water, sewage and solid waste districts. The Chamber supported HB 1300 as it clarifies and creates efficiencies within the administration.

House Bill 1299 (Voluntary Remediation Plan) was IDEM’s bill to give it more teeth to cull out those that are not adhering to its proposed work plan and timeline. The administration, however, pulled the bill as IDEM believes that it has enough power at this time to enforce the voluntary remediation plan (VRP) program. The Chamber believes that if a project is accepted into the VRP program that it should follow the approved plan within the identified timeline. The VRP program should not be a means to shield a site from litigation or cleanup.

Senate Bill 255 (Underground Storage Tanks) directs IDEM to conduct an actuarial study of the Excess Liability Trust Fund (ELF) that is to provide monies to clean up underground storage tanks.

The ELF realizes one penny for every gallon of pumped gasoline and diesel; the fund is now in excess of $100 million, with many millions in charges pending for cleanups. The actuarial study will identify how much money will be needed for registered tanks and the balance required to clean up “orphan” tanks that have no owners with a responsibility to remediate the site. The Chamber supported SB 255 as it promotes the restoration of sites, which potentially create a viable location for a business that will provide jobs and pay taxes.

The Chamber has long supported the use of waste products as a credible feedstock for another process. Senate Bill 256 (Legitimate Use of Solid Waste) conceptually promotes that model. If administered properly, it is a win/win as the producer of a waste saves the cost of treatment/disposal and the recipient of the material has a free or inexpensive feedstock – and valuable landfill space is not consumed.

EPA Releases New Ozone Limits

Although our air, land and water are cleaner than arguably before the Industrial Revolution, the Environmental Protection Agency (EPA) earlier this month announced its new restrictive ground-level ozone standard: 70 parts per billion (ppb). It could have been set even lower – at 65 or even 60 – which would have been more restrictive and affected a large portion of the Indiana population.

At 70 ppb, we believe that all Indiana counties will meet the standard and thus be in “attainment.” However, there is a monitor in Wisconsin that will trip the Chicago area into nonattainment and include the Indiana counties of Lake and Porter. The consequence of “nonattainment” means that there can be no business expansion or new business unless that expanded or new business does not add any additional components to the area’s ozone. Essentially, it would stop any expansion, growth or new business. Additionally, Clark and Floyd counties will likewise be pulled into the Louisville nonattainment status and there is an outside chance that a county or two near Cincinnati may be affected.

Indiana will likely meet this new 70 ppb standard because power plants have shut down or made the very expensive changes necessary to shift over to natural gas as a result of the many EPA requirements designed to eliminate coal The Indiana Chamber has strongly opposed these anti-coal provisions and will continue to do so because, despite diversification efforts, coal remains Indiana’s primary energy source.

Little Steps Can Lead to Big Energy Savings

Business direction background with two people

This column was also posted on Inside INdiana Business.

Indiana possesses a number of advantages in its business climate. One of those traditional benefits has been energy that is adequate, reliable and affordable.

The inexpensive part of that equation has come into question lately. Industrial energy rates that were once among the five lowest in the country are now around the middle of the pack. Federal regulations – ones that often impact Indiana to a greater degree due to its dependence on coal – lead the way as a major cause for the increase.

All companies, not just heavy energy users, can more closely evaluate their usage and likely lower their costs. That subject is the theme of the Indiana Chamber of Commerce’s 2015 Connect and Collaborate series – luncheons around the state this summer for Chamber members.

Here is some of the information being shared in the form of 10 energy-saving tips:

  1. Know your costs: Just as we hopefully do or should be doing at home, examine your electric power bill. You have to realize the source of your largest energy costs to be able to potentially have the opportunity to reduce those charges.
  2. Evaluate your contract: Is your current agreement the best deal you can get? You don’t know what’s possible until you ask.
  3. Lighting can be a hidden cost: Are you aware of what type of lights you use? Are they the most efficient? Are unnecessary lights turned off when not needed? Have you considered motion sensors?
  4. Air recycling: Heat rises, making it important to properly recycle your air. Have a professional examine your system. Efficient ceiling fans (or exhaust fans in warmer weather) could make a major difference.
  5. Avoiding the pressure: Steam and air pressure are common ingredients in many industries. Leaking joints, pipes and systems can be a huge energy drain.
  6. Water equals power: If you use water from a municipal treatment plant (or even your own facility), nearly 20% of that cost is energy. Examine your system to eliminate water leaks. You are paying for your water, as well as the energy it takes to process and move the water.
  7. Check the pumps: Workplace pumps are huge energy users. Assess your pumps – are they needed? Could they be changed out for a more efficient model? Would a variable speed pump make more sense?
  8. Transportation troubles: Another personal priority needs to be carried over to the workplace. Car/truck care in the form of proper tire pressure, tune-ups and other maintenance is essential. Companies with multiple vehicles are often well served by having someone responsible for the fleet.
  9. Proper planning: In addition to the modes of transportation, logistics are critical. Efficiently planning trips and scheduling deliveries will help conserve power and enhance productivity. This applies to organizations of all sizes.
  10. Compressing the fuel: Compressed natural gas continues to gain favor among many companies with heavy delivery schedules. An upfront capital outlay is often rewarded with a very timely return on that investment.

Chamber President Kevin Brinegar, I and a local business leader look forward to sharing this information and talking energy with members at each stop on our Connect and Collaborate tour. Your business could be the beneficiary.

Cheer Earth Day, Not EPA’s Latest Moves

87741351Something to celebrate for Earth Day: Indiana’s air quality has not been as good as it is today in over 60 years! I remember the first Earth Day 45 years ago and for a decade served on the Indiana Earth Day board. I’ve witnessed step by step Indiana’s group effort to make the air cleaner and cleaner.

Today, more than 90% of Hoosiers live in areas that meet ALL air quality standards. In 2005, that number was only 61%. To monitor all the air quality and progress, Indiana operates and maintains more air quality monitoring sites than any other state in the Midwest on a per-person basis. We’re on top of it.

Indiana does have a few remaining air issues in pockets of the state, but those are being addressed. Whether that’s the lead level in Muncie, the ozone standard in LaPorte County or the one-hour sulfur dioxide standard in parts of five counties – all are making progress and should be remedied in a reasonable timeframe.

Still business and industry in Indiana and across the nation continue to be whipped by the Environmental Protection Agency (EPA) with regulations that are grossly unfair and frequently tightened on a whim. All the vast improvements go unnoticed and the goalposts keep moving further and further away. Ironically, as our ozone levels have declined, the incidence of childhood asthma has actually increased.

The impact of EPA’s pending controls is real and will cost every business and person that uses electricity. Yet there is no real environmental benefit that will be realized. Industry in the U.S. and Indiana has spent billions of dollars installing expensive pollution control equipment. The data clearly shows that our emissions have substantially decreased. In other words, we’ve pretty much squeezed everything out of the ozone orange.

Over the many years, Earth Day has helped bring attention to industry practices that needed scrutiny. That was a very good thing. But the EPA is taking its efforts too far. It’s time for all of us to take a deep breath and exhale. And you know what? We can do that outside today because the air is so much cleaner.

Chamber-Supported Water Bills Pass Out of Committee

The Chamber supports two bills that recently unanimously passed out of the Senate Environmental Affairs Committee.

SB 473 requires the Indiana Department of Natural Resources (IDNR) to establish a program under which volunteers may monitor the water resources, which includes both ground water and surface water. This data will be provided to IDNR. Provides that the department shall: (1) train the volunteers participating in the program in the proper collection and transmission of data; (2) determine the location and ensure the adequacy of the monitoring wells used in the program; and (3) conduct water resource monitoring independent of the program to verify the quality of the data derived from the program.

In testimony, the Chamber supported the development of a comprehensive water resources plan. An essential element of that plan will be adequate and reliable data. Senate Bill 473 creates a mechanism that will allow the voluntary collection of data from diverse sources which is then managed by state and federal agencies. This data will fill a current void in the depleted monitoring network with minimal cost and effort by the state.


SB 474 requires the Indiana Finance Authority to prepare an analysis of the planning and long-range needs of: (1) the water utilities serving the 15 most populous cities in Indiana; and (2) five other water utilities selected by the authority, each of which serves fewer than 10,000 customers.

The Chamber testified that an integral part of a water resources plan is the ability of the state’s water utilities to create and execute long-range plans. Senate Bill 474 uses the ongoing efforts of the Indiana Finance Authority to analyze a sampling of the state’s water utilities to assess their ability to construct and implement long-range plans.

An Energy/Environmental Issue Primer for the Start of Session

The 2015 legislative session began Tuesday and will adjourn no later than April 29. This “long session” will include the state’s $30 billion biennial budget and likely see more than 1,000 bills filed. Bill filing deadlines are January 13 and 14 for the House and Senate, respectively. You can count on the environmental and energy area to add its fair share of legislative ideas to the mix. In the environmental arena, we expect to see the following:

  • The Indiana Department of Environmental Management’s perennial laundry list of technical “clean-up” items
  • Rep. David Wolkins’ “No More Stringent Than” annual initiative
  • Something related to “brownfields” and clean-up efforts
  • Anti-harvesting of Indiana’s hardwoods
  • Above-ground storage tanks controls

In the “water resources” area, we expect to see the following:

  • Legislation to direct the Indiana Finance Authority to survey/examine the larger – and a few smaller – water supply utilities in the state
  • Establish an Indiana Water Resources Institute
  • Create incentives to promote water utilities to invest in infrastructure improvements

And it is likely that the electric power/energy area will really heat up (sorry) as multiple issues rise:

  • Legislation related to the Governor’s energy plan
  • Energy efficiency measures
  • Allowance to purchase electric power outside the current provider
  • Install a requirement that any new electric power generation be allowed competitive bids/procurement
  • Establish a rate case schedule for electric power utilities of XX (to be determined number of) years
  • Address the rural vs. municipal territorial/compensation dispute

Not all of these issues are ones that the Indiana Chamber will necessarily oppose or support – they will be part of the discussion but some may never get a hearing. This is like your friendly weather forecaster trying to tell you if it will rain, snow or be sunny in one month.

Indiana Can Win the Water Battle

(The following column from Vince Griffin, our VP of environment and energy, appeared in the Inside INdiana Business newsletter.)

Wouldn't it be nice if every time you got in your car, you had a full tank of gas? You wouldn't have to worry about where you were going to fill up next or how much it was going to cost. Unfortunately, this is how most Hoosiers view the state's water supply.

Right now Hoosiers are using water with little to no regard for where it will come from in the future. Most people take for granted everyday things such as how they are able to have water available every time they turn on the faucet. As the most manufacturing-intensive state in the country, Indiana uses vast amounts of water each day to keep its economic engine operating. The aquifers and rivers also support agricultural production in Indiana that contributes almost $38 billion to the state's economy.

This abundant resource may become unreliable if we do not take the proper steps now. Indiana, along with other states east of the Mississippi River, currently doesn't have a plan that secures its long-term water supply.

A clear and concise strategy is required for getting water to Hoosiers who will need it most. In order to do this, three questions must be answered:

1. Where is the water?
2. Who needs the water?
3. How do we get the water to where it is needed at the right time?

Central and southern Indiana have fewer aquifers than the northern half of the state. Without some policy that promotes regional distribution systems, development could be geographically constrained. Regional supplies would alleviate those concerns.

The Ohio River could serve as one resource. Twelve billion gallons of water flow through several Indiana cities and towns that sit on the river. At several points along the Ohio, there are ranney wells built during World War II to collect water from the river. But they have not been used in recent years. By adding pumps to these wells and building a system to distribute the water farther north, future shortages could be addressed.

Other options also would be available. All would be focused on moving the water to where it is needed. Doing so will help stabilize the economic performance of southern Indiana.

Lessons can be learned from Texas. Despite experiencing a tremendous population growth, it has no usable water source. In order to combat this problem, the state is divided into water regions. The supplies being used by each are closely tracked and, depending on consumption, water moved to the regions that need it most. This system allows for continued economic growth as potential shortages are addressed.

While there are future challenges, now is a time of opportunity. Unlike many areas of the country, Indiana has water resources. We can invent our energy and water future by taking charge and planning for the future.

Senate Enrolled Act 132 in 2012, which enables the state to gather information from water utilities, will help policymakers make informed decisions. The data also will help the utilities make smart choices when it comes to distributing their resources. Utilities submitted their surveys earlier this year, and the combined findings will be reported in September.

By being proactive, Indiana can become an example for others to follow. Early commitment is also critical as projects to distribute water supplies, while tremendously beneficial, will be costly.

In a recent speech, Dr. Jack Wittman, a national water expert based in Bloomington, summed up the importance of creating a water plan: "The first state, east of the Mississippi, to come up with a plan is the winner."

Indiana has the opportunity to be that winner. The state will soon have the data; it then needs to use it. The goal is to have a plan in the next two years, then execute it to secure the water future for all Hoosiers.

Rockport Plant a Complex Issue in 2013

While there was quite a bit of activity in the environmental area in the 2013 Indiana legislative session, there was little heavy lifting and relatively few changes to environmental law. Yes, it is a work in progress, but Indiana business and industry has done so much to reduce its air, land and water emissions that there are fewer and fewer legislative fixes needed. Still, watch for a number of issues to be studied this summer by the Environmental Quality Service Council (EQSC).

Water and wastewater issues are of concern to the Indiana Chamber. Related to that, there were a number of legislative items addressing the wonderful world of water and sewage. The struggle is between those who are not on a sewer system and those who want them to be. There were also several bills to address the overcharging by water and wastewater utilities of those outside the jurisdiction of the municipality. The Indiana Utility Regulatory Commission (IURC) was added to the current court system as an avenue to take a grievance.

Rockport Plant
The energy arena provided much more drama: At the center, the proposed nearly $3 billion Rockport coal gasification facility on the Ohio River in Spencer County, which generated strong non-partisan emotions. Senator Doug Eckerty (R-Yorktown) and Rep. Suzanne Couch (R-Evansville) were the Senate and House champions who stood strong against an emotional plea from those in the Rockport area. The Indiana Chamber is not opposed to the Rockport project and well-recognizes the potential positive economic development with the plant construction, coal mining jobs and related transportation. However, the funding formula for this project is flawed – any losses at the plant would be paid for by the state’s two million residential and small/medium-sized business taxpayers for some 30 years. Speaker Brian Bosma (R-Indianapolis) called the Rockport bill the most complex issue to face the General Assembly this year and, in fact, held the final third reading vote until after the state budget was approved in the House; it was the very last bill for consideration at nearly 1:30 a.m. on Saturday,
April 27. The Indiana Chamber joined forces with the Indiana Manufacturers Association and Indiana Farm Bureau in support of the Rockport bill that, in the end, passed the House by a convincing 70-28 vote and the Senate by a 43-7 margin.

It contains much-needed additional protections to ensure that small/medium-sized businesses and residential ratepayers will not pay excessive additional rates for the natural gas produced by this plant (if it is built).

The major bill for the electric power industry was SB 560. The Indiana Chamber was neutral as the language carried a “tracker” provision which allows an expense to be tracked most directly into a ratepayer’s bill without a rate case. The Indiana Chamber has members on both sides of this issue. Senate Bill 560 allows the expenses related to “transmission and distribution system improvement charges” (TDSIC) to be “tracked” into bills but requires the utility to submit a seven-year plan and present a full rate case to the IURC within that seven years (if it uses the tracking mechanism).

Interim Activity
The legislative summer committees will likely see many environmental and energy issues as some of the legislative attempts were punted to the summer study docket and other items discussed will probably show up on the agenda. Senator Ed Charbonneau (R-Valparaiso) will likely chair the EQSC this summer and has clearly stated his interest in addressing a variety of topics. Some of the items that are already identified that may be studied in the EQSC or other legislative summer study committees include: agricultural fugitive dust, consolidation of all water management functions under one agency, single point of contact for Indiana Department of Environmental Management 401 certification and Department of Natural Resources flood control, small modular nuclear reactors, non-jurisdictional water and wastewater rates and charges, and Indiana’s water plan status.

Air Transport Rule Reviewed, Chamber Comments

The Indiana Chamber submitted comments opposing the Environmental Protection Agency’s (EPA) “transport rule.” The rule is the result of a suit by northeastern states claiming that the states west of it are responsible to some degree for their particulate matter and ozone. Indiana business and industry has invested many billions of dollars in recent years to reduce the levels of a number of pollutants including particulate matter and ozone. There is data that shows that the northeast particulate and ozone levels are primarily coming from the northeast states themselves. These pollutant emissions from Indiana facilities are dropping and will likely continue to drop over time. The Chamber’s EPA comment letter states:

Before new rules are imposed on a still-weak economy, it makes more sense to recognize what improvements in air quality have already occurred under the Clean Air Interstate Rule. As we continue to climb out of the recession, the last thing that government should do is create additional costs to the economy without substantiated reasons. We applaud the EPA’s efforts to improve air quality for all Americans and to address downwind issues. Hasty action, however, will have economic consequences for our members without any assurance that the rule will deliver the desired results any faster than the nation can achieve on its current path. We urge the EPA to delay the transport rule until there is a clear indication that comparable results cannot be achieved through existing measures. The EPA also should establish realistic deadlines that will not punish electricity consumers.

Choose the Proper Course on Carp

Asian carp are a serious threat to the waterways of the Great Lakes, but the solution to their potential invasion must not create additional economic harm. 

The carp, which can weigh up to 100 pounds, are predators. They would threaten numerous fish species native to the area, the broader environmental balance and even boaters and tourists striving to enjoy recreational opportunities. Once positive contributors to helping remove algae from Southern fish ponds, they are now regarded as among the most dangerous of invasive species. 

One misguided attempt to deal with the risk is to close the navigational locks in the Chicago area. This would disrupt hundreds of millions of dollars’ worth of shipping and essentially sever Northwest Indiana’s crucial water-based commerce with the rest of the world. 

Federal investment, in the form of additional electric barriers, would prove more effective in keeping the carp out of the Great Lakes while still allowing Indiana and the other states in the region to maintain the shipping prowess that benefits so many companies and their employees.

Washington is paying attention – as it should. The barrier plan emerged from a White House-led summit. Indiana and its neighbors must now work together to support this prudent alternative. The threat is real; a radical closure of shipping lanes and economic opportunity, however, is not the answer.

A new organization called Unlock Our Jobs has formed to tackle this issue, offering alternative options while keeping our waterways open for business. Its web site can also help you quantify the economic impact of river traffic and lock closures on your state.