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Indiana Proposes Bill to Protect Natural Gas Use in Homes

While some states want to prohibit the use of natural gas to curb the impact of climate change, Indiana lawmakers have proposed a precautionary bill that would prevent any specific fuel-source ban.

(TNS) — Cities across the country are pushing for electric-only buildings, some by banning natural gas, as part of an ongoing effort to curb emissions and stall climate change. But another national push is underway in state legislatures to prevent this type of ban from happening elsewhere — including in Indiana.

House Bill 1191 would limit Hoosier city and town governments from banning any specific type of fuel source for appliances and heating homes. The language is neutral, but it’s been made clear in hearings that the issue is about protecting natural gas.

The bill — which has passed out of the House and is now awaiting a hearing in the Senate — is more of a preventive measure. After all, it doesn’t appear any Indiana cities are looking to ban natural gas any time soon. It’s also just one bill of many circulating the country.

Four similar laws were passed in other states last year, and 12 bills are moving through other statehouses this year, all in states such as Kentucky or Missouri where Republicans control the legislature. Advocates say it’s a necessary effort to protect consumer choice and keep energy costs low. But others protest, saying the gas industry is trying to protect itself by taking away local control and stifling cities’ sustainability goals.

The bill’s author, Rep. Jim Pressel, R- Rolling Prairie, did not respond to multiple requests for comment.

Greg Ellis, vice president of energy and environmental policy at the Indiana Chamber of Commerce, said this bill will still allow those who want clean or renewable energy to choose it. It’s necessary, he said, for ensuring that the cost of gas infrastructure will be shared across a wider base, cutting down overall rates.

“It will help keep costs down for Hoosier residents and businesses,” Ellis said. “It keeps the choice in the hands of the consumer.”

Carmel Mayor Jim Brainard, a Republican, disagrees. He asserts that this bill would take away local governments’ power of choice. Local governments are closest to the people, he said, and he finds offense in the implication that cities can’t make their own decisions when it comes to energy and sustainability goals.

“These should be local decisions … It’s disappointing to see legislators who don’t understand that,” Brainard said. “It’s not needed right now, but it limits flexibility in the future. And we don’t know what the future holds.”

Also of concern is an amendment that makes Indiana’s legislation unique from those bills circulating around the rest of the nation.

The amendment would restrict state universities from adopting certain energy-saving requirements for campus construction, unless they can be expected to result in savings within 10 years.

It’s unclear where the amendment came from, but it raised red flags for some bill opponents, who point out universities are already required to pass projects through several layers of review.

Proponents Say The Bill Protects Consumer Choice

HB 1191 is written in a way that says cities can’t put in place policies or requirements that would prioritize one fuel over another for heat and appliances in buildings. Or as Pressel put it during a committee hearing: It’s a ban on banning natural gas.

The bill would prevent a municipality from banning new gas infrastructure and hookups in new construction. Pressel and other proponents say the measure is needed to preserve consumer choice. It should be up to residents on whether they want heat or a stovetop that’s gas or electric, they’ve said.

Without that choice, they argue, bills will likely be higher.

“We are trying to meet the needs of what Hoosiers want and Hoosiers want safe, reliable energy choices,” said Rick Wajda, chief executive officer of the Indiana’s Builders Association. “They don’t want to be told that only one type of energy can be provided to their house.”

Critics, however, question whether protecting consumers is the true aim. They point to other Indiana laws that removed net metering and the state’s energy efficiency program in recent years. Or a bill that would stop HOAs across Indiana from prohibiting rooftop solar that has not gone anywhere. Rep. Matt Pierce, D- Bloomington, even suggested a provision about HOAs be added to HB 1191, but that was disregarded.

“One needs to take a slightly broader view of all the energy bills being considered now and that have been considered and passed in recent years,” said Sanya Carley, and economics policy professor at Indiana University. “And they need to understand that not all those bills try to protect consumer choice.”

Rather, several opponents say they believe the consumer is being used as a front for the industry interests that are really at play with this bill: Those of the gas sector.

This is how the fossil fuel and utility industries work, said Charlie Spatz, a researcher with the Climate Investigations Center. He has been following these topics for years and has reviewed thousands of pages of documents.

That’s what they did with their disinformation campaign to try to cast doubt on climate change, he said. Now they are worried about the threat of electrification, or the replacing of technologies that use fossil fuels with those that use electricity.

The industry also claims that natural gas is clean and consistent with efforts to fight climate change. Scientific research, however, says that while the fuel is cleaner than coal, it’s not clean; and its growing use is emerging as one of the biggest climate change drivers.

“This is what happens. They feel they are facing an existential threat and they’re not looking to change their business practices,” Spatz said. “So instead they have a strategy to tie the hands of municipalities who want to reduce fossil fuel use and take action on the climate crisis.”

Gas and Building Industry Interests

The American Gas Association, a national organization lobbying for gas utilities, has maintained that it is at an arm’s length with efforts to pass "preemption" laws at the state level. An association spokesman told IndyStar that “we are not lobbying for bills like the one in Indiana,” and that its members direct their own policy activities in the areas they serve.

In Indiana, Citizens Energy and CenterPoint, formerly Vectren, are members of AGA. Citizens said it supports the concept that the marketplace should determine which fuels are available to customers. Much of the Gas Association’s budget comes from ratepayers through their member utilities, Spatz said, which means ratepayers are funding some of this work.

Though the association has maintained that separation, an AGA dues letter reveals the group is actively involved in these efforts. Under a section titled “Securing the Future of Natural Gas,” the letter says that AGA is “increasingly active” in the states.

“Through these efforts, we are bringing together allies to help promote the value of natural gas…” the letter, dated Nov. 20 of last year, reads. “Over the course of the year, legislation preserving energy choice for customers passed in Arizona, Louisiana, Oklahoma and Tennessee.”

In Indiana, one of those allies that is promoting this legislation is the Indiana Builders Association, a trade group that advocates for the building, construction and development industries in the state. The group spoke during committee hearings on HB 1191 in favor of the bill. CEO Rick Wajda said that gas is the preferred fuel choice for many customers and that gas prohibitions would have a chilling effect on the construction industry.

There’s another connection to the building industry: Pressel, the bill’s author, owns Pressel Enterprises, a custom homebuilding company. Pressel’s company is a member of the Indiana Builders Association and Pressel was a past president of the organization in 2016. A family member, who works as a Project Manager at Pressel Enterprises, is currently on IBA’s board of directors.

The Builders Association has been pushing several bills in this year’s legislative session. Three authors of a bill that would strip protections for wetlands and requirements for a permit to build in a wetland are all members of IBA. The same is true for the author of a bill to cut housing standards in Indiana.

It’s not unusual for the building and gas industries to be working together, Spatz said: “Across the board, we’ve seen a marriage between the two to push preemption legislation.” The gas industry is telling builders that consumers want gas, he said.

Carley, the IU professor, said this bill is a direct response to a growing trend of cities creating strong decarbonization goals. It’s their attempt, she added, to get ahead of the curve and stop Indiana cities that might follow suit.

“It’s perhaps less to protect consumers," Carley said, "and more to restrict cities ability to take steps and make changes as it relates to climate change.”

Concerns of Curbing Local Sustainability Efforts

HB 1191 would not prohibit cities or utilities from using natural gas to produce electricity. The bill solely limits governments from banning the fuel going into homes for heating and appliances.

Even so, it’s a concern for environmental advocates, who point out that burning natural gas for heat emits carbon dioxide and other greenhouse gases that drive climate change.

Heating for homes and buildings makes up 12 percent of the country’s total emissions. Of that, natural gas is responsible for more than two thirds of carbon dioxide sent into the atmosphere. According to one study from energy consulting firm E3, making all new buildings gas-free could cut those emissions — by as much as 90 percent.

Cities such as San Francisco, Berkeley and Oakland in recent years passed ordinances prohibiting natural gas in new construction.

Six Indiana mayors — including Brainard — have pledged to curb emissions as part of Climate Mayors, a network of local leaders who committed to upholding the Paris Climate Agreement after former President Donald Trump withdrew in 2017. Indianapolis is also part of the Bloomberg Philanthropies’ American Cities Climate Challenge, which provides the city resources for accomplishing sustainability efforts.

Indiana University, too, in recent years started the Environmental Resilience Institute’s Resilience Cohort to help some Hoosier local governments manage their own emissions and navigate the impacts of a warming world on their area. Seventeen local governments have signed up.

The spotlight on local governments is growing, in part because of disenchantment on the lack of action on the state and federal level. A recent survey found seven in 10 Hoosiers believed those governments needed to do more to address climate change.

Now, Carley said, municipalities are taking a leading role.

“Hundreds of cities are taking pledges and taking very aggressive actions to limit emissions,” she said. “Cities are leading the way, no doubt, and doing so because they realize they have a moral imperative to do so.”

Opponents raise questions about how HB 1191 could impact these efforts.

“Is this a way to infringe on localities working on sustainability plans, climate plans, energy efficiency plans?” asked Kerwin Olson, executive director of nonprofit consumer advocacy group Citizen Action Coalition. “Will this bill invite litigation at a later time when they try to implement those plans?… It certainly implies that.”

Extending restrictions to Indiana public universities

There is one aspect of Indiana’s law that sets it apart — perhaps takes it farther — than efforts in other states, Spatz said: An amendment that extends restrictions to the state’s public universities.

More specifically, it prevents utilities from adopting policies with energy-saving requirements in construction or renovation of buildings. It says a university can use energy-efficient materials, which often are more expensive upfront, only if it can see the return and savings within 10 years.

That’s an arbitrary number, Olson said. Those materials, like windows and roofs, are usually measured based on the life cycle of the item.

Tom Morrison, the vice president of capital planning and facilities at IU, agreed. He said that a new energy efficient roof may pay itself back in 12 years, which still would mean significant savings on energy costs over its more than 30-year life cycle. But under the amended law, they would have to scrap the roof.

“We build things to last a really long time because we have to foresee that we will be here forever," Morrison said. "So we tend to invest in infrastructure that stands the test of time but also is cost effective because we are trying to maximize the state’s investment.”

Capital projects by state universities already must be approved by the University Board of Trustees, and from there it goes to the Commission for Higher Education for their recommendation. After that, it goes to the State Budget Committee, with members of the General Assembly, which has final approval over the project.

The university analyzes the cost effectiveness of the project, Morrison said, “and the state certainly has oversight of this right now.”

It is unclear where this amendment came from or who proposed it, amendment authors can remain anonymous at the committee level. Pressel and Utilities committee chair Rep. Ed Soliday, R- Valparaiso, said they saw the amendment only about a half-hour before the hearing where it was proposed.

That means the universities didn’t know about it either, and they weren’t able to come to the statehouse to testify on the bill.

Pierce, who also is a professor at IU, said there is “zero evidence” that universities are making poor decisions when they incorporate energy efficiency or clean energy into their projects. Pressel said during the committee hearing that he didn’t feel universities had done anything wrong.

Pierce feels this amendment is worse than the original bill.

“I thought the introduced bill was kind of dumb but wouldn’t do any harm because there’s no one in the state attempting to do what the bill is trying to prohibit,” the Bloomington Democrat said. “But it’s no longer a harmless bill. It’s now a bill that’s going to add costs and bureaucracy to university projects and it’s going to tie the hands of local governments. It’s become a very bad bill.”

Pierce and Morrison said that the amendment seems to contradict the original bill. The original is supposedly about preserving consumer choice, they said, but the amendment limits the choices and decisions a utility can make.

Pierce proposed an amendment on the House floor to remove this university amendment, but his efforts failed. The amended bill passed out of the House in early February by a vote of 66 to 28. It is now awaiting a hearing in the Senate Utilities Committee, which has not yet been scheduled.

(c)2021 The Indianapolis Star. Distributed by Tribune Content Agency, LLC.

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