Energy Efficiency Standards

Indiana does not have an energy efficiency resource standard (EERS). The state’s previous EERS was ordered by the Indiana Utility Regulatory Commission (IURC) in 2008, and overturned by the General Assembly in 2014. By statute, utilities in Indiana are required to file energy efficiency plans consistent with the utility’s latest integrated resource plan.

The IURC began updating the energy efficiency planning rules to be consistent with legislated requirements in 2015 through a public process. The formal rulemaking process is expected to be completed in 2017.

Large industrial users are allowed to opt out of participation in utility demand-side management programs.

Resource Planning

The General Assembly updated Indiana’s resource planning requirements by legislation in 2015. The Indiana Code requires electric utilities to file integrated resource plans that consider both supply and demand-side resources to meet future energy needs. The Indiana Utility Regulatory Commission (IURC) began updating its rules for IRPs to be consistent with statutory requirements in 2015 through a collaborative public comment process. Formal rulemaking is expected to complete in 2017. Under the revised rules, utilities will file IRPs every 3 years to cover a 20-year planning horizon.

Rate Structures & Incentives

Cost Recovery

Energy efficiency and demand response program costs can be recovered through a periodic rate adjustment mechanism or through the utility’s rate case.

Lost Revenue Recovery

The IURC is required to approve reasonable lost revenue recovery for energy efficiency programs.

Utility Incentives

Utilities may propose a financial incentive for their demand-side management plan.

Noncompliance Penalties

As there is not a statewide energy efficiency standard, there are not penalties for failing to meet targets. Utilities that do not reach their goals in approved efficiency plans may not receive the full performance incentives, in accordance with their approved incentive mechanism.

Stakeholder Collaboration

Indiana does not have a statewide energy efficiency stakeholder collaboration group. Investor-owned utilities are required to hold a series of public stakeholder advisory meetings as part of their IRP process.

Program Evaluation

Utilities are required to file an Evaluation, Measurement and Verification (EM&V) plan as part of their energy efficiency plan.

Cost-effectiveness Testing

Energy efficiency plans must be shown to be cost effective using one or more of the standard cost-effectiveness tests. Utilities are required to report the benefit-cost ratio from their tests, as well as the total costs and total benefits used in the calculation.

Net vs. Gross

Indiana utilities are required to report both gross and net savings potential and to account for free-ridership and spillover in their energy efficiency plans.

Technical Resource Manual

Indiana's statewide Technical Resource Manual (TRM) was filed with the IURC in 2013 and is in use by the state’s utilities. An updated TRM version was commissioned prior to the 2014 repeal of Indiana’s EERS and subsequently completed, and has been introduced into evidence in several commission proceedings. Indiana’s utilities have not yet uniformly adopted the newest version.

State Energy Plan or Vision

The 2006 Hoosier Homegrown Energy Plan was Indiana’s last statewide strategic energy plan. There is not currently an active, published state energy plan.

State Agency Energy Reduction Requirement

Indiana does not have a specific requirement for the reduction in energy use by state agencies, though the state does require energy efficient building standards for new and rehabbed state buildings.

EE in New State Buildings

Governor Daniels' 2008 Energy Efficient State Building Initiative requires the Department of Administration to maintain standards for all new state buildings that include analysis of the cost-effectiveness of achieving energy efficiency in the building.

Key Policymaker Contacts