Power infrastructure: Indiana URC


State Commissioners

Fortnightly Magazine - June 18 2024

Ten Commissioners discuss their concerns about electric power infrastructure.


PUF's Paul Kjellander: What are the most important needs for electric power infrastructure?

Commissioner Sarah Freeman: Recently, I read articles telling me that we need to keep coal online and build gas, that new nuclear is the best solution to our energy needs, and that renewables and storage can handle everything that's coming our way.

I'm glad Indiana is an all-of-the-above state when it comes to infrastructure needs because, otherwise, I might flounder when receiving all that type of information. Specifically looking at infrastructure needs, I identify transmission as a primary need. We need it to reduce our queues at the RTO level, decrease congestion, and spur renewable growth, particularly in optimal siting locations.

Supply chain issues, which aren't quite infrastructure, identify the need for a healthy supply chain, so we have the infrastructure needed for system resilience. I'm also looking at the need for grid-enhancing technologies, so we can lessen our reliance on large and costly physical infrastructure.

Also, I would be remiss if I didn't mention, I suppose, distributed energy resources and the needs they're going to bring going forward.

PUF: What are the greatest concerns for infrastructure needs?

Commissioner Sarah Freeman: Primarily cost, as well as challenges in siting and permitting different types of infrastructure across the country. I see the potential overbuilding of gas as a concern, as a bridge across the resource transition, which could possibly result in stranded assets and increased costs to my ratepayers.

Of course, if that overbuild happens, it's based on the intersection of well-intended policies dealing with environmental and reliability concerns. Timing is a concern of mine.

We're seeing a resurgence of at least an interest in nuclear as a resource, but the extended timeline it takes to build those resources and get them online relative to the immediate need is concerning. Along with that, the ability to accommodate the projected immediate increases in load in the short term.

PUF: Should utility regulation adjust to address some of the infrastructure needs?

Commissioner Sarah Freeman: I don't think any adjustment in Indiana is needed at this point. I'm an economic regulator in a traditional ratemaking state with vertically integrated investor-owned utilities.

Our framework is solid. We're operating under tight timeframes already. I would not want to see any adjustments to the regulatory timelines because that would hamper our ability to do our job well.

I do see that there is a responsibility on the potentially adversarial parties before us to resolve as many issues as possible before they start a regulatory proceeding, to simplify what we are dealing with in these shortened time frames. It should yield better and more timely outcomes, as well as reducing the likelihood of an appeal after our decisions are rendered.

While I as a regulator am the ultimate decision maker on these issues, regulators aren't the only ones with the power, ability, and responsibility to determine outcomes.

PUF: Looking out to 2040, how different do you see electric power infrastructure looking?

Commissioner Sarah Freeman: I'll take a risk and say we're going to see more grid-hardening technologies due to man-made climate change and a greater number of extreme weather events between now and 2040. We'll see more automation of the technologies as AI technology advances.

Alluding to prior answers, we might see increased stranded assets if, in the shorter-term, storage and renewables or other technologies are able to supply needed capacity, alongside a projected gas build-out through the end of the 2020s.

We will probably see more load-side resources at both the residential and C&I customer classes. Also, some of the more residentially-based technologies; smart home and vehicle-to-grid could possibly be operating at scale by then, which would change the landscape. My staff asked me to also say fusion.

PUF: How do infrastructure needs compete with concerns about affordability?

Commissioner Sarah Freeman: I don't like to think of it as a competition, first of all. But if I need to think of it as a competition, I'll say they're both winners in that they occupy a large space in my mind all the time.

Ideally, we'll be looking at affordability and the infrastructure that is needed to maintain reliable service together, where one isn't taking precedence over the other, but they're both being evaluated simultaneously and comprehensively.

We know infrastructure costs what it costs, and salaries and wages are paid at the level needed to maintain an experienced workforce for provision of these essential public services. But we are going to have to scrutinize more as to who bears the cost of providing the services.

We're going to need wide-ranging types of support, perhaps looking at more creative partnerships among utilities and other stakeholders for assignment of costs to the actual cost causers and beneficiaries of service, because sometimes those may not be the direct customers of a regulated utility.


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