Dive Brief:

• Indiana on Tuesday passed House Bill 1414, which will make it harder for utilities in the state to retire their coal generation.

• The House version of the bill was significantly altered in the Senate, drawing greater support from critical groups including the Indiana Energy Association (IEA) which represents electric and gas utilities in the state. To reach a compromise in conference committee, legislators removed Democratic Senate and House representatives from the discussion.

• The final version is a hybrid of the House and Senate bills, leaving out a provision from the House that would have allowed utilities to keep up to 90 days of fuel supply on site, but extending the sunset provision back to 2021 and keeping other House language that adds layers to the coal plant retirement process.

Dive Insight:

Conference committee reports are generally supposed to sit 24 hours before being considered by the greater assembly, under Indiana House rules, but the legislature chose to "suspend" those rules in order to move forward on a vote to pass HB 1414 within the same day of issuing the final version.

The final bill passed the House 55-38 and the Senate 28-21.

It has had a rocky path through the legislature since Rep. Edmond Soliday, R, first introduced it to the House in January, drawing a diverse coalition of opposition from business interests, environmentalists, clean energy groups and utilities.

But stakeholders saw the Senate version as more tame, especially the removal of the 90-day fuel provision, which many believed was a clear attempt to bail out the state's coal mining industry by requiring utilities to hold more coal on site than they needed.

"The [Senate] version of the bill eases concerns that had been raised by the Indiana Energy Association," IEA president Danielle McGrath said during a March 5 conference committee hearing on the bill. 

Specifically, the Senate version "removed language that could lead to litigation and uncertainty" and also "honored the business decisions that have already been announced through the integrated resource planning process," McGrath said.

"From where we started the session to where we are now, that's a huge progress in terms of the impacts of this bill," Director at Advanced Energy Economy Dylan Reed told Utility Dive.

The hybrid version of the bill keeps the fuel language out, but reverts the sunset date back to the House's proposal of May 1, 2021. The Senate version would have had the bill expire at the end of this year, aligned with the end of Indiana's energy task force deliberations, intended to provide the state with policy recommendations based on the status of its power sector.

The bill also goes back to the House's language on utilities ability to retire legacy coal plants or any generation considered a "reliable capacity resource." 

Utilities must give the Indiana Utilities Regulatory Commission at least three years notice before retiring a legacy resource and may not retire or otherwise transfer the ownership of a reliable capacity resource without receiving regulatory approval.

The bill was borne out of concern over rapid coal plant retirements in the state. Utilities across Indiana have been finding over the past year that solar, wind and natural gas often present cheaper alternatives than maintaining aging coal-fired plants.

Republicans on the task force raised concerns during meetings and during this legislative session that these retirements represent a threat to grid stability, though critics have pointed out that utilities have robust systems in place for maintaining reliability.

As the state's task force wraps up its discussions and makes policy recommendations for 2021 at the end of this year, Reed said he hopes to see the state think less about how to stop coal plants from retiring, and more about how to integrate renewables and clean energy technologies onto the grid.

In the past two years, "the only energy bills [the legislature has] really considered have been focused on how do we delay or stop entirely coal plant closures?" he said. "What we'd like to see is more consideration from the legislature in how you handle the integration of [clean energy] technologies in a cost effective way that ultimately is going to benefit reliability."

The bill also keeps in language that sets state grant money aside for coal workers who have lost their jobs.

No plants are scheduled to retire before the sunset date of May 2021. HB 1414 is now headed to the governor's desk.