INDIANAPOLIS (AP) — Indiana's largest power companies are set to reimburse their customers $32 million after falling short on spending for energy efficiency last year.
Six of the largest electricity and gas providers budgeted $74.4 million for Energizing Indiana, a state-mandated energy-saving initiative the companies fund out of rates paid by customers.
But the companies spent only $42.4 million, according to a July 9 regulatory filing, the Indianapolis Business Journal reported (http://bit.ly/18E0M94 ).
State officials say the unspent money has to go back to customers, but they would not elaborate on how that would happen because those decisions are still being ironed out.
Energizing Indiana program coordinators blame the shortfall on first-year growing pains after the program's launch in January 2012.
In an encouraging sign, the program spent only 57 percent of its total budget in 2012, but managed to achieve 73 percent of its energy-saving goal since power companies achieved a lower-than-expected cost per kilowatt hour conserved.
"We're actually coming in cheaper and more efficiently and getting the same (energy) savings," said Bob Nuss, managing director for Energizing Indiana.
The program's origins date back almost a decade: The Indiana Utility Regulatory Commission launched an investigation in 2004 into whether power companies' energy-efficiency programs were actually effective. At the time, each company ran its own programs.
After five years of public hearings, state officials decided the companies were not effectively running programs on their own.
So in 2009, the IURC pulled together six of the largest power providers: Duke Energy, Indianapolis Power and Light, Indiana Michigan Power, Northern Indiana Public Services Co., Vectren and the Indiana Municipal Power Agency.
The Indiana Office of the Utility Consumer Counselor, the Indiana Industrial Group and the Citizens Action Coalition_a utility watchdog_also joined the group, which regulators charged with devising a set of statewide programs that would more effectively reduce energy use.
The solution was Energizing Indiana, an initiative that would require the power companies to financially support energy-efficiency programs offered statewide_not just for their own customers.
Five "core programs" offer services ranging from weatherization for low-income houses to providing rebates to businesses that install more efficient equipment or appliances. Companies still offer separate programs on their own.
The commission set up a contract with Atlanta-based consultant GoodCents to run Energizing Indiana through 2015, with an option to extend the agreement. The power companies pay GoodCents by adding charges to monthly bills. Charges vary from company to company, but they usually amount to a few dollars per month for residential customers.
The problem was that the new program didn't work as effectively as it was supposed to in its first year.
"I wouldn't say we were happy with it," Nuss said. "We expected much better. We were hoping for much better."
Energizing Indiana reported achieving 73 percent of its goal for the amount of electricity it helped customers save. Projected savings amounted to 416.7 million kilowatt hours_compared to more than 30 billion that the federal government says Indiana consumes in a year.
Companies, regulators, consumer advocates and outside evaluators agreed that Energizing Indiana missed its marks in 2012 because it was the first year.
"It's very hard to judge just on one year, let alone the startup year," said Anthony Swinger, a spokesman for the Office of the Utility Consumer Counselor.
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