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CHOICE Program FAQ
This FAQ is provided purely for informational purposes. It is based on the Clean Energy Law, IC 8-1-37 and IC 4-22-2-1. Please refer to the specific Indiana Code for confirmation. For specifics on the IURC rulemaking (170 IAC 17) regarding the choice program, click here.
What is CHOICE?
CHOICE is the acronym given to the Indiana voluntary clean energy portfolio standard (CPS) program. It stands for Comprehensive Hoosier Option to Incentivize Cleaner Energy. In a nutshell, Indiana's utilities receive an incentive to increase the amount of renewable energy sources in their portfolio. It is a sliding scale that for program participants means the electricity they provide their customers will include an avereage of four percent from renewable sources between 2013 and 2019. Beginning in 2019, that pecentage jumps to seven pecent and stays at that level until the end of 2024. In 2025, the percentage goes up and stays at 10 percent.
RPS, CPS, RES...they are all about the same, a level of expectation that a percentage of power generated for commercial and residiential use will come from renewable sources. In many states, this renewable requirement is mandatory. In order to ensure that the impact on utility rates would be kept to a bare minimum, the Indiana General Assembly designed the Indiana CHOICE program to be voluntary. No utility in Indiana is required to join the program or will be specifically penalized for not joining the program.
The Indiana Utlity Regulatory Commission finished its rulemaking on the CHOICE program in late 2011. The CHOICE program started January 1, 2012 but utilities won't be required to meet the first goal until January 1, 2013. Utilities have two years from the start of each of the first two goals (4% in 2013 and 7 percent in 2019) to enter the program.
Electricity suppliers that are approved by the Indiana Utility Regulatory Commission to take part in the program. This potentially would include all of the electic utilities in Indiana.
The CHOICE program is regulated by the Indiana Utility Regulatory Commission. Electricity suppliers who take part in the CHOICE program must apply to and be approved by the IURC, as well as prove their compliance with the program's ongoing requirements.
What is CHOICE going to cost the electricity consumer?
Even without the CHOICE program, all utility rate increases must be approved by the IURC. Under the CHOICE program, electricity suppliers cannot increase what they charge customers any more than what would happen if they were not participating in the CHOICE program. In other words, electricity rates may go up between now at 2025, but not because of the CHOICE program.
What do the utilities get out of the CHOICE program?
Electricity suppliers are provided an incentive to take part in the program and reach the three Clean Energy Portfolio Standard (CPS) goals. After attaining each goal, the utility may be allowed to increase its Return On Equity by as much as 50 basis points over its currently approved rate of return.
What clean energy resources apply?
It is not just wind turbines or solar panels that will increase an electricity supplier's percentage of power from renewable sources. Under Indiana's Clean Energy Law, there are 21 clean energy "technologies" that can be used in the power mix. They are:
- Energy from wind
- Solar energy
- Photovoltaic cells and panels
- Dedicated crops grown for energy production
- Organic waste biomass, including any of the following organic matterthat is available on a renewable basis:
Agricultural Crops
Agricultural Wastes and residues
Wood and wood wates, including:
Wood residues
Forest thinnings
mill residue wood
Animal Wastes
Animal byproducts
Aquatic plants
Algae - Hydropower
- Fuel Cells
- Hydrogen
- Energy from waste-to-energy facilities, including energies derived from advanced solid waste conversion technologies
- Energy storage systems or technologies
- Geothermal energy
- Coal bed methane
- Industrial byproduct technologies that use fuel or energy that is a byproduct of an industrial process.
- Waste heat recovery from capturing and reusing the waste heat in industrial processes for heating or for generating mechanical or electrical work
- A source, technology or program approved by the commission and designated as a clean energy resource by a rule adopted by the commission under IC 4-22-2 (Executive Order) including Landfill Methane Recovery.
- Demand side management or energy efficiency intiatives that:
A. reduces electricity consumption or
B. implements load management, demand response, or eenrgy efficiency
measures designed to shift customers' electric loads from periods of
higher demand to perieds of lower demandas a result of equipment installed,
or customers enrolled, after January 1, 2010 - A clean energy project described in IC 8-1-8.8-2(1)
- Nuclear energy
- Electricity that is:
A. generatetd by a customer owned distributed generation facility that is
interconneced to the electricity supplier's distribution system in
accordance with the commission's interconection satndards set forth
in 170 IAC 4-4.3; and
B. supplied back to the elctricity supplier for use in meeting the electricity
supplier's electricity demand requirements in accordance with the
commission's net metering rules set forth in 170 IAC 4-4.2 - Combined heat and power system
- Electricity that is generated from natural gas at a facility constructed in Indiana after July 1, 2011 which displaces electrcity generation from an existing coal fired generation facility
Per the IURC requirments, technologies 17-21 can only comprise no more than 30% of the total renewable energy resources an electricity supplier claims for the CHOICE program.
An electricity supplier can also obtain "Clean Energy Credits", and use these as an acceptable part of its clean energy portfolio standard. Clean energy credits are the result of clean energy produced by one of the named technologies. This system allows an electricity supplier to not have to build or purchase its own producers, but rather obtain (purchase) the credits from facilities owned by others.
