Energy Incentive Programs, Indiana
Updated October 2008
Below you will find questions and answers regarding Indiana's utility energy efficiency programs, including options for load management, demand response, and distributed energy resources, and information about state-sponsored energy efficiency programs.
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What public-purpose-funded energy efficiency programs are available in my state?
Indiana has no public-purpose-funded energy efficiency programs.
What utility energy efficiency programs are available to me?
Duke Energy offers the Energy Efficiency Incentive Program for rebates on high-efficiency lighting, motors, pumps, air-conditioning units, and heat pumps. Incentives are prescriptive, based on the efficiency and capacity of equipment. Eligibility is limited to customers with a demand less than 500 kW. Incentives are capped at $50,000 per calendar year per facility for all eligible equipment.
What load management/demand response options are available to me?
The PJM Interconnection (PJM), a regional transmission organization (RTO), offers several demand response programs, three of which may be attractive to federal facilities that fall within the PJM footprint (northeastern Indiana):
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The Economic Load Response program allows electricity users to provide load reductions in exchange for a payment based on hourly wholesale electricity prices. Participation is fully voluntary. Program participants have the choice of two options: the Real-Time or Day-Ahead Option. In the Real-Time Option, participants can decide at any time to provide load curtailments (with one hour notice to PJM), and receive payment based on the real-time electricity price (minus their retail rate for generation and transmission). In the Day-Ahead Option, participants submit load reduction bids (of at least 100 kW) into the day-ahead energy market. Participants whose bids are accepted are paid for their load reductions based upon the day-ahead, hourly electricity market prices (also with their generation and transmission rates subtracted). Reductions are figured based on a "customer baseline load" (CBL), essentially the average load levels for the same hours in four of the facility's previous non-responding days. Retail electricity customers can participate in the program through any existing PJM Member, such as their utility, a third-party electricity supplier, or a specialty "curtailment service provider" (CSP); they may also participate directly by becoming a "Special Member" of PJM. Regardless of which type of firm it is, the CSP will generally offer to split the revenues with the customer at a pre-determined percentage. Customers on real-time (hourly) electricity pricing can participate, but at much less attractive remuneration terms (since they are already exposed to market electricity rates).
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The Emergency Load Response program (energy only) provides participants with a payment representing the marginal cost of power at the nearest hub on the PJM system (the locational marginal price, or "LMP") for providing load reductions when notified by PJM of a system emergency. Compliance with any load reduction request is voluntary; no penalties are assessed if a participant decides not to respond. Retail electricity customers may participate through any PJM Member (for example, their utility, third-party electricity provider, or an independent CSP) or directly, by registering as a Special Member with PJM. While the remuneration can be very high in an event, the emergency program is rarely called (only five times over the past three summers, and each time only in certain zones). However, emergency program customers may also participate in the economic program (above), as long as reductions are not credited toward both programs simultaneously.
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PJM's Interruptible Load for Reliability (ILR) offering is an emergency "capacity" program in which participants pledge to either reduce their load by a specified amount (guaranteed load drop, GLD) or to a specific kW level (known as firm service level, FSL) within one or two hours of an event notification. Load reductions are mandatory and may occur up to ten times per year, lasting up to six hours per event. Penalties for non-compliance are substantial. Participants must register by March 2, 2009 (and should start sooner since registrations must be cleared by their third-party electricity providers and distribution utilities). Remuneration is based on the results of annual capacity auctions in various PJM regions, but ranges from about $40 to $80/kW (depending on the zone and year) through 2011-12. Most participants are also eligible to receive energy payments for actual reductions, if and when the program is called.
In all three programs, participants can provide load reductions either through curtailing electricity use or operating on-site generation consistent with local environmental regulations and permits.
Duke Energy offers the PowerShare program, in which participants are remunerated for reducing load below a customer-specific baseline during summer weekdays when market prices are high. There are two options: a voluntary and mandatory one. Payments are higher for the mandatory program, but there is a penalty for not meeting the committed load shed during notified events.
AEP offers both an emergency and price curtailable service rider for customers over 1 MW in Indiana. Under these programs, the facility can select from two emergency or three price options depending on the duration of curtailment it is willing to commit to.
Indianapolis Power & Light offers various curtailable riders (PDF 141 KB) (Riders 14-18) that permit customers to take advantage of credits both for capacity (contracted kW) and energy (actual kWh curtailed during events) in exchange for curtailing consumption or using their generators in times of grid emergencies or high wholesale power prices.
Vectren (PDF 284 KB) (Southern Indiana Gas and Electric) offers several interruptible riders to its commercial customers, as well as a direct load control program through which participants receive summer monthly payments of $5 per air conditioner or heat pump under 5 tons and $4 per kW for each unit over 5 tons.
Wabash Valley Power, a generation and transmission utility, provides incentives to its numerous northern Indiana distribution cooperatives for demand response. Most of these distribution cooperatives offer interruptible options to their large customers. Consult with your coop's representative to learn what opportunities are available.
What distributed energy resource options are available to me?
The Database of State Incentives for Renewable Energy (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following program may be of interest to federal customers.
Indiana's Alternative Power & Energy Grant Program provides funds for the purchase and installation of power generation, heating, and cooling equipment, and for other equipment necessary for the operation of the renewable energy system. Solar electric and solar water heating are eligible, as are windpower installations Projects are eligible for grants covering 50% of costs up to $25,000.
Are there energy efficiency programs sponsored by the state government?
The Indiana Economic Development Corporation offers a small number of loan and grant programs that could be devoted to energy efficiency projects. However, no programs are currently available to federal customers.
What additional opportunities are available to me?
Federal customers also have energy efficiency opportunities available with utilities (e.g., Duke Energy) that have area-wide contracts with GSA and, by extension, all other federal agencies. Federal facilities should contact their account executive to determine the level of participation by their local utility.
NOTE: Energy efficiency funds and demand response programs are updated at least annually. Please contact the FEMP webmaster if changes are needed between updates.