Energy Incentive Programs, Indiana

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Updated July 2015

Indiana’s 2007 law establishing an energy efficiency resource standard (EERS) was overturned by the state legislature in 2014. However, many utilities continue to offer energy efficiency programs. Indiana utilities budgeted over $200 million in 2014 across their various programs to promote customer energy efficiency.  

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’s Smart Saver Incentive program provides rebates for high efficiency lighting, VFDs, pumps, HVAC equipment (including chillers), IT, industrial processes, and kitchen equipment. The Smart Saver Custom Incentive program is available for measures outside of the prescriptive program’s scope. Both types of incentives are capped at 50% of the project’s incremental cost. On-line, off-site, and on-site energy assessments are also available for large businesses. 

NIPSCO offers prescriptive incentives for both natural gas and electric customers, including boilers, lighting, motors, VFDs, food service equipment, and more. Custom incentives are also available with pre-approval. Payments for custom projects are either $0.08/kWh for first-year savings (electric projects) or $0.80/therm (gas projects). A small business direct-install program is also available. 

Indiana Michigan Power (AEP)’s Prescriptive Rebates program offers incentives for efficient lighting, sensors, pumps and motor controls, and commercial kitchen equipment. The Custom Commercial & Industrial Incentive program provides incentives for other projects with pre-approval. Annual incentives are capped at $150,000 per site and $300,000 per company across all programs. A small business direct-install program is also available. 

Indianapolis Power & Light’s Business Energy Incentives program offers prescriptive incentives covering efficient lighting, HVAC measures, VFDs, and kitchen equipment. An incentive for custom projects is also available at a rate of $0.07/kWh for first year savings. Custom projects require pre-approval and payments are capped at $100,000. Total combined custom and prescriptive customs are capped at $500,000 per customer per year.

Wabash Valley Power, a generation and transmission utility, offers the POWER MOVES program to customers of its numerous northern Indiana distribution cooperatives. Prescriptive incentives are available for efficient measures including lighting, HVAC, and VFDs. Custom projects can also receive an incentive of $0.05/kWh for first-year savings (lighting or controls projects) or $0.08/kWh for first-year savings (non-lighting custom projects). Payments cannot exceed 50% of the project cost and are capped at $50,000. Incentives are also available for new construction.

Vectren provides energy efficiency incentives for both natural gas and electric service customers. Natural gas prescriptive rebates cover furnaces, boilers, and more. Electric rebates include efficient lighting, HVAC measures, and commercial kitchen. Incentives for both natural gas and electric custom electric projects are available for qualifying projects that have simple paybacks greater than one year. The cap for custom incentives is 50% of project costs or $50,000. Programs are also available for new construction and small businesses.

Citizens Gas offers a set of prescriptive rebates for customers acquiring high-efficiency gas equipment such as boilers, furnaces, and water heaters as well as for steam trap servicing and boiler tune-ups. Custom projects may qualify for an incentive of $0.75/therm (first-year savings less than 7,500 therms) or $1.00/therm (first-year savings above 7,500 therms). Payments can cover up to 30% of project costs or 50% of incremental costs with a maximum of $35,000.  

What load management/demand response options are available to me?

The PJM Interconnection (PJM), a regional transmission organization (RTO), offers several demand response programs. Two specific programs may be attractive to federal facilities in PJM’s northeastern Indiana footprint:

  • 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. Customers start by submitting load reduction bids through their curtailment service provider (any existing PJM member, such as their utility, a third-party electricity supplier, or a specialty CSP) 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 (the day-ahead “locational marginal price,” or LMP). Reductions are figured based on a customer baseline load (CBL), which is essentially the average of load levels for the same hours in four of the facility's previous non-responding days. 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. 

  • PJM’s emergency “capacity” program allows demand resources to participate in PJM’s Reliability Pricing Model (RPM) forward capacity market via a CSP. 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. Remuneration is based on the results of the annual RPM capacity auctions in various PJM regions.. Remuneration levels for the 2016-17 PJM year (which begins June 1, 2016) are in the $22,000 per MW range for Indiana customers. Participants are also eligible to receive energy payments for actual reductions, if and when the program is called. 

In both 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’s PowerShare program remunerates participants 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. 

Indiana Michigan Power (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 (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. IP&L also offers CoolCents, a direct load control program that remunerates customers up to $60 each summer per air conditioning unit for the right to cycle the unit’s compressors.

Vectren (Southern Indiana Gas and Electric) offers several interruptible riders to its commercial customers. In addition, the Summer Cycler program offers participants summer monthly payments of $5 per air conditioner enrolled and $2 for each water heater, up to $28 per summer.

Wabash Valley Power, a generation and transmission utility, provides incentives to its numerous northern Indiana distribution cooperatives for demand response through its Power Shift initiative. Most of these distribution cooperatives offer interruptible options to their large customers. Consult with your cooperative’s representative to learn what opportunities are available.

Utilities in the footprint of MISO (e.g., Vectren) may enroll interested customers in any of MISO’s various demand response offerings, from which they can receive payments for reducing load. Federal customers should contact their local utility representative to inquire about participation.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewables and Efficiency (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following programs may be of interest to federal customers.

  • NIPSCO also offers a feed-in tariff  with generous remuneration rates for 15 years for ratepayers’ power from small (<1 MW) solar, wind (both less than 200 kW), and biomass (< 1 MW) systems.
  • The State of Indiana offers a property tax exemption for installations producing renewable energy, including ground-source heat pumps.  Government and other tax-exempt agencies may be eligible to take advantage of the program by assigning the credit to a third-party organization that finances, installs or manufactures the system; in exchange, the third party passes a percentage of the tax credit to the agency as a buydown or payment on the project.

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 whose utilities have area-wide supply contracts through GSA (e.g., Duke Energy and Vectren) may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available in GSA’s Energy Division Library. Federal facilities should contact their account executive to determine the level of each utility's participation.

PJM (see above in the demand response section) now allows energy efficiency projects to participate in its forward capacity markets, based on its Reliability Pricing Model (RPM). To be eligible, EE projects must reduce load continuously by at least 100 kW during peak summer hours. This load reduction can be bid into PJM’s annual (for three years in advance) and "residual" (nearer-term) capacity auctions, and if selected will receive the auction clearing price. Interested customers can participate through energy service companies conducting ESPCs or utilities executing UESCs at their sites.