(Undated) – Hoosiers’ energy costs are predicted to rise 20 percent over the next six years according to a panel at Purdue University.
The State Utility Forecasting Group at the Energy Center at Discovery Park at Purdue University released its Indiana Electricity Projections report this month. The group’s forecast says rates will rise 20 percent, accounting for inflation, by 2017.
“The price increase is caused by three factors; costs associated with ongoing new plant construction, costs associated with extending the life of existing generating facilities, and costs associated with meeting environmental rules,” the report stated.
The environmental rules include strict U.S. Environmental Protection Agency limits on how much carbon dioxide coal-fired power plants can emit. More than 90 percent of the state’s electricity is generated by coal plants.
Plants such as American Electric Power’s Tanners Creek station in Lawrenceburg are being forced to shut down generating units to meet the EPA regulations by the January 1, 2015 deadline. Tanners Creek will generate half of its current 1,000 megawatts of power after stopping three of its four generators.
The State Utility Forecasting Group says it plans to release a second report later this year further detailing the impact of environment regulations on energy costs.
Despite the increasing costs, electricity usage will still increase during the same time span by 1.3 percent.
The full SUFG report can be viewed online at http://www.purdue.edu/discoverypark/energy/assets/pdfs/SUFG/publications/2011%20SUFG%20Forecast.pdf.