Oct. 13--Indiana's largest utility has launched a campaign against climate change legislation that passed the U.S. House, telling customers if it becomes law electric rates could soar up to 130 percent over the next 25 years.

Bill inserts going out to NIPSCO customers are warning they could face "additional costs of more than $100 million in 2012" if the Waxman-Markey American Clean Energy & Security Act becomes law. A form letter on the company's Web site that is available for mailing to elected representatives cites "dire outcomes."

NIPSCO's stance is in marked contrast to some other utilities, including Duke Energy, which maintains the House bill provides a "glide path" to limiting carbon dioxide emissions while keeping costs to customers under control.

Exelon Corp., owner of ComEd in Illinois, two weeks ago withdrew from the U.S. Chamber of Commerce over the chamber's aggressive stand against Waxman-Markey. On the same day, Exelon CEO John Rowe called for implementing a U.S. carbon cap and trade system, telling attendees at an energy efficiency conference: "The carbon-based free lunch is over."

NIPSCO spokesman Nick Meyer said of the bill inserts, "The single most important message for us is, we are not opposed to addressing climate change. But we want to make sure there are no significant cost increases for our customers associated with this legislation."

Estimates of how much electric prices would increase under Waxman-Markey vary widely. A U.S. Energy Information Agency report prepared for Congress said electricity prices nationwide will be only 3 percent to 4 percent higher by 2020 if the bill is made law, although by 2030 they could be 19 percent higher.

Waxman-Markey would set up a carbon cap and trade system under which utilities would buy "allowances" to release carbon dioxide above certain limits. They would buy them from utilities or other industries operating under their limits. Carbon dioxide emissions have been identified by scientists as a key contributor to global warming.

In a letter appearing in the downstate Jeffersonville News and Tribune after the bill was passed, Duke Energy Indiana President Jim Stanley argued allowances allocated to industries hard hit by carbon caps will protect consumers in coal-dependent states such as Indiana.

"This is a proven, efficient approach that allows companies to reduce their emissions with the least amount of impact on customer bills," Stanley wrote.

Duke Energy has 780,000 electric customers in Indiana and 4 million nationwide.

NIPSCO has 712,000 natural gas and 457,000 electric customers spread across northern Indiana.

NIPSCO in its bill insert tells customers it supports environmental legislation that is fair and equitable but it opposes Waxman-Markey, claiming it would have a "disproportionate negative economic impact" on Indiana.

The Hoosier Environmental Council has been fighting to set the record straight when it comes to the cost of a carbon cap and trade system, said Executive Director Jesse Kharbanda. He said estimates like NIPSCO's are often derived from "wildly inaccurate assumptions" about the price of allowances.

Meyer said NIPSCO derives its calculations of the bill's cost from its own research and analysis.

Kharbanda in turn cites a study from the Washington, D.C.,-based group Resources for the Future, which shows Indiana industry would rank No. 2 nationally for per capita carbon allowances government would grant to industries hardest hit by carbon caps, thus driving down costs for utility customers.

Kharbanda said utilities definitely have the right to discuss the effect climate change legislation would have on costs and prices.

"But if it gets into the realm of lobbying, it certainly could be troubling," he said.

To see the NIPSCO form letter opposing federal climate change legislation go to: nipsco.com, click Climate Change and then click on Sample Letter to Elected Officials.

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