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January 26, 2012

Clean air rules might add 14 percent to Indiana rates

WEST LAFAYETTE — An analysis prepared for the Indiana Utility Regulatory Commission predicts new federal clean air regulations will raise electricity rates in this state by about 14 percent by 2020 because of necessary upgrades to coal-fired power plants.

The analysis is from the State Utility Forecasting Group, a state-funded panel of researchers based at Purdue University.

Director Douglas Gotham says Indiana is expected to experience larger price increases than projected on a regional or national level. About 85 percent of the electricity used in Indiana is generated by coal-fired power plants, compared with about 45 percent nationwide.

Gotham predicts Indiana rates could rise by 34 percent overall by 2020 when other factors are included such as costs associated with ongoing new plant construction.

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