Indiana regulators approve cost recovery for 3 coal plant upgrades

Dive Brief:

Indiana regulators this week approved a settlement allowing Northern Indiana Public Service Co. to install pollution controls at the Bailly Generating Station, Michigan City Generating Station and R. M. Schahfer Generating Station, to comply with the federal coal combustion residuals (CCR) rule, and to charge customers for the upgrades.
According to Sierra Club, the decision amounts to a bailout of NIPSCO coal facilities and could wind up costing customers more than $400 million. The conservation group says retiring the plants would save customers money.
NIPSCO has been looking to reduce its dependence on coal. Last year, the utility filed its Integrated Resource Plan with state regulators, outlining how it intends to replace four coal-fired units that will be retired over the next seven years.

Dive Insight:

The Indiana Utility Regulatory Commission this week approved a multi-party settlement to extend the operations of three coal-fired plants, but opponents say the approval will cost customers millions. The settlement involved the utility, Indiana Office of Utility Consumer Counselor, NIPSCO Industrial Group and Citizens Action Coalition of Indiana. Sierra Club opposed the arrangement.

Sierra Club’s Wendy Bredhold said in a statement that NIPSCO's customer base "deserves better, and its residents already have the second-highest utility bills in the state, even before this increase. NIPSCO needs to begin to evaluate lower-cost options for customers’ energy needs, and start building toward a sustainable long-term, low-cost, cleaner future."

The environmental group said it was reviewing the commission's decision and is considering an appeal to the Indiana Court of Appeals.

The utility had asked for the commission to approve several capital projects at three plants, to comply with the federal CCR rule. The settlement allows NIPSCO to recover 80% of the federally mandated project costs and ongoing expenses through a rider, and defer 20% to its next general rate case.

According to last year's IRP, for the next two years NIPSCO plans to rely on existing capacity and spot purchases. After that, the utility said it believes combined cycle gas units are the best solution, but didn't mention renewable energy. The utility's generation mix is more than 70% coal.