Energy production types in U.S. by region are shown for years 2015-16. Graph shows coal is leading type of fuel generation in the Central (Midwest) region.
NIPSCO says it is losing its bet on coal
Contributed By:The 411 News
Fossil fuel becomes too costly a source for electricity generation
As work was being completed at NIPSCO’s R.M. Schahfer Generating Station in Wheatfield in 2011, Robert Skaggs Jr., then the CEO of NIPSCO parent NiSource Inc. said in a NWI Times article, “This is the centerpiece of our generation fleet, so you can see we are serious about maintaining it for the long term."
But the utility announced this week it is considering shutting down by half the power generated at the plant. Schahfer has 4 coal-fired units and it is the largest of NIPSCO’s three plants that use coal to produce electricity. NIPSCO outlined its electric generation strategy at a public meeting with consumer representatives, environmental organizations, customers and other stakeholders taking part in Indiana’s Integrated Resource Planning process.
The reduction at Schahfer is one part of its own long-term IRP, said Vi Sistovaris, NIPSCO Executive Vice President. “Early analysis in our IRP indicates that the most viable option for customers and the company would have us retiring the coal-fired units at our Bailly Generating Station along Lake Michigan as soon as mid-2018 and half of the coal-fired units at our R.M. Schahfer Generating Station by the end of 2023.”
Sistovaris described several factors driving these decisions. The coal-fired units are aging and to continue running all of them in compliance with new environmental regulations would cost nearly $1 billion. “We currently believe that retiring a portion of our units will lead to long-term benefits to our customers and the environment.”
Another factor is the pressure of low market prices for natural gas. NIPSCO has only 1 gas-fired electricity generating plant. The utility is following the path of other Indiana energy producers that have closed coal-fired plants and some are being replaced by cheaper to run, gas-fired plants.
In April, Indianapolis Power & Light retired four units at its Eagle Valley Generating Station, highlighting the need for a cleaner and more diverse generation mix. The facility will be replaced by a new combined-cycle gas facility. Duke Energy Indiana also closed its Wabash River Generating Station in Terre Haute.
If NIPSCO decides to proceed with retirement of the Bailly Generating Station, the company would have to seek approval from the Mid-continent Independent System Operator (MISO), a regional organization that governs energy transmissions across parts of 15 U.S. states and the Canadian province of Manitoba. MISO will evaluate NIPSCO’s proposed plan with other capacity changes across the MISO footprint.
NIPSCO has two hydroelectric facilities and purchases wind power. The company will submit its final IRP to the Indiana Utility Regulatory Commission by November 1, 2016.
Story Posted:08/27/2016
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