Indiana Utility Will Close Coal-Fired Units Early

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Indianapolis Power & Light (IPL) on Dec. 9 announced it will close two of the four coal-fired units at its Petersburg Generating Station in southern Indiana, as the utility continues to move away from coal generation.

IPL has been pressured by state political leaders and environmentalists to close the 1,700-MW Petersburg facility, the largest power plant in the utility's fleet. The plant's four units have been cited for more than a dozen violations of environmental regulations in the past five years.

The utility on Monday, during a public advisory meeting to release details of its latest integrated resource plan (IRP), said it will retire Petersburg Unit 1 by 2021 and Unit 2 by 2023, eliminating 630 MW of generation. IPL said Units 3 and 4 have an installed capacity of 547 MW and 531 MW, respectively, and the utility plans to operate them through 2042. IPL said Units 1 and 2 were originally scheduled to operate until at least 2032 and 2034, respectively.

"The integrated resource planning process is an opportunity for IPL leaders to listen, learn, inform and engage with our customers and key stakeholders regarding future energy demand," said Vince Parisi, IPL president and CEO in written comments. "We used key drivers such as economics, flexibility, optionality and grid reliability to model scenarios supporting our decision to invest in a more balanced energy mix, which minimizes risk to our customers and takes into account a rapidly-changing energy landscape."

IPL in a summary of the IRP said, "While several systematic changes in wholesale power markets are impacting the viability of coal in [the Midcontinent Independent System Operator"], Petersburg Units 3 and 4 provide firm, dispatchable capacity. Maintaining those units preserves optionality in the face of great uncertainty over the next five years." IPL said it plans to "monitor" if market conditions impacting Petersburg 3 and 4 support their continued operation, and said it may reevaluate operation of the units in its 2022 IRP.

IPL, based in Indianapolis and serving customers in central and southern Indiana, said Monday it plans to file its IRP with the Indiana Utility Regulatory Commission on Dec. 16. The utility in 2016 ended the use of coal at its Harding Street Station in Indianapolis, converting the 1,200-MW plant to burn natural gas. It also built a 670-MW combined cycle gas turbine plant at its Eagle Valley Generating Station in Martinsville, where it operated four coal-fired units until closing that facility in 2016.

Environmental Group Praises Closures

IPL is required to file an IRP every three years. The document details the utility's strategy for power generation across the next 20 years.

The Sierra Club, among the environmental groups that have referred to the Petersburg plant as a "super polluter," in a statement said it was pleased with the decision to close two coal units at the plant, and said it would continue to push for IPL to stop using coal altogether.

"It's good that IPL is moving to get rid of two units at this outdated, massive Super Polluter, but we can't tiptoe our way out of the climate crisis," Wendy Bredhold, senior campaign representative for the Sierra Club's Beyond Coal campaign in Indiana, said in a statement. "Southwest Indiana's families and children living with health impacts from the Petersburg plant need bold plans to move rapidly away from dangerous fossil fuels that are poisoning our air and water and threatening our health."

Bredhold continued, "Sierra Club and our allies will continue to push for the clean energy that Indianapolis residents demand and deserve, which must include a plan to fully retire Petersburg by 2028 and clean up its widespread toxic pollution. Anything less is a failure for our climate and our communities."

Political Pressure

Public officials have pushed for IPL to reduce its coal-fired generation. The Indianapolis City-County Council in 2017 passed a resolution that called for a reduction in carbon emissions, increased energy efficiency, and renewable energy use. City officials later created a plan for the city to be powered 100% by renewable energy by 2050.

"The city of Indianapolis can't reach our goals without Indianapolis Power & Light," said a letter signed last month by 15 members or members-elect of the 25-member City-County Council. "A good and necessary first step for IPL to take in order to support the city's goals is to go coal-free by 2028 and announce the retirement of the Petersburg Super Polluter within that timeframe during their current planning process. Furthermore, IPL should replace that coal power with renewable energy, energy efficiency and storage-not more fossil fuels."

Indianapolis Mayor Joe Hogsett in a Dec. 6 letter to IPL asked the utility to deploy more renewable energy resources. "The city requests that IPL accelerate its overall renewable energy deployment goals to be better aligned with those of the city," he wrote.

IPL is owned by Virginia-based AES Corp., an electricity supplier operating in 15 countries that is focusing on renewable energy, including energy storage. The IPL IRP details the utility's power mix, and expects storage to be about 8% of its electricity generation by 2039. IPL's current mix is 45% natural gas, 43% coal, 8% wind, and 4% solar.

Several Coal-Fired Units Closing in State

Indiana at one time generated nearly all of its electricity from coal, but utilities serving the state have announced the closure of several coal-fired units in recent years. Duke Energy Indiana, the state's largest utility, in July said it wants to retire all nine of its coal-fired units by 2038, replacing them with two natural gas-fired plants. The utility said almost 90% of the power it produced in the state in 2018 came from coal. Duke Energy Indiana also said it plans to develop 700 MW of wind power and 1,650 MW of solar energy.

Ohio-based American Electric Power (AEP) earlier this year said it would close one unit of its two-unit, 2,600-MW coal-fired Rockport Plant in Indiana. Merrillville-based Northern Indiana Public Service Co. (NIPSCO) said it plans to retire four of its five remaining coal-fired units in the next five years, and phase out coal generation completely by 2030. NIPSCO plans a portfolio with 65% of the power coming from renewables, including solar and wind, by 2028. It has said it wants to produce at least a quarter of its power from gas-fired units by that date.

Vectren Corp., owned by Houston-based CenterPoint Energy Co., earlier said it plans to retire three of its four coal-burning generating units in southern Indiana by 2024, replacing that generation with natural gas-fired generation and solar power. State regulators earlier this year rejected Vectren's program to build a large, gas-fired power plant near Evansville, saying it did not want to obligate customers to natural gas for 30 years "in a time of rapid change."

-Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).

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