Vectren Will Close Coal Units, Add Renewables

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Vectren Corp., the electric utility that serves much of southern Indiana, has announced a plan to shutter its remaining coal-fired power plants and transition to renewable energy. The utility also said it would add gas-fired generation to back up those renewable resources.

Vectren's June 15 announcement comes about two years after Northern Indiana Public Service Co. (NIPSCO), which serves much of the northern part of the state, announced a similar plan.

The proposed changes also come after Indiana lawmakers passed legislation, signed by Republican Gov. Eric Holcomb in March, that would temporarily delay coal plant closures. The new law requires utilities to give six months' notice of planned retirements, and to note planned coal plant closures in their Integrated Resource Plans (IRPs). It has a sunset date of May 2021, but environmentalists are concerned that date could be changed in the next legislative session, and that the law is part of a broader legislative agenda to prevent utilities from closing coal plants in the state.

1. Vectren's A.B. Brown Generating Station includes two, 245-MW coal-fired units, along with two 88-MW natural gas-fired units. Courtesy: Wikipedia

Vectren detailed its strategy, which includes the closure of three coal-fired units, including two at its A.B. Brown Generating Station (Figure 1) near Evansville, in its latest IRP released Monday. The utility said its IRP ensures reliability and mitigates risk, while saving electric customers an estimated $320 million over the 20-year planning period. Nearly two-thirds of the energy included in the new plan will be generated from renewable resources, reducing reliance on carbon fuels and lowering carbon emissions by nearly 75% from 2005 levels."

Environmental groups applauded Vectren's commitment to reduce its reliance on coal-fired generation, though they say the utility still needs to do more.

Jean Webb, chair of the Sierra Club Hoosier Chapter Energy Committee, said, in a statement shared with POWER said, It's a step in the right direction because it gets us up and moving with more renewables; however, throwing more money at the uneconomic Culley 3, which won't run much because it's so expensive, is a waste."

Wendy Bredhold, senior campaign representative for the Sierra Club's Beyond Coal Campaign in Indiana, and also an Evansville resident, said in a statement share with POWER: Community members and city leaders have called on Vectren to announce a plan that would provide us with a clean energy future. With a confluence of health, economic and climate crises impacting Southwest Indiana communities, this plan simply does not meet the demands of the day."

Broad Range of Potential Conditions'

Lynnae Wilson, the chief business officer of Indiana Electric Utility Business for Houston, Texas-based CenterPoint Energy, the parent of Vectren, said, The IRP considers a broad range of potential conditions and variables to determine a preferred fuel mix which allows Vectren to meet future electric energy demand in a safe and reliable manner. Over the next several months, we will finalize our generation plan, taking into consideration cost, COVID-19 impacts, efficiency and reliability while recognizing the need for flexibility given ever-advancing technology in a rapidly evolving industry."

Vectren said that under its preferred portfolio," the backbone of its 20-year IRP, the utility will retire most of its coal-fired generation by 2023. It will add more than 1,000 megawatts of solar and wind power, pairing some of that generation with energy storage. The full IRP will be filed with Indiana regulators by the end of June.

2. The F.B. Culley power plant near the Ohio River in Indiana will continue to burn coal at its 270-MW Unit 3, according to Vectren. Courtesy: Wikipedia

Closing the coal plants will reduce Vectren's reliance on coal generation to just 12% of its portfolio, down for the current 78%.

Vectren in the IRP said it plans to:

• Retire or exit agreements involving 730 MW of coal generation, thereby avoiding investments estimated at $700 million to comply with strict environmental regulations.
• Add 700 MW to 1,000 MW of solar power, some paired with battery storage, and add 300 MW of wind power. The addition of renewable power would allow all Vectren electric customers access to solar and wind-powered energy at significantly lower costs ... and reduce carbon emissions by nearly 75%," the utility said.
• Add 460 MW of natural gas combustion turbines, about half the natural gas capacity of the combined cycle gas turbine proposed in the previous IRP and designed to back up the renewable resources that supply the majority of customers' energy needs."

Coal Group Lobbies Lawmakers

The Indiana Coal Council, a trade association for the coal industry in the state, has lobbied state lawmakers to reject utilities' plans to shutter coal plants, and also has argued before the Indiana Utility Regulatory Commission about power producers' proposals to replace coal-fired generation with renewable energy.

Sunrise Coal LLC, a unit of Hallador Energy Co. that supplies coal to Vectren, hired former EPA Administrator Scott Pruitt as a lobbyist in the final weeks of the 2019 legislative session. The state's Republican-controlled General Assembly passed House Bill 1414 in March, the measure that requires utilities to get approval of state regulators before they close a power plant. Critics decried the measure, saying it is a bailout for the state's coal industry.

Three Coal Units Will Close

Vectren's plan includes retiring three coal-fired units, including a pair of 245-MW units at its A.B. Brown Generating Station near Evansville. The utility also will retire the 90-MW Unit 2 at its F.B. Culley plant in Warrick County, and will exit a joint operating agreement with an Alcoa Corp. subsidiary at Unit 4 of the Warrick coal and gas plant. Vectren owns 150 MW of the 300-MW coal unit, according to its IRP.

Vectren will continue to operate the 270-MW coal-fired Unit 3 at Culley (Figure 2), and add 460 MW of gas-fired power by 2024. Vectren in its previous IRP in 2016 had said it wanted to replace most of its coal-fired power with a new $900 million gas-fired plant, but that plan was rejected by state regulators.

NIPSCO in November 2018 announced a plan to retire its coal fleet within a decade, replacing much of that generation with renewable resources. The utility said it would retire four coal-fired units at its Wheatfield plant by 2023, a coal-fired unit in Michigan City by 2028, and increase its generation from renewables as part of its Your Energy, Your Future" initiative.

The company's IRP, filed on October 31, 2018, said NIPSCO wants to generate 65% of its power from solar, wind, and other renewables by 2028. The utility said it expects at least 25% of its generation by 2028 will be from natural gas. The coal units slated for closure are the utility's last in the state.

NIPSCO in February 2019 announced it would build three new wind farms. The utility in April announced completion of its first three solar projects, built by South Bend, Indiana-based Inovateus Solar. Those projects include a 120-kW ground-mount solar array at the company's Merrillville, Indiana, headquarters.

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

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