Indiana Regulators Reject Utility’s Proposal for Massive Gas Plant
The billion-dollar facility would have cost utility customers more for an unnecessary plant
INDIANAPOLIS—Today, regulators at the Indiana Utility Regulatory Commission rejected a proposal for a new gas-fired power plant by Vectren, a CenterPoint Energy Company which is a Houston-based utility company. Vectren first proposed the plant in early 2018 to replace the bulk of its aging, inefficient coal-burning units. The plant was proposed to be built on the site of Vectren’s existing AB Brown coal-fired power plant located in Posey County near Evansville, Indiana. The project had an estimated cost of nearly 1 billion dollars and was expected to raise the energy costs of southern Indiana residents upon completion.
Citizens Action Coalition of Indiana (CAC) and Earthjustice represented a coalition of Indiana energy customers, including CAC, Sierra Club, and Valley Watch, who challenged the proposal at the Commission. Representatives of coal industry groups along with the Indiana Office of Utility Consumer Counselor (OUCC), the state agency representing ratepayer interests, also opposed the proposed gas plant as not in the best interests of Indiana consumers.
Attorneys for the groups contended that Vectren’s Integrated Resource Plan was based on shoddy modeling that rushed energy customers into a large capital investment with little to no consideration of less risky, lower-cost alternatives to the 850 megawatt plant. The groups argued that the proposed gas plant was over-built and far exceeded the demand of Vectren’s customers. Consumer parties also noted that the plant would lock consumers into a fossil fuel energy infrastructure for the next 40 years, over the life of the plant, and not allow flexibility to employ conservation and clean energy alternatives.
The coal industry keeps pushing the lie that utilities need on-site fuel to keep the lights on, but in reality, Vectren—like every other utility across the country—can reliably serve its customers without keeping dirty, expensive, and inefficient coal units running, and without maintaining a reliance on fossil fuels and building massive gas plants to replace their dinosaur coal fleets.
“We are pleased with the Commission’s decision to protect Indiana energy customers.” said Earthjustice attorney Thom Cmar. “Southwestern Indiana customers already have the highest rates in the state. This proposed plant would only generate dirty energy that they do not need, and put them on the hook for the cost.”
“Kudos to Chairman Huston and the Commission. It takes a lot of courage to say no to the utilities,” stated Kerwin Olson, Executive Director of CAC. “The Commission did the right thing and protected the captive ratepayers of Vectren from this absurd and risky proposal from Vectren.”
“As a representative of Sierra Club and as a Vectren customer raising my daughter in Southwest Indiana, I am grateful to the IURC for this decision,” said Wendy Bredhold, senior campaign representative with Sierra Club’s Beyond Coal Campaign. “Their proposed gas plant was too big, expensive and risky, and would have committed our community to burning fossil fuels for decades to come. Vectren made the right decision to retire its coal plants, and now has an opportunity within their 20-year planning process this year to do the right thing and replace coal with clean and affordable wind, solar, energy efficiency and battery storage.”
A link and/or a copy of the 38 page IURC Order in Cause No. 45052 referenced above can be found here:
Here is the news release issued by the Commission:
FOR IMMEDIATE RELEASE
April 24, 2019
IURC Issues Order in Vectren South's Proposed Generation Plant Case
Order Includes Decision on Proposed Generation Plant, Federal Environmental Compliance Projects to the F.B. Culley Unit 3 Generating Station
INDIANAPOLIS – The Indiana Utility Regulatory Commission (Commission) issued an order today in Cause Number 45052 unanimously denying a certificate of public convenience and necessity (CPCN) by Southern Indiana Gas and Electric Company (Vectren South) to build an approximately 850 MW combined cycle gas turbine (CCGT).
The Commission found that Vectren South’s evidence does not convince it that the utility’s proposal would allow it flexibility and optionality. The Order states, “The proposed large scale single resource investment for a utility of Vectren South’s size does not present an outcome which reasonably minimizes the potential risk that customers could sometime in the future be saddled with an uneconomic investment or serve to foster utility and customer flexibility in an environment of rapid technological innovation.”
The Commission recognized that the requested preapproval would obligate regulated customers for a 30-year period in a time of rapid change. Prospective reliance on future market conditions brings risk. The Commission stated in its Order, “A metric biased in favor of portfolios with surplus generation is speculation we decline to embrace.”
Further, the Commission’s Order states, “We are hard pressed to see how reliance on one facility for so much of the Vectren South system requirements is consistent with maintaining flexibility to respond to changing market conditions and technological change.”
Looking forward, Vectren South is scheduled to submit a new integrated resource plan (IRP) in 2019, and the Commission instructs Vectren South in that submission to present a more thorough analysis that fully evaluates all possible options for continuing to provide reliable, efficient, and economical electric service.
The Order states, “Vectren South should use its scheduled 2019 IRP process to address problems in its modeling, incorporate more options for partnering with other entities and competitive inquiries into smaller-scale options that can be acted upon swiftly to meet the end-of-2023 date upon which additional capacity may be needed.”
In today’s Order, the Commission also approved a request by Vectren South for federally mandated environmental compliance projects and related relief for the coal-fired F.B. Culley Unit 3 generating station. The Commission found that Vectren South considered alternative plans for compliance with the Effluent Limitations Guidelines (ELGs) and the Coal Combustion Residuals (CCR Rule), and said that the evidence shows that the Culley 3 Compliance Projects would extend the useful life of the unit and are reasonable and necessary.
To review the Commission’s Order in Cause Number 45052, as well as all related documents in this case, please visit the Online Services Portal here and search by the Cause Number.