Indiana GOP advances coal rescue bill that would pause utility plant builds
An Indiana House committee on Wednesday advanced a bill that would pause utility procurement of new generation resources in a bid to save aging, expensive coal power plants slated to retire in the state.
Amendment 7 to Indiana Senate Bill 472 would halt all utility purchase or construction of generation assets 250 MW or larger until 2021. It passed the Republican-controlled House utilities committee on an 8-4 party line vote.
The bill comes after announcements from two Indiana utilities that they will close coal power plants and replace them with renewables and natural gas. The bill must still be passed by the full House and Senate in the state.
Indiana's coal rescue bill is the latest in a string of state proposals to save the ailing generation resource — but this one is novel in its approach.
Instead of supporting coal plants directly, the bill would limit utilities' ability to transition away from the resource, which is increasingly uncompetitive against low-priced natural gas facilities and ever-cheaper wind and solar.
The amendment to SB 472 would direct the Indiana Utility Regulatory Commission (IURC) to not issue any final orders in proceedings that request the construction of new generation resources or the approval of a power purchase agreement until Jan. 1, 2021.
The moratorium would initially apply only to power plants 250 MW or larger. But if the IURC approves more than 10 GW of generation capacity in "all matters or proceedings" before 2021, the size limitation would be lifted and the pause would apply to all generation.
The IURC could also approve new large generation in an emergency, but the bill does not detail what those conditions entail.
The bill's purported aim is to ensure the state's electricity supply remains reliable as the state's power mix transitions. By July 2020, the IURC would be directed to produce a report on "transitions in the fuel sources and other resources used to generate electricity by electric utilities," and "new and emerging technologies for the generation of electricity, including the potential impact of such technologies on local grids or distribution infrastructure."
Committee passage of the bill comes as Indiana utilities announce plans to move away from coal. Last year, Vectren Corp. unveiled a $900 million plan to retire four coal plants by 2023 and build a new gas plant. Months later, the Northern Indiana Public Service Co. announced an integrated resource plan that it said would save customers more than $4 billion over 30 years by eliminating coal from its resource mix.
NIPSCO began executing that strategy last month, finalizing agreements with developers for 800 MW of wind energy. Those projects and an upcoming request for proposals for clean energy from the utility could be put in jeopardy if the bill passes and is signed into law.
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