The electric utility serving southern Indiana's coal country yesterday announced a plan to transition swiftly from coal to renewable energy as part of a strategy it said would save consumers more than $300 million and slash carbon emissions.
The plan, announced by Vectren Corp., would reduce the utility's reliance on coal from 78% this year to just 12% by middecade.
Vectren, a unit of Houston-based CenterPoint Energy Inc., is the second Indiana utility to announce a massive shift away from coal in the past two years and comes in spite of intense lobbying by Indiana's coal industry to slow the retirement of aging plants.
In late 2018, Northern Indiana Public Service Co. announced a plan to shut its coal fleet within a decade — most of it by 2023 — and replace much of the capacity with renewables.
Vectren's announcement is similar. Under a "preferred portfolio" that's the core of a 20-year integrated resource plan (IRP), the utility would shutter most of its coal-fired generation by 2023 and add more than 1,000 megawatts of wind energy and solar, some of which would be paired with battery storage.
The full IRP will be filed with Indiana regulators by the end of the month.
The utility said shutting three coal units will save an estimated $700 million that would be required to meet environmental regulations. Replacing the units with wind and solar energy, meanwhile, will reduce the utility's carbon emissions by 75%.
"When you have a utility in the heart of [the state's coal-producing region] that says we're only going to be 12% coal in 2025, that's huge," said Kerwin Olson, executive director of the Citizen Action Coalition. "It's especially huge understanding what's been happening politically, on the ground, in Indiana."
The Indiana Coal Council has pushed back against utilities at the Indiana Statehouse and the Indiana Utility Regulatory Commission to replace coal plants with cleaner energy (Energywire, Aug. 2, 2019).
Coal producer 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. Pruitt renewed his registration for 2020 but hasn't been a visible presence at the Statehouse.
The GOP-controlled General Assembly passed H.B. 1414 this spring, which requires utilities to get approval of state regulators before they close a power plant (Energywire, March 11).
The temporary measure was meant to serve as a "pause" on plant closures while a legislative task force continues its study of the state's power grid. But critics, including a prominent Republican state senator, characterized the bill as an unnecessary bailout of the coal industry.
The Vectren plan represents not just a dramatic shift from the status quo but also a big departure from a previous proposal by the utility to replace much of its coal capacity with a new $900 million natural gas plant.
The gas plant proposal was rejected by state regulators, who sent Vectren back to the drawing board.
Lynnae Wilson, chief business officer for Vectren's Indiana electric utility, said in a statement yesterday that the new plan "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."
The plan does call for adding 460 MW of combustion gas turbines in 2024 and continuing to operate the 270-MW Culley 3 coal unit.
Olson said his group may still challenge those aspects of the plan. Still, he said the plan offered by Vectren makes a statement about the direction Indiana's energy market is headed.
"Despite an enormous effort by the coal industry, the market has spoken," he said. "Utilities are saying these old dinosaurs are done. We've known that for a number of years. This is just further evidence.
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