INDIANAPOLIS, Ind. (WEHT) – The Indiana Utility Regulatory Commission (IURC) approved CenterPoint’s proposition to build two new gas combustion turbines.
IURC says it issued an Order today in Cause No. 45564 unanimously approving a certificate of public convenience and necessity (CPCN) requested by CenterPoint Energy Indiana South (CEI South) to build two natural gas combustion turbines (CTs) totaling approximately 460 megawatts (MW).
Those who think this is a good thing
CenterPoint says this is good because it intends to construct two natural gas combustion turbines to replace portions of its existing coal-fired generation fleet. The company’s generation transition plan will significantly evolve the way the company generates power for its 150,000 customers across southwestern Indiana by combining a cleaner portfolio of renewables and complementary natural gas.
CenterPoint says the estimated $334 million natural gas facility will provide an output of 460 megawatts, sized appropriately to reliably support the anticipated electric generation needed upon the retirement of A.B. Brown units 1 and 2 in late 2023. CenterPoint says The CTs will be constructed at the current site of the power plant in Posey County, and will assist CenterPoint Energy in delivering on its commitment to provide a cost-effective, well-balanced energy mix.
CenterPoint says the company’s 2020 Integrated Resource Plan (IRP) illustrated a preferred portfolio including nearly two-thirds of energy generated from renewable resources as well as natural gas generation, which is projected to ultimately save electric customers an estimated $320 million over the 20-year planning period. Through the IRP process, CenterPoint Energy performed significant analysis and considered public input to arrive at the most reliable and cost-effective solution for customers.
“Although the majority of the proposed generation outlined in our plan comes from renewable resources, there remains a need for reliable, resilient and fast-ramping generation to operate around-the-clock when the sun and wind are insufficient to power the renewable resources,” said Steve Greenley, Senior Vice President, Generation Development. “While the combustion turbines may not run constantly, it is very likely they will operate several hours each day in order to supplement our renewable generation with a lower carbon solution, when renewable facilities are not at peak generating levels.”
“Today’s approval will have no immediate impact on customer electric bills,” added Greenley. “The recovery of the investments associated with the CTs will be requested through a future electric rate case. When combining the savings to be realized through securitization and other bill reductions associated with the added renewable investments, the average residential customer is estimated to see a bill impact of less than $10 per month for the total generation transition.”
As for the IURC, the commission says customer rates will not be adjusted to recover the cost of this project (an estimated $334 million) before the utility’s next base rate case or before the project is put into service. IURC says the Order states, “The flexible and controllable nature of the gas CTs will support the intermittent nature of the renewable generation in the Preferred Portfolio to ensure system reliability. We believe that this step of implementing the Preferred Portfolio, moving forward on the two CTs, is the best economic decision for CEI South’s customers.”
IURC also recognized that this new generation resource will serve the grid regionally in addition to the utility’s service territory. The Order states, “In addition, MISO, the operator of the electric grid in which CEI South is a participant, has indicated a system-wide need for controllable resources such as the CTs to ensure system reliability as more intermittent resources are added to the system.”
IURC directed CEI South to begin a collaborative process with stakeholders to track performance metrics. The Order states, “We believe performance metrics can be of significant value to CEI South, its customers, and the Commission…. We anticipate that this process will enable an analysis of CEI South’s performance over time and comparison with similarly situated utilities.”
Those who think this is a bad thing
The Citizen’s Action Coalition (CAC) says this is a bad thing. CAC says the Indiana Utility Regulatory Commission (IURC) issued an order approving CenterPoint’s request to construct two new fossil gas combustion turbines that will sit idle most of the time.
CAC says the new fossil gas plants were originally estimated to cost $323 million, raising monthly electric bills for residential customers by an average of $23 per month. CAC says since that time, gas prices have skyrocketed, and inflation has increased the cost of construction and other input costs, meaning customers could face even larger bill increases in the future because of this decision.
“This outrageous decision approves unneeded and expensive fossil gas power plants that will significantly raise the cost of electricity for CenterPoint customers,” said Kerwin Olson, Executive Director of CAC. “The IURC’s approval of more expensive fossil gas plants in the middle of a utility affordability crisis and the climate crisis shows how out of touch our utilities and their regulators are with Hoosiers who are struggling to make ends meet and demanding a transition to clean, affordable energy solutions. We renew our call for Governor Holcomb to immediately establish a Utility Affordability Task Force and urge Indiana policymakers to stand up for consumers instead of protecting monopoly utility profits.” The CAC has copies of the petition, testimony, order, and other case-related documents available here.
On CAC’s side is Energy for All, a coalition of faith, environmental, social justice and consumer advocacy groups, who released the following statement:
“This decision has terrible consequences for CenterPoint customers. These gas plants are too expensive and not needed, and will commit overburdened CenterPoint customers to paying nearly a billion dollars for decades to come. It’s outrageous that we should pay that much for plants CenterPoint admits will almost never run. CenterPoint can still change course and do the right thing for our community within their 20-year planning process which begins this year and take a serious look at replacing coal with clean and affordable wind, solar, energy efficiency, battery storage and an aggressive demand response program.”
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