Indiana Power And Light Company says its dependence on coal will fall to 44 percent by 2017 as it switches to natural gas.
Environmentalists say the energy efficiency programs could help the state meet new EPA requirements aimed at cutting carbon emissions.
A Sierra Club report indicates 16 coal plants in Indiana are discharging toxic metals into rivers.
Renewable energy advocates want Indiana University to follow the lead of 19 other campuses that plan to close their coal power plants.
Indiana ranks particularly high in chromium and nickel. Energy companies say they are taking steps to decrease their emissions.