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Bill aims to prevent reliability issues when coal plants close early

By Rebecca Thiele

Posted February 27, 2023

The former R. Gallagher Generating Station

The former R. Gallagher Station, now retired, seen from Shawnee Park in Louisville, Kentucky in 1988. Duke Energy retired the plant more than a year earlier than it expected. (William Alden / Flickr)

A state Senate bill aims to ensure Indiana doesn’t transition away from coal “too quickly” and threaten reliability.

If an electric utility wants to retire a big power plant or shut it down early — and it hasn’t laid that out in its plans — it would have to notify the Indiana Utility Regulatory Commission. The agency could then decide not to allow the utility to pay down the remaining cost of the plant in that shorter time frame — which would protect customers from a big rate hike.

Senate Bill 9’s author, Sen. Jean Leising (R-Oldenburg), said she understands the need to retire coal plants when they’ve lived out their useful life.

“To close early just to be — maybe more carbon friendly when your plant has another five or 10 years, that’s probably what I’m trying to get at," she said.

But that’s not the main thing driving utilities away from coal. That would be cheap renewables and natural gas and the high cost of maintaining older coal plants. And whether Indiana is making that transition too quickly is up for debate. The state ranked third for most coal use in the country in 2021.

Many of the groups that testified on the bill in committee were neutral, but had some concerns with the language. The Indiana Energy Association said that the IURC already has ways to make sure utilities will provide reliable energy to customers.

Join the conversation and sign up for the Indiana Two-Way. Text "Indiana" to 73224. Your comments and questions in response to our weekly text help us find the answers you need on statewide issues throughout the legislative session. And follow along with our bill tracker.

The Indiana Industrial Energy Consumers (INDIEC) spoke in opposition. INDIEC's Joe Rompala said he worries the bill could ultimately cost customers more if it keeps utilities from retiring expensive coal plants.

Just like a law passed in 2020, he said INDIEC sees this bill as a way, “to disregard economic signals or to put a thumb on the scale on one particular resource or another and delay the transition."

The Citizens Action Coalition said it likes that the bill would hold utilities to their plans, but would prefer the IURC had the ability to accept or reject utilities’ long-term plans in the first place.

Coal trade groups America's Power and Reliable Energy Inc. testified in favor.

The bill now goes to the full Senate.

Rebecca is our energy and environment reporter. Contact her at rthiele@iu.edu or follow her on Twitter at @beckythiele.