Source: platts
Indiana's investor-owned electric utilities plan to spend more than $3 billion on pollution controls at their coal-fired power plants now that Indianapolis Power & Light has decided to invest $511 million on environmental upgrades at its two largest coal plants.
IP&L, an AES Corp. subsidiary, hopes to begin installing activated carbon injection controls to reduce mercury emissions at its 1,760-MW Petersburg plant in Pike County and 427-MW Unit 7 at its Harding Street plant near downtown Indianapolis later this year if it receives final approval from the Indiana Utility Regulatory Commission, John Haselden, principal engineer in IP&L's regulatory affairs department, said Wednesday.

"We'd like to have IURC approval by June 1," he said.

As part of the expenditure, IP&L has signed a $420 million contract with Indiana Environmental Partners for engineering, procurement and construction of the new controls. IEP is a joint venture between Chicago-based Sargent & Lundy and Kiewit Corp. of Omaha, Nebraska.

IP&L CEO Ken Zagzebski said in a statement the new controls will cut mercury emissions by approximately 80%. The project is aimed at allowing the utility to comply with the Environmental Protection Agency's new Mercury and Air Toxics Standards rule.

While IP&L wants to keep Harding Street Unit 7 on coal, it intends to stop burning coal in a few years at twin 100-MW Units 5 and 6 at the baseload plant.

"We're looking at whether they can be repowered with gas or not," Haselden said.

IP&L issued a formal request for proposals last summer for up to 600 MW of gas-fired combustion turbine generation starting in 2017. The utility has a short list of bidders and could decide to construct a new gas plant itself. IP&L plans to stop burning coal at its smallest fossil plant, 341-MW Eagle Valley near Martinsville, but it is uncertain if the facility will be retired.

Environmentalists who oppose IP&L's planned coal plant spending will air their complaints at a Thursday night hearing in Indianapolis sponsored by the IURC, according to Kerwin Olson, executive director of the Citizens Action Coalition consumer/environmental advocacy group.

"You're looking at another $500 million atop the $615 million they've already invested in coal-fired power plants that have an average life of 40 years," he said. "IP&L has a business model centered on coal, as 99 percent of the energy generated by IP&L comes from coal-fired power plants. IP&L should be looking at moving into the 21st century" and place more emphasis on renewable energy resources and energy efficiency.

Across Indiana, though, utilities are earmarking major dollars to keep large coal plants, the workhorses of their generation fleets, running for years to come.

Indiana Michigan, an American Electric Power subsidiary, is proposing a $1.4 billion pollution-control project at one 1,300-MW unit of its 2,600-MW Rockport coal plant in Spencer County.

"Our intent is to continue Rockport as a coal plant," said Sarah Bodner, an I&M spokeswoman. The utility is holding discussions with various parties to determine how it could comply with EPA rules as inexpensively as possible at Rockport's other coal unit.

Duke Energy Indiana, the state's largest electric utility with 750,000 customers, has a $450 million environmental improvement plan pending before the IURC, company spokeswoman Angeline Protogere said.

Construction is under way, meanwhile, on a $250 million scrubber project at 469-MW Unit 12 at Northern Indiana Public Service's Michigan City coal plant on the shores of Lake Michigan.

Altogether, the NiSource subsidiary's environmental investments are expected to approach $900 million over the next few years.

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