NIPSCO to spend $5B for power-system upgrades

NIPSCO plans to spend $5 billion in the next 10 years on electrical system improvements, including almost $1 billion on environmental upgrades at its coal-fired plants, and may spend even more if it decides to build its first new generating plant in decades, the northern Indiana utility said in a long-range plan filed with state regulators.

The resource plan NIPSCO filed recently shows it can meet customer demand for most of the next decade, but may need to build a new natural gas-fired generating plant as electric use increases.

"Even though the economy is now moving slowly, it is moving," NIPSCO chief executive Jimmy Staton told The Times of Munster's editorial board, the paper reported Sunday.

Although the utility won't need the increased electric generation for a decade, it could start soliciting proposals for building a gas turbine plant within two years. The plant would cost around $800 million, Staton said.

Three years ago, NIPSCO bought the Sugar Creek gas-fired generating plant in southern Indiana for $300 million. That changed NIPSCO from a utility that was almost 100 percent reliant on coal-fired plants to one that now generates about a quarter of its electricity from gas-fired plants and renewable energy sources.

The Merrillville-based utility plans to spend almost $1 billion on new environmental upgrades at coal-fired plants and another $1.5 billion to improve its transmission system during the next decade, Staton said.

NIPSCO currently has a settlement in its long-running electric rate case pending before state regulators. That settlement initially would boost a typical residential customer's monthly electric bill by 4.5 percent if approved by regulators.

Although most consumer groups have signed on to the settlement, the city of Hammond and the consumer advocate Citizens Action Coalition of Indiana have not. They claim the increases would favor some customer classes over others and disproportionately hurt those with low incomes. NIPSCO has 457,000 electric customers.

Staton said the NIPSCO rate case, now in its fourth year, has overshadowed other issues on which the utility is moving forward.

"We are about a lot more than just that," he said. "But when you have a rate case going on, that is all people hear about."

Construction projects to install environmental protections are already under way at the R.M. Schahfer generating plant, in Wheatfield. That project is shaping up as one of the largest industrial construction efforts locally and along with projects at other plants will employ up to 1,000 trades workers at its peak, Staton said.

"We feel like we are helping to create jobs in this economy," Staton said.

The work began when the utility reached a $613 million settlement with the U.S. Environmental Protection Agency earlier this year over longstanding allegations the utility had not installed proper environmental protections when upgrading its plants in the 1980s and 1990s.