Indiana regulators reject Vectren’s plan to build $780M gas plant

Indiana utility regulators have rejected a plan by Vectren South to build a large, gas-fired power plant near Evansville, saying it would obligate customers for 30 years “in a time of rapid change.”

The Indiana Utility Regulatory Commission said Wednesday it denied a certificate to the utility to build an 850-megawatt combined-cycle gas turbine that had a price tag of about $780 million.

“The proposed large-scale single resource investment for a utility of Vectren South’s size does not present an outcome which reasonably minimizes the potential risk that customers could sometime in the future be saddled with an uneconomic investment or serve to foster utility and consumer flexibility in an environment of rapid technological innovation,” the state order said.

Officials for Vectren, which was acquired last year by Houston-based CenterPoint Energy Co., were not immediately available for comment.

The company proposed the plant last year to replace the bulk of its aging coal-burning units. It had planned to build it on the site of its existing AB Brown coal-fired power plant in Posey County.

The utility commission said Vectren’s evidence did not convince it that the utility’s proposal would allow it flexibility over the coming years.

“We are hard pressed to see how reliance on one facility for so much of the Vectren South system requirements is consistent with maintaining flexibility to respond to changing market conditions and technological change,” the order said.

Several environmental and consumer groups fought to stop the project, saying it would commit Hoosiers to imported fracked gas for several decades, when the utility should be looking at cleaner, renewable resources.

They also said Vectren would raise rates to pay for a plant that was too big and expensive, and that the design was based on “shoddy modeling” that didn’t consider lower-cost alternatives.

Among the groups that opposed the plant were Citizens Action Coalition of Indiana, Earthjustice and the Sierra Club. The Indiana Utility Consumer Counselor also objected, saying Vectren needed to explore other options.

“The commission did the right thing and protected the captive ratepayers of Vectren from this absurd and risky proposal,” said Kerwin Olson, executive director of Citizens Action.