Lawmakers say Indiana bill to monitor early coal plant closures would ensure reliability

How quickly can—or should—Indiana transition away from coal? That’s a key question in the state legislature as lawmakers debate a bill that seeks to slow down the retirement of certain coal-fired power plants.

Senate Bill 9, authored by Sens. Jean Leising, R-Oldenburg, and Susan Glick, R-LaGrange, would require utilities to provide the Indiana Utility Regulatory Commission with at least six months notice if they plan to retire, sell or transfer a generating facility of at least an 80-megawatt capacity.

“To open a new generation facility, IURC has to approve it,” Leising said last week in the House utilities committee. But to close one, currently, there’s no regulation or requirement. So. I thought that perhaps we really did need something in that regard.”

Supporters maintain the bill will help ensure statewide energy reliability and keep Indiana from relying too heavily on natural gas. Some energy advocates are more hesitant, however, expressing concern that the measure could slow the state’s transition to cleaner energy sources.

“Is this legislation really necessary? Do we need another government process here?,” asked Rep. Matt Pierce, D-Bloomington.

The bill is up for a full House vote this week. It’s reminiscent of a separate proposal approved in the 2020 session that requires the state’s utilities to give the IURC a three-year notice if they plan to close an energy-producing plant.

Giving the IURC more say

Electric utilities wanting to retire a power plant or shut one down earlier than previously planned would be required to notify the IURC, according to the proposed legislation.

The IURC could then approve or deny the closure, in which case utilities would be prevented from paying down the remaining cost of their plant in a shorter time frame — and protecting customers from rate hikes, Leising said.

If denied, utilities would not be allowed to submit a new request for 180 days.

Leising said she’s not opposed to retiring coal plants once they’re no longer useful, but for now, she wants to keep those power plants operational until renewable energy becomes more dependable.

She emphasized that her bill would ensure the IURC “would have eyes on what’s closing before the anticipated date.”

“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 until we have better battery storage,” Leising said, referring to devices that enable energy from renewables, like solar and wind, to be stored and then released when customers need power most.

“I think that there are so many reasons why we should be concerned about early closures,” she continued. “I don’t want any company to retain a unit that is going to cost more than they can possibly get back out of it … it would be like keeping the junker car or the junker truck—and it just doesn’t make sense anymore.”

Still, Kerwin Olson, executive director of the consumer advocacy group Citizens Action Coalition, noted that an extensive process already exists for utilities planning to take any generation sources offline.

House Enrolled Act 1520, which passed the General Assembly unanimously in 2021, stipulates that utilities must file their reliability metrics annually with the IURC

The state commission is then charged with reviewing and determining if utility companies are meeting Hoosiers’ power needs. If the IURC determines they are not, an issue is ordered for the utility companies to pay for or generate more electricity.

“That’s why it’s not a huge concern to us,” Olson said, adding that the Citizens Action Coalition remains neutral on the bill. “That doesn’t give (the IURC) any additional score they really don’t already have.”

Olson said, too, that the requirement for utilities to give the IURC advance notification about a coal plant is only required if that retirement is not indicated in existing integrated resource plans—the roadmaps that large utilities use to plan out generational acquisitions over long periods of time.

“Utility companies don’t wake up one day and go, ‘Hey, let’s retire,’” Olson said. “This is stuff that takes years.”

Meanwhile, coal trade groups—including America’s Power—have consistently testified in favor of the measure’s provisions.

“SB 9 would help assure that the retirement of Indiana power plants, especially those powered by coal, does not impair electric reliability,” said Michelle Bloodworth, president and CEO of America’s Power. “We support SB 9 because it will help assure that Indiana’s electricity supply is reliable and resilient.”

Ongoing moves away from coal

Olson held that Indiana is still making progress and actively transitioning away from coal, though.

“Utilities are transitioning—we’ll have very little coal on our grid post-2030. So, we’re doing it,” Oslon said. “We will have large power plants around for a while. Those aren’t going away anytime soon. But we will be replacing those things.”

Across the country, utilities are implementing plans to require nearly a quarter of all coal-fired plants by the end of the decade.

As of 2021, the Hoosier state ranked third for most coal use in the country. But Indiana is one of four states with the most coal-fired capacity announced to retire through 2029, according to the U.S. Energy Information Administration.

Some say Lesing’s bill could prevent some utilities from retiring their coal-fired power plants ahead of schedule, however, delaying the transition to fuel sources that are less carbon intensive, like solar and wind coupled with battery storage.

Environmental advocates said they also remain concerned about coal ash — the material left after burning coal — contains heavy metals that contaminate water. For decades, Indiana has been producing millions of tons of coal ash, much of which is stored in the floodplains of rivers or Lake Michigan, according to the Hoosier Environmental Council.

Two bills—House Bill 1190 and Senate Bill 399—that sought to establish goals and requirements around cleaning up coal ash in Indiana died in committee earlier in the legislative session.

Instead, lawmakers are moving forward with House Bill 1623, which is now under consideration in the Senate chamber. The bill would restrict the Indiana Department of Environmental Management from implementing requirements stricter than federal law on Indiana coal plants—specifically coal ash storage ponds.

The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.