Vectren reveals 20-year plan to use more renewable resources, retire coal plants

The Evansville-based utility said its “preferred scenario” for the next 20 years is subject to change based on numerous factors. But Vectren signaled big-picture goals of retiring some decades- old coal plants in the region and taking advantage of low, stable natural gas costs.

Vectren said consumer cost of electricity, along with the environment and government regulations, all were considered in its 20-year, Integrated Resource Plan (IRP). The plan must be updated every three years and is subject to Indiana Utility Regulatory Commission approval.

The company on Tuesday had the final of three “stakeholder meetings” about the IRP, attended by residential customers, cleaner air advocates and others.

Vectren’s residential electric rates are the state’s highest, although it has not filed a rate case in six years. The utility does not anticipate seeking higher rates in the near future, CEO Carl Chapman said.

The IRP’s “preferred portfolio” calls for retiring the coal-fired Brown plant in Posey County and half of the coal-fired Culley plant in Warrick County by 2024. Vectren also would withdraw its co-ownership of another Warrick coal facility, which it operates with Alcoa Warrick Operations, by 2020.

The remaining half of Culley would be upgraded to meet an Environmental Protection Agency rule on bottom ash. Meeting that rule at all coal-fired plants would cost the utility about $240 million, Vectren officials have said.

To replace the lost coal-generating power in 2024, Vectren would build an 889-megawatt natural gas facility. Vectren’s modeling calls for it to be built at the Brown location in Posey County, but Chapman said that is not a final decision.

Fifty megawatts of solar energy are set to join Vectren’s portfolio by 2019. That date is moved up from 2027 in the prior IRP. Chapman also said smaller, pilot projects using solar energy will be pursued.

As an example, he mentioned the planned Urban Living Research Center Downtown, which is to be one of the Southwest Indiana projects funded by the Regional Cities Initiative program. It is a partnership of Vectren and Haier America.

Cleaner air advocates have pushed Vectren to move faster on renewables. Chapman said Vectren’s interest is unquestioned, but the cost remains an impediment.

“(Sunlight) is not there all the time, and therefore you have to back it up with something,” Chapman said. “You have to factor in the cost of what you back it up with, and you have to factor in the cost of the renewables. And when you do that, it’s not cost-effective at this point. It may be down the road. The way it could be (cost effective) would be related to battery storage.”

It’s unclear what impact the new presidential administration will have on EPA rules, which govern power-generating facilities. President-Elect Donald Trump has said he would review such regulations.

Vectren officials, though, said the regulation impacting them the most -the one that forbids bottom coal ash from being slurried into a pond -- is part of the Clean Water Act and would be more difficult for a new administration to set aside.

Development of Vectren’s new IRP received ample attention from cleaner air advocates, who point to the utility’s location in an Ohio River region rife with coal-fired plants operated by multiple companies.

The region’s air quality is poor by some measures. According to the Center for Public Integrity, more toxic pollution from coal plants was sent into the air within 30 miles of Evansville than around any other mid-sized or large American city in 2014. But Vectren points to its own efforts over several years to reduce emission of harmful substances.

“Vectren’s 20-year plan acknowledges the need for a lower carbon future, with the retirement of most of its major polluters by 2024,” said Wendy Bredhold, campaign representative for Sierra Club’s Beyond Coal Campaign in the Ohio River Valley. “We applaud Vectren for moving to phase out coal, which CEO Carl Chapman said will result in a 60-percent reduction in carbon from 2005 levels, but this plan should include less reliance on gas and more on energy efficiency and renewable energy. We will keep pushing Vectren for more efficiency, wind and solar.”

Evansville resident Mallory Rodenberg applauded the transition away from coal but not what she called “overreliance” on natural gas.

“I understand that there needs to be an energy mix in this transition, but it does not make sense to shortchange those things that will decrease customers’ bills while heavily investing in volatile gas,” Rodenberg said.

Vectren said its IRP will be submitted to the IURC in December. The commission will respond to all Indiana utilities that filed an IRP, including Northern Indiana Public Service Co. and Indianapolis Power & Light, by summer 2017.

Vectren delivers electricity to about 144,000 customers in Gibson, Dubois, Pike, Posey, Spencer, Vanderburgh and Warrick counties.