Northern Indiana Public Service Co. LLC (NIPSCO), a subsidiary of NiSource Inc., has unveiled an initiative designed to transition customers to a more affordable and sustainable energy mix.
Referred to as “Your Energy, Your Future,” the effort detailed in the company’s 2018 integrated resource plan (IRP) lays out a blueprint to transition northern Indiana’s energy generation away from coal and toward renewable energy sources.
“Customers want what’s best for their families: energy that is affordable, reliable and sustainable. NIPSCO’s new plan puts them front and center,” says Violet Sistovaris, president of NIPSCO. “We have the opportunity to invest in balanced options that will deliver more cost-effective and cleaner energy for our customers. The ‘Your Energy, Your Future’ initiative envisions a brighter future that delivers the energy our customers need while reducing emissions and focusing on the long-term strength of our local economy.”
The company has also submitted a request to modify its existing electric rates to support changes in electric generation and service to customers. Over the long term, the changes NIPSCO is making will equate to more than $4 billion in cost-savings for customers, the company estimates. Becoming coal-free is also expected to improve the region’s environment, reducing carbon emissions by more than 90% by 2028, says NIPSCO.
The two filings with the Indiana Utility Regulatory Commission (IURC) are the result of a comprehensive analysis of NIPSCO’s future energy mix and months of meetings with customers, employees and local community leaders, the company says.
Transitioning electric generation
The initiative accelerates the anticipated retirement of NIPSCO’s five remaining coal-fired units and a transition to renewable energy. Under the plan, the company will retire Units 14, 15, 17 and 18 at the R.M. Schahfer Generating Station in Wheatfield, Ind., no later than 2023 and Unit 12 at the Michigan City Generating station in Michigan City, Ind., by 2028.
Operation of NIPSCO’s existing natural gas-fired Sugar Creek Generating Station in West Terre Haute, Ind., and the Norway and Oakdale hydroelectric dams along the Tippecanoe River will continue.
Though it’s too early to announce workforce changes, the company plans to coordinate with internal and outside regional and statewide partners to reduce the impact of the transition over the next five to 10 years.
To replace the coal-fired plants, NIPSCO anticipates pursuing largely renewable energy resources – solar and wind energy – combined with battery storage. The timeline for retirement is faster than indicated in NIPSCO’s last IRP, as the energy market has since produced more competitive and cost-effective options for NIPSCO customers, the company explains.
Though customers will realize savings over the long term – largely through lower fuel costs from increased use of renewable energy and the avoidance of costs associated with maintaining and upgrading aging facilities – NIPSCO’s separate request to adjust electric rates proposes an increase for customers to support the transition, the company says.
“We know that every dollar matters to our customers, so we want to be upfront about shorter-term shifts some of our customers will see in their bills during this transition,” explains Sistovaris. “This proposal allows us to provide the level of service our customers expect, it addresses changes in the way major industrial customers will acquire electricity and it proposes new assistance programs for income-eligible customers.”
NIPSCO’s proposal must be reviewed and approved by the IURC, and the nearly yearlong process includes direct input from customers and the public. Under NIPSCO’s request, newly proposed electric rates would be phased in over two steps in September 2019 and March 2020. The average residential customer would see an $11 per month increase – or 12% – in their electric bill. Included is a proposal to increase the existing, fixed monthly customer charge by $3 per month.
NIPSCO’s request represents an increase in annual revenue of $21 million. Though the company says it already offers a range of energy savings and weatherization programs, NIPSCO is also working to identify and create a new electric bill payment assistance and home weatherization program for income-eligible customers.
The primary drivers of the proposed increase include investments in upgrading electric infrastructure, environmental upgrades and a shift in the way some large industrial customers will obtain electricity in the future.
Meanwhile, NIPSCO maintains that its electric rates still remain below the national average. NIPSCO, part of NiSource’s seven regulated utility companies, serves approximately 820,000 natural gas and 460,000 electric customers across 32 counties in Indiana.