Indianapolis Power & Light Co. plans to build a $631 million, environmentally friendly power plant near Martinsville as it retires six coal-fired units at the area’s Eagle Valley Generating Station.
Construction of the 650-megawatt plant adjacent to the Eagle Valley station about five miles north of Martinsville is slated to begin in 2014 and finish in 2017, IPL announced Wednesday. The project is expected to employ as many as 660 workers during the construction phase, but only 25 once it begins operation.
IBJ first reported the utility’s plans for the plant on Tuesday. IPL has submitted the plans to the Indiana Utility Regulatory Commission for approval.
Morgan County was one of several area sites in competition to land the plant, IPL officials said. In October, the Morgan County Council approved a 10-year, 60-percent tax abatement package to lure IPL.
The company touted the new plant as an example of clean and efficient energy production. It will use a system that combines two natural gas-fired turbines with one steam turbine, lowering environmental emissions by more than 98 percent over coal-powered plants.
“We considered all of our options during a very extensive and competitive evaluation process,” said IPL CEO Ken Zagzebski in a prepared release. “Building a gas-powered plant is the most affordable and reliable solution for our customers.”
The plant will help replace power lost when IPL eliminates some of its existing infrastructure. The utility plans to retire the six existing units at the Eagle Valley Generating Station in March 2016. The station has a production capacity of 341 megawatts.
IPL also expects to retire or convert four units at Harding Street Generating Station on the southwest side of Indianapolis. Plans are under way to convert Harding Street Generating Units 5 and 6, totaling 200 megawatts, from burning coal to utilizing natural gas to create electricity, IPL said. The project is also subject to IURC approval.
As a result of new federal air quality standards and the projects slated to create cleaner energy, IPL expects customers to see their electricity costs rise 2 to 3 percent per year through 2018.