State seeking input on IPL’s $100M plan to upgrade Petersburg plant

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The Petersburg generation station in 2016. (IBJ file photo)

Customers of Indianapolis Power and Light Co. can tell state regulators their opinion Monday evening on the utility's proposal to raise rates to pay for equipment that would allow a Pike County plant to continue burning coal.

IPL wants to install about $100 million worth of pollution controls at its Petersburg generating station, a move it says will allow it to keep burning coal and meet strict environmental regulations for sulfur dioxide and coal ash.

The 1,700-megawatt plant is the largest generating station in IPL's fleet.

If state regulators agree, that could raise a typical residential customer’s monthly bill 20 cents next year. That amount would climb in subsequent years to $1.40 a month by 2021, according to IPL estimates.

A public hearing will take place at 6 p.m. at Crispus Attucks High School, 1140 Dr. Martin Luther King Jr. St. Members of the public can state their opinions to the Indiana Utility Regulatory Commission, which will decide whether to allow IPL to pass the costs onto customers.

IPL spokeswoman Brandi Davis-Handy said the company will not be presenting or speaking at Monday's hearing. State utility regulators will not respond to comments. The hearing was requested by State Rep. Rep. Cherrish Pryor, D-Indianapolis.

The company’s request is raising the ire of some consumer and environmental groups, which say the Petersburg plant is old and inefficient, and will likely require millions of dollars in upgrades every few years to meet a series of stricter environmental regulations. The plant has four active units, which went online between 1967 and 1986.

The Sierra Club, Citizens Action Coalition and some other environmental groups say the utility should end coal-burning at the Petersburg plant, which is one of the dirtiest power plants in Indiana. The plant has repeatedly been cited for exceeding emissions standards for sulfur dioxide, which has been linked to breathing problems.

IPL stopped using coal earlier this year at two other plants—Harding Street in Indianapolis and Eagle Valley in Martinsville—in favor of natural gas.

The Petersburg plant has had trouble competing against other plants that use natural gas. Petersburg operated at less than 60 percent of capacity last year—down from nearly 80 percent in 2010, according to SNL Energy, an energy research firm.

IPL said it studied a wide number of options for Petersburg, including converting the four generating units to natural gas, and retiring them and replacing them with other resources. In the end, it concluded coal was the best option to keep rates affordable.

The utility said the alternative to upgrading the Petersburg facility would cost more, which would "further burden our customers." IPL has already invested $450 million in pollution controls in Petersburg in recent years.

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