Bill designed to 'pause' coal plant retirements moves forward in Indiana

New York — Indiana lawmakers advanced legislation designed to slow the pace of the state's coal plant retirements.

The Indiana House of Representatives voted 52-41 Monday to pass an amended version of House Bill 1414, which states that a public utility "may not retire, sell, or transfer a reliable capacity resource with a capacity of at least 80 [MW]" unless the utility first notifies the Indiana Utility Regulatory Commission.

The utility must give IURC "at least six months advance notice" of any planned retirement, sale or transfer if it has not already been disclosed in the utility's most recent integrated resource plan.

IURC would review any potential power plant retirements through May 1, 2021, and hold a hearing "concerning the reasonableness of the planned retirement, sale, or transfer."

"On the road to energy transition, I can tell you this bill is not a roadblock. This is a speed bump," said state Representative Ethan Manning, a Republican.

Rep. Ed Soliday, the bill's sponsor and a Republican, said five regulated electric utilities in Indiana are looking for guidance on the state's energy policy amid changes to the generation mix.

"Whether that's coal or rabbits on a treadmill, we need the lights to come on when we flip the switch," Soliday said during Monday's floor debate on H.B. 1414. "We're in transition, and all we're asking is to be able to manage it."

NiSource Inc. subsidiary Northern Indiana Public Service Co. plans to retire all of its coal capacity in the state within the next 10 years as part of the company's transition to cleaner energy resources. The utility has issued three requests for proposals targeting 2,600 MW of wind, solar, and storage capacity to replace its aging coal-fired fleet.

American Electric Power agreed to retire its 1,300-MW Rockport Unit 1 in Spencer County, Indiana, by the end of 2028 as part of a U.S. District Court-approved agreement concerning air pollution from multiple AEP plants in the Midwest. The Rockport unit, which AEP subsidiary Indiana Michigan Power Co. operates, is among the largest coal units in the nation.

Duke Energy Corp. subsidiary Duke Energy Indiana LLC's most recent IRP moves up the planned retirement dates of more than 4,100 MW of coal capacity by shutting down its Cayuga and Gibson coal plants by 2038.

"I don't know very many of my colleagues that are committed to coal. I don't think we can save it," Soliday said. "All this bill says is, come let's reason together, let's bring experts together. ... The market will take care of itself."

The legislation includes a provision that allows utilities to recover "the cost of not more than 90 days" of coal supply through a fuel-adjustment charge. This provision expires May 1, 2021. The bill also prioritizes retraining coal mine workers.

Rep. Matt Pierce, a Democrat, said the legislation will raise customers' electric rates and "delay the closing of inefficient plants."

Indiana passed a law in 2019 that establishes a 15-member energy task force to study the state's regulation of electric generation; evaluate how possible shifts in electric generation may impact reliability, system resilience and affordability; and develop recommendations to address portfolio concerns. The newly created 21st Century Energy Policy Development Task Force must issue a report of its recommendations by December 1.

"It is so important to allow this task force to do its work with the information that we have currently and not continue to change that picture on them," Republican Rep. Alan Morrison said. "This 15-month pause is OK."

Democratic Rep. Ryan Hatfield called the proposal and the requirement for IURC review before closing coal plants "a direct intervention" by state lawmakers into the regulatory process.

Republican Rep. Bruce Borders said, however, that the vast majority of the state's electricity is generated by coal. "I think it would be to our great detriment to treat coal as a thing of the past. ... I think it's not only a thing of the present but, very likely, a thing of the future as well," Borders said.