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Ind. utility watchdog wants power provider to lower coal costs

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Ind. utility watchdog wants power provider to lower coal costs

Indiana's utility consumer watchdog "continues to press" Northern Indiana Public Service Co. to lower its thermal coal costs through new contracts and renewals and remains concerned about the utility's rail transportation expense, the Office of Utility Consumer Counselor said in a new regulatory filing.

NIPSCO, a subsidiary of Merrillville, Ind.-based NiSource Inc., recently retired two coal units totaling 480 MW at its Bailly plant on Lake Michigan and is proposing to shutter another 722 MW of coal generation at its 1,780-MW R.M. Schahfer plant in 2023.

Records show an Alliance Resource Partners LP coal contract with the utility rolled off near the end of May, and an Arch Coal Inc. agreement is set to expire at the end of this year. That would leave only one term contract, with Peabody CoalSales LLC, that runs through 2020, to supply the remaining Schahfer units and the 469-MW Michigan City plant.

Gregory Guerrettaz, a certified public accountant, said in written testimony to the Indiana Utility Regulatory Commission that the consumer agency recently conducted an on-site audit of the utility with key NIPSCO personnel.

The agency, he said, "continues to press NIPSCO on all opportunities to lower coal costs through new contracts and renewals."

NIPSCO, he said, "was successful in lowering its coal transportation costs" and will be providing testimony to the commission about those efforts.

Guerrettaz did not disclose any dollar amounts, and NIPSCO officials did not respond July 3 to a phone call seeking information.

NIPSCO usually buys about 7 million tons of coal annually, mostly from the Powder River Basin.

Bob Matyi is a reporter for S&P Global Platts, which, like S&P Global Market Intelligence, is owned by S&P Global Inc.