trending Market Intelligence /marketintelligence/en/news-insights/trending/ahadrtfzsgnxhlcp0yzycg2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Operating costs at NIPSCO coal plants eyed for retirement run above market

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights - September, 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Operating costs at NIPSCO coal plants eyed for retirement run above market

Operation and maintenance expenses exceed wholesale power prices at five coal-fired generating units Northern Indiana Public Service Co. has identified for future retirement, according to an S&P Global Market Intelligence analysis.

The company, known as NIPSCO, said Sept. 19 that it is considering shutting its R.M. Schahfer 14, 15, 17 and 18 units no later than 2023 and its remaining unit at the Michigan City plant by 2028. Both plants, with a combined generating capacity of nearly 2,100 MW, operate in the Midcontinent ISO market. In June, the company retired its 480-MW coal-fired Bailly plant.

Citing an analysis tied to its integrated resource plan in Indiana, the NiSource Inc. subsidiary said retirement of its remaining coal-fired generation will "significantly accelerate carbon reductions" across its service area. Additionally, NiSource Executive Vice President and NIPSCO President Violet Sistovaris has said that retirement of the "aging coal fleet sooner will cost substantially less compared to our original plans for extending retirements over a longer duration."

The R.M. Schahfer units, located in Jasper County, Ind., entered service between 1976 and 1986. They have a combined capacity of 1,625 MW and a total net generation of 4,948,283 MWh in 2017, as annual capacity factors ranged from 16.73% for Schahfer unit 14 to 70.27% for Schahfer unit 18.

Michigan City ST 12, which entered service in 1974, is a 469-MW facility in LaPorte County, Ind., that generated 1,280,833 MWh in 2017, with capacity factor at 31.18%.

SNL Image

For all identified coal-fired units, operations and maintenance, or O&M, expenses exceed wholesale power prices. Around-the-clock day-ahead market price at the MISO Indiana hub averaged $29.36/MWh in 2017, while modeled O&M costs spanned $42.63/MWh to as much as $71.26/MWh for the R.M. Schahfer units and $43.19/MWh for Michigan City ST 12, according to S&P Global Market Intelligence data. Similar trends are expected to persist through the current year into 2020.

SNL Image

Fuel delivery data for the first half of 2018 show Peabody Energy Corp. and Arch Coal Inc. as major fuel suppliers to the Schahfer and Michigan City plants. Schahfer received 1,158,000 tons of coal in the first half of 2018, of which 76.4% came from Peabody Energy, mostly its Gateway mine in Randolph County, Ill., and 23.6% from Arch Coal, while Michigan City received 698,000 tons, of which 90.1% came from Arch Coal's Black Thunder mine in Campbell County, Wyo.

SNL Image

Renewable resources favored as replacement capacity

The potential retirements could equate to a significant reduction in NIPSCO's overall owned generation, of which coal has consistently accounted for the lion's share. Over the last six years, owned coal-fired generation as a share of the net total including power purchases peaked at 64.9% in 2014 and dipped as low as 45.4% in 2016.

Power purchases make up the second-largest share of NIPSCO's power supply resources. The utility is currently a counterparty to power purchase agreements, or PPAs, with 10 renewable energy facilities in Indiana, Iowa and South Dakota, though the bulk of its contracted supply comes from two wind farms. Contracted capacity ranges from 1 MW to 50 MW, with contract durations at 15 years to 20 years.

SNL Image

NIPSCO is eyeing renewable energy resources, such as wind, solar and battery storage, as the most likely replacements for the coal capacity. "Technology and market changes continue to transform the energy industry, opening more competitive options and it's the primary driver of the changes being considered for our system," Sistovaris said.

NIPSCO does not currently have any renewable energy projects under development, but 18 other renewable energy assets in various stages of development with a combined operating capacity of 1,507 MW are scheduled to go online in MISO's footprint in Indiana through 2021. Cumulative operating capacity of renewable energy sources, comprised of solar, hydro, wind and biomass, in the MISO footprint in Indiana was at 658 MW in 2017 but is expected to reach 2,120 MW by 2021. Wind will lead capacity additions, with 878 MW slated to enter service in 2019 alone.

Of the operating capacity from renewable sources, 517 MW from 39 power plants are secured under PPA, with 372 MW are locked into active PPAs, 75 MW are under PPAs for future implementation and another 70 MW have PPAs with unspecified contract years.

SNL Image

SNL Image

Did you appreciate this analysis? Click here to turn on alerts for future power Data Dispatches.