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Alliance argues against Vectren's proposed solar project in Indiana

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Louisville, Kentucky β€” Alliance Resource Partners is urging Indiana regulators to deny Vectren South's application for a certificate of public convenience and necessity to construct a proposed 50-megawatt solar facility, according to filings with the Indiana Utility Regulatory Commission.

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Debate over what would be one of the largest solar projects in Indiana to date is heating up at the Indiana Utility Regulatory Commission, which is expected to enter a final order in the case in the first half of 2019.

Tulsa, Oklahoma-based Alliance, along with the entire Indiana coal industry, is opposing plans by Vectren South to shutter about 700 MW of its coal-fired generating capacity by 2023, keeping open only 270-MW Unit 3 at the Culley power plant in Warrick County, Indiana. Alliance has argued that fuel and generation "diversity" is not a sufficient justification for the $76 million project.

Alliance, in a regulatory filing last week, said Vectren has never demonstrated the need for additional generating capacity and is expected to have an approximately 200-MW generation surplus in 2025.

Given that projection, building the solar project in Perry County, Indiana, merely to diversify the utility's generation portfolio is ill-advised and could cost Vectren South's 140,000 ratepayers millions of dollars in unnecessary expense over the years, the coal company contends.

At the least, Alliance said Vectren should postpone the solar project by several years instead of starting construction later this year, as planned, if it receives the go-ahead from the IURC.

In October, Vectren entered into a proposed settlement with the Indiana Office of Utility Consumer Counselor, the state's utility consumer watchdog, and the Indianapolis-based Citizens Action Coalition environmental and consumer advocacy group that would permit the project to be built after the utility agreed to reduce some customer-related project costs.

Alliance suggested the commission find that the solar project represents "de minimis" diversification as a basis for rejecting the settlement.

Vectren, in a rebuttal to the Alliance filing, disagreed.

"As with other solar projects the commission has approved, increasing capacity was never a main driver for the solar project," Vectren said. "Vectren South presented evidence that the primary drivers for the solar project are diversifying Vectren South's generation portfolio, complementing existing generation resources, low variable-cost power, and responding to customer desires and encouraging economic development."

Vectren also disputed Alliance's claim that only a handful of Vectren's largest customers, including Toyota Motor Manufacturing USA, have encouraged the utility to add more renewable energy resources to its mix.

In an unrelated filing last week, the OUCC said Vectren South's coal inventory increased slightly to 446,422 st by October 31, 2018, from 439,944 st as of September 30, 2018. There was no immediate explanation from Vectren about the increase.

-- Bob Matyi, newsdesk@spglobal.com

-- Edited by Jennifer Pedrick, newsdesk@spglobal.com