Thursday, August 15, 2013
Ind. Gov't. - "IPL coal plant upgrades get OK by state regulators" but with a $10 million penalty
John Russell has this Aug. 14th Indianapolis Star story. It begins:
Indianapolis Power & Light Co. has won state approval to spend more than $500 million on environmental upgrades at two old coal-fired power plants, a move that will raise rates starting next year.Dan Hulman has this report in today's IBJ, headed "State sends IPL $10 million 'message' for subpar work." Some quotes:
The rate increase was fought by the Sierra Club and Citizens Action Coalition, who said electric customers shouldn’t have to pay higher rates to extend the life of outdated coal plants. They want IPL to invest in clean, renewable energy sources, such as wind or solar power.
The Indiana Utility Regulatory Commission on Wednesday approved the company’s plan to spend $511 million on upgrades to its Petersburg and Harding Street coal-fired plants. Individual generating units at those plants are 27 to 46 years old.
Displeased with the quality of work IPL put into its request for state approval, the Indiana Utility Regulatory Commission opted to send IPL a "message" in the form of a $10 million penalty.
Specifically, the state agency tacked on an extra $10 million to a credit that IPL must give its customers as part of its project. In all, IPL must credit $39 million—up from an originally expected $29 million—for what is known as an environmental cost recovery rate base credit. * * *
"IPL’s presentation of its case in this proceeding fell below our expectations given the size of the proposed capital investment, the timeframe in which this Commission was provided to make a decision, and the contested nature of the proceeding that should have been anticipated prior to filing this Cause,” commissioners wrote in Wednesday's order approving the plant upgrades.
In particular, the company did not provide cost production models, Wednesday’s order notes.
Commissioners referred to $10 million increase as a “direct message to IPL management concerning how this proceeding should have been conducted.”
“Merely chastising IPL in this Order would not, in our opinion, have a lasting impact on insuring [sic] the quality of the support in the regulatory process,” the order said. “Instead, this Commission should provide feedback to a utility in a manner that provides an incentive for improving quality, while moving the regulatory process forward.” * * *
Environmentalists, including the Sierra Club’s Beyond Coal Campaign, had challenged IPL’s plans, saying they weren’t sufficient.
It would be better, opponents said, to shut down the plants altogether and replace them with more modern technology, like IPL is doing with a $631 million natural gas plant that will replace coal-fired units in Martinsville.
Opponents argued in the case that IPL's research was too slipshod and did not back its claims that upgrading coal units would be better.