NIPSCO gets OK to start $246 million Michigan City project

2012-09-18T17:00:00Z 2012-09-19T10:11:04Z NIPSCO gets OK to start $246 million Michigan City projectBy Keith Benman, (219) 933-3326
September 18, 2012 5:00 pm  • 

NIPSCO plans to begin a $246.4 million clean-coal construction project at its Michigan City Generating Station by early next year, following state regulators' approval of the project earlier this month.

The project is part of an ambitious plan to drastically reduce sulfur emissions at its coal-fired generating stations, with a more than $510 million project to install similar "scrubbers" already well under way at its R.M. Schahfer Generating Station in Wheatfield.

"It is primarily to comply with federal regulations both future and current," said NIPSCO spokesman Nick Meyer. "But there are also a number of benefits from a jobs standpoint, from a clean air standpoint and for economic development."

NIPSCO estimates the Michigan City project will create hundreds of construction jobs. More than 500 construction workers now are working at the Schahfer project.

The Indiana Utility Regulatory Commission issued a "certificate of public convenience and necessity" for the Michigan City project earlier this month. It also gave the utility the right to pay for it by attaching surcharges known as "trackers" to customers bills. Those surcharges only can be added to bills once the costs are actually incurred.

The scrubber projects at Michigan City and Schahfer received a powerful push forward in early 2011, when the utility reached a settlement with the U.S. Environmental Protection Agency requiring it to spend $600 million on environmental protections at its coal-fired power plants.

NIPSCO CEO Jimmy Staton updated investors on the Michigan City project and others to come during a presentation to investors in New York City last week.

He told investors NIPSCO also is planning to file requests with state regulators later this year for an estimated $200 million in projects designed to bring its electric generating stations into compliance with new U.S. Environmental Protection Agency rules on the emission of mercury and other toxins.

Staton also gave further details on a $500 million project that will result in the building of more than 100 miles of new high-voltage transmission lines in the central and northern parts of Indiana.

He explained that NIPSCO's service territory lies on the "seam" between two large regional electric transmission operators and the company plans to capitalize on that with the new project.

The NIPSCO projects will be among 17 being done by utilities throughout the Midwest designed to bring power from wind turbines and other producers to market.

"We believe there will be an electronic superhighway built to move electrons from the west to the east," Staton said. "We do not want to build that superhighway. But we do want to build the on-ramps, off-ramps and the loops that will reduce congestion."

About 97 percent of the NIPSCO power line project's cost will be borne by other utilities that get power through the Midwest Independent Transmission System Operator, which coordinates electric transmissions in a dozen Midwest states and parts of Canada.

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