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 MERRILLVILLE — NIPSCO has submitted a long-range plan to state regulators that calls for shutting down Bailly Generating Station, in Chesterton, by mid-2018 and two units at Schahfer Generating Station, in Wheatfield by the end of 2023.

The Bailly Generating Station is coal-fired as are the two units to be shut at Schahfer. Other Indiana utilities such as Duke Energy have also shut down significant portions of their coal-fired generating fleets in recent years.

“Customer needs and the energy industry continue to evolve, and it’s vital that we plan for tomorrow, today,” said NIPSCO President Violet Sistovaris. “We’ve identified a preferred path that provides customer and environmental benefits, reflective of our goal to focus on providing affordable, clean energy while maintaining flexibility for future technology and market changes.”

The closure of both coal-fired electric generating units at Bailly, and two of four units five years later at Schahfer, would impact approximately 250 employees. The utility’s goal is to provide other jobs for those employees by working with union leadership, Sistovaris said.

One small natural gas-fired generating unit at Bailly would remain in operation but continue to be evaluated as part of the long-term plan.

The Integrated Resource Plan NIPSCO submitted to the Indiana Utility Regulatory Commission Tuesday is the result of months of work, including several meetings with stakeholder groups such as industrial, consumer, and environmental.

With the closures, NIPSCO would produce only about 50 percent of its electricity from coal, as compared to 90 percent just six years ago. Today it's about 72 percent.

NIPSCO does not need the IURC’s approval to close generating stations. But it will have to apply to the IURC in order to recover so-called stranded costs, which are basically investments they have made in the plants that have not yet been charged to customers.

But NIPSCO will have to file for permission with the Midcontinent Independent System Operator to take the coal-fired generation offline. That organization oversees the electric grid in 15 states and one Canadian province.

On Tuesday, NIPSCO also filed a request with the IURC to spend approximately $399 million on environmental upgrades at Schahfer and its Michigan City Generating Station. The avoidance of such environmental compliance costs, driven by new federal mandates soon to take effect, is one reason NIPSCO has given for shutting down Bailly and the two units at Schahfer.

The utility plans to rely primarily on its own electric generating capacity through 2019 to fill the void in supply the closures will create, according to the Integrated Resource Plan. But after that, it sees the purchase or construction of a combined-cycle gas turbine electric generating station as its best bet for filling supply needs, which will become greater once the two units are shut down at Schahfer.

On a morning conference call on third-quarter earnings with analysts, the CEO of NiSource’s parent company was asked if NIPSCO is planning to use renewable sources to fill future electric supply needs.

“We will continue to look at the ideal portfolio before we commit to those decisions,” said NiSource CEO Joseph Hamrock. “But we have a couple of years to do that.”

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