NIPSCO has won approval from a regional electric grid coordinator to end electricity production at its coal-fired Bailly Generating Station on May 31, 2018.
The Midcontinent Independent System Operator, or MISO, granted its approval earlier this month. It is the key approval the utility had to win, as the Indiana Utility Regulatory Commission does not have jurisdiction when it comes to approving the shutdown of electric generation.
As part of a six-month process, the MISO determines if the closure would affect reliability of electric systems in the Midwest, according to MISO spokesman Jay Hermacinski. If no reliability issues are identified, the power plant is approved for retirement.
The MISO coordinates electricity flows in a 15 state Midwest area as well as one Canadian province. It acts like a traffic controller for electricity coursing through thousands of miles of high-voltage power lines. It provides management for competitive markets, transmission and resource planning, reliability assurance and tariff administration.
"Our job is to keep the lights on, "Hermacinski said.
NIPSCO discussed the Bailly closure with consumer, environmental, and industrial groups throughout the summer. In November, it submitted an Integrated Resource Plan to the Indiana Utility Regulatory Commission that included the Bailly shutdown as well as the shutdown of about 40 percent of the generating capacity at its Schahfer Generating Station, in Wheatfield, in 2023.
The utility continues to discuss a "range of options" as to the future of the Bailly Generating Station and the extensive acreage surrounding it, according to NIPSCO spokesman Nick Meyer. One option would be to explore selling the plant to a company that might want to run it and sell the electricity itself.
The plant property also represents one of the largest swaths of Lake Michigan lakefront property in Indiana other than the steel mills and BP refinery, so it could be attractive to some buyers if the generating station were removed.
U.S. Rep. Pete Visclosky, R-Merrillville, has long advocated converting unused industrial properties to public lakefront. That goal is enshrined in the Region's Marquette Greenway Plan.
The Bailly closure would impact about 110 employees working there. The utility has been in discussions with the union about how best to provide other work opportunities within the company for those employees, Meyer said.
The Indiana Utility Regulatory Commission will probably become involved in the Bailly closure at a future date. That's because if NIPSCO wants to collect any costs associated with the shutdown through customer rates, it would have to ask the commission.
There is a small gas-fired generation unit that could stay open at Bailly past the shutdown date for the coal-fired units.
The utility plans to make up for any shortfalls that may occur in electric supply by purchasing power on the open market after Bailly closes. But once the shutdown of two of the main generating units at Schahfer draws closer, the utility will have to consider options such as building its own gas-fired power plant, Meyer said.
NIPSCO calculates it would incur $1 billion in additional costs during the next seven years if it continues to operate its entire fleet of coal-fired generating plants. That cost would arise from complying with new environmental regulations as well as maintenance.
This story has been corrected from an earlier version.