(Michigan City, IN) - NIPSCO has agreed to look into the possibility of keeping its power generating station open in Michigan City as part of a settlement involving the utility’s contested request for an electric rate increase.
The La Porte County Commissioners on Wednesday approved the deal, which has already been signed by Erin Whitehead, Director of Regulatory and Major Accounts at NIPSCO. La Porte County was the only government agency to join the rate hike challenge, which was also appealed by U.S. Steel and Walmart.
Under the agreement with La Porte County, NIPSCO has agreed to a six-month study for the potential of converting the coal fired generating station near the lakefront, along U.S. 12, into one fueled by cleaner burning natural gas.
For several years, NIPSCO has been planning to close the generation station as early as 2028 as part of its plan to rely more on supplying electricity from the wind and sun.
Under the agreement, the utility will also look at converting the generating station into a facility that stores electricity in batteries for release to power customers as needed. NIPSCO is also committed, under the agreement, to study the possibility of building a generating station fueled by natural gas at another location in La Porte County if the utility closes its Michigan City power plant.
Attorney Shaw Friedman, who represented the La Porte County Commissioners in the case, said keeping NIPSCO active in generating power in the county, would help retain jobs, and the $5 million in local property taxes currently paid by the utility.
“Those who pay NIPSCO rates should receive the benefit of the jobs and tax revenues from any new generating facility,” he said.
NIPSCO also agreed to spend up to $5 million on additional electric infrastructure for any site in La Porte County to assist with economic development. The utility will extend a commitment to spend $3.5 million on more electric infrastructure through 2030, to help with any new manufacturing or solar farm developments at Kingsbury Industrial Park. Friedman said that pledge was secured in 2019, and is scheduled to expire next year. In exchange, La Porte County will no longer be one of the parties appealing the rate hike still before the Indiana Utility Regulatory Commission.
Friedman was hired in early December by the commissioners, who expressed concerns about the ability of many residents already strained by inflation to afford the higher rate NIPSCO is seeking. NIPSCO is pursuing a 22 percent increase in electric rates.
NIPSCO says the increase is needed to pay the roughly $2 billion cost of transitioning to renewable energy, and more than $760 million for upgrades in its electric transmission and distribution systems. It also includes other improvements schedule to be completed by the end of this year.
Friedman said he negotiated the settlement due to a belief NIPSCO will get a reduced, but still double digit percentage rate hike, and desire to get La Porte County something in return. Commissioner Steve Holifield said he believes NIPSCO has a renewed interest now to keep generating at least some of its electricity with fossil fuels.
Holifield said federal dollars for renewable energy production may be at risk, as it was allocated under the previous administration. President Donald Trump’s longstanding opposition to renewable energy claims we are relying too heavily on power from wind and solar.
“It appears to me they (NIPSCO) don’t have a second plan in place,” he said.
