A Special NIPSCO Edition of Our ED Impact News
Future-Focused Energy - Reliable, Cleaner and Greater Savings
In late 2018 NIPSCO announced our long term strategy for delivering safe, reliable and affordable electric power to our customers for decades to come.
Our plan, called Your Energy, Your Future, is a balanced, gradual and orderly transition to retire some of our coal-fired generating units by 2023 – and all of them by 2028 – and to begin adding lower-cost, cleaner energy sources, including wind, solar and battery storage technology.
We envision an even brighter future for Northern Indiana in three key ways:
- Delivering the best cost, most balanced and reliable energy to meet our customers’ needs
- Reducing emissions to improve our environment
- Focusing on the long-term strength of our local economy
For Our Customers
- More than $4 billion in cost savings over the long term by retiring costly and aging facilities and adding lower-cost options
- A diverse energy mix that provides reliable energy for customers
For The Environment
- 90% lower carbon emissions by 2028 as a result of the current transition plan
- Continued support for customers who generate their own electricity from renewable sources such as wind and solar
For The Economy
- Cleaner, lower-cost energy to help save Indiana’s businesses and families money, making our region more economically competitive
- Stronger, better future-forward balance of renewable energy to make our state more attractive to employers and residents
- Increased economic development and investment associated with the installation of renewable energy technologies
- Potential for retraining and workforce development opportunities in renewable energy
How we got here
Our decision to begin a decade-long transition to a more balanced and diversified generation portfolio was driven by economics and firmly grounded in affordability and reliability for customers. Every two years NIPSCO puts together an Integrated Resource Plan (IRP), which is a comprehensive analysis of our future energy mix. For the 2018 IRP, we did something different.
Through a request for proposal (RFP), we received project proposals and costs from actual developers, rather than relying on industry forecasts and projections. Proposals included options where NIPSCO could purchase the energy generated, partner with others in a joint venture or take full ownership of the generation project.
Results showed that for our particular need, renewable energy sources were lowest-cost, even lower than natural gas-fired generation. The most competitive were about half the cost of our current coal fired generation fleet. And while there is a relatively lower upfront capital cost for new natural gas resources, the ultimate savings from renewables are considerable, thanks in part to lower fuel costs (i.e. “zero”) as well as reduced operating and maintenance expenses, when compared to coal and natural gas. Influence from federal production and investment tax credits also plays a role.
Core to our plan is reliability
Reliability is critical, and that’s why we’re making an orderly transition in our generation mix. While renewable energy is considered an intermittent source of energy, we’re confident in the plan’s ability to maintain reliable service for our customers. We intend to supplement our current generation portfolio, which includes baseload natural gas-fired electric generation, with these renewable sources. We’re also planning a number of important transmission system upgrades.
Additional reliability comes from our unique physical geography, along with our connectivity to the Midcontinent Independent System Operator (MISO). The vast MISO energy network reaches from Manitoba to Louisiana and monitors and manages the state of the electric grid every 30 seconds, maximizing use of the system and its energy as power demands fluctuate. This results in reliable energy at a reduced cost.
Affordability is key
It’s our obligation to focus on affordability for our customers. As we examined the landscape for electric generation, we saw it had changed dramatically over the last decade – not just for NIPSCO, but for the industry as a whole.
Our coal-fired generating stations have aged and gotten more expensive to maintain and operate. They struggle to compete with technological advances that have made abundant, low-priced supplies of natural gas available. Meanwhile, renewable technologies have improved immensely, and their pricing has become much more competitive.
Looking to the future
As we begin implementation of Your Energy, Your Future, we continue to look for new, emerging technologies that may enhance our energy portfolio and ensure a stronger, more future-forward balance of renewable energy.
Currently our focus is to incorporate more renewable wind and solar energy into our mix. As a result of our first RFP, we recently announced three Indiana-based wind projects that would add about 800 MW to our approximate 2,900 MW electric portfolio. We anticipate another RFP will go out later this year to continue diversifying our energy mix.
Adopting cleaner, lower-cost energy will help save Indiana’s businesses and families money, making our region and Indiana more competitive. The installation of renewable energy technologies, along with the extensive potential for retraining and workforce development opportunities, will help provide increased economic development and investment in northern Indiana.
We now stand at the crossroads of the future. Learn more about Your Energy, Your Future at NIPSCO.com/future and read our latest IRP at NIPSCO.com/IRP.
