Braun Urges IURC to Reject AES Indiana's Coal-to-Gas Conversion Over Reliability Concerns

Senator Mike Braun (R-IN) has submitted a letter to the Indiana Utility Regulatory Commission, urging them to reject AES Indiana's petition to repower Petersburg Generating Station's Units 3 and 4.

AES Indiana’s proposal involves converting Petersburg Units 3 and 4 from coal to natural gas. If approved, the utility aims to complete the conversion by the end of 2026, positioning itself as the first investor-owned electric utility in Indiana to stop burning coal entirely. The utility projects that the conversion will save customers approximately $280 million over 20 years and reduce carbon emissions by 43%. In its integrated resource plan (IRP) submitted in December 2022, AES Indiana proposed the coal-to-gas conversion as part of its preferred energy portfolio, projecting that natural gas would account for approximately 70% of its energy mix once the project is complete.

Despite the economic and environmental benefits AES claims, Braun raised concerns that this transition could jeopardize Indiana's grid reliability, particularly given the increasing demand for energy and the tight reserve margins in the Midcontinent Independent System Operator (MISO) marketplace. The letter points out that AES’s plan, which involves significant ratepayer investment, would prematurely shutter a compliant coal facility without adding new capacity to the grid. He emphasized the need to keep coal plants operational as long as possible, particularly since the federal regulatory landscape regarding carbon emissions remains uncertain.

Braun advocated for a balanced approach that includes coal, natural gas, nuclear, and renewable energy to ensure reliability and meet future energy needs. As a candidate for Indiana Governor, Braun has previously voiced his intent, if elected, to appoint IURC members who align with his views on Indiana's energy future.

In addition to Senator Braun's letter opposing AES Indiana's plan, Reliable Energy, Inc., an association of coal suppliers, has filed a petition requesting the Commission reopen the record in the proceeding. Reliable Energy argues that new evidence has surfaced, contradicting previous testimony provided by AES Indiana. The evidence, related to AES’s capacity needs, suggests that AES may require up to 3,000 MW of additional capacity within 18 months, far exceeding the 200 MW originally stated by AES in its testimony. Reliable Energy contends that this discrepancy warrants further examination before the Commission makes a final decision. Under Indiana law, the Commission is required to issue a decision on AES Indiana's petition within 240 days of the filing, with an anticipated ruling in early November.