NIPSCO Seeks Approval for a $644M Gas Peaker Plant
Northern Indiana Public Service Company (NIPSCO) has submitted plans for a $644 million natural gas peaker facility at its R.M. Schahfer Generating Station in Wheatfield, Indiana. The project aims to enhance system reliability during peak customer usage and extreme weather conditions. "Peaking resources are critical for ensuring system reliability and public safety, especially during peak customer usage periods and extreme weather conditions throughout the summer and winter months," said NIPSCO spokeswoman Tara McElmurry in an interview with the Northwest Indiana Times. She added that the peaker would operate only when necessary and has the flexibility to transition from natural gas to zero-carbon fuels like hydrogen in the future.
According to NIPSCO's Integrated Resource Plans (IRPs) from 2018 and 2021, the company aims to retire 75% of its coal-fired generation by 2023 and 100% by 2028. These retirements will largely be replaced by wind, solar, and energy storage projects. Several renewable projects have already received approval, and some are operational. However, some projects have been terminated or are at risk due to various challenges, including economic factors and permitting issues.
Earlier this year, NIPSCO conducted a comprehensive portfolio analysis to optimize its energy mix. The analysis focused on evaluating the technical and economic feasibility of various energy resources, including natural gas, wind, solar, and energy storage. This assessment was crucial for identifying gaps in the energy supply chain and determining the need for flexible thermal generation options, such as the proposed natural gas peaker plant. To further refine its resource planning, NIPSCO issued a pair of Requests for Proposals (RFPs) in August 2022. These RFPs aimed to solicit bids for alternative energy solutions that could meet the utility's identified capacity needs and included an evaluation of natural gas peaker options.
The proposed 400-megawatt natural gas peaker facility is slated to replace two soon-to-be-retired gas peaker units at the R.M. Schahfer Generating Station and is expected to be operational by the end of 2026. NIPSCO is currently awaiting approval from the Commission and anticipates a decision by May 2024. Regarding the financial impact, the company estimates that the project will result in a $1.25 per month increase for residential customers using an average of 668 kWh.