Duke makes deal to shut coal-fired capacity at Wabash River plant

A coalition of Indiana environmental and citizens groups including the Sierra Club, Citizens Action Coalition, Valley Watch, and Save the Valley announced Aug. 30 a legal settlement that requires Duke Energy Indiana to cease burning coal at most of its Wabash River coal-fired power plant and to invest in new renewable energy projects.

Under the settlement, Duke Energy will retire Units 2, 3, 4, and 5 at Wabash River and will also stop burning coal at Wabash River unit 6 by June 1, 2018. A total of 668 MW of coal-fired power will come offline as a part of this agreement. 

Duke Energy also agreed to pursue either a new feed-in tariff program to purchase at least 30 MW of solar power from its Indiana customers or to purchase or install at least 15 MW of wind or solar capacity from new facilities built in Indiana.

“While today’s settlement is a step in the right direction, more must be done to ensure that Hoosier families are protected from rising energy bills and the enormous health threats posed by Indiana’s reliance on coal-fired power plants,” said Jodi Perras, Indiana campaign representative for the Sierra Club’s Beyond Coal campaign.

The settlement ends an appeal of a Title V air pollution permit issued by the Indiana Department of Environmental Management for Duke’s Edwardsport coal-gasification and combined-cycle power plant. It does not end the parties’ parallel case before the Indiana Court of Appeals to overturn Indiana Utility Regulatory Commission (IURC) decisions regarding the Edwardsport plant, which is more than $1.6bn over budget and still not operating at full capacity after eight years of design, construction, and testing, the groups noted. 

“Citizens Action Coalition is certainly pleased that Duke has committed to permanently moth-balling a dirty coal-fired power plant. However, we and our allies will remain diligent in continuing our fight against the scandal-ridden Edwardsport IGCC power plant. Ratepayers should not be forced to pay one more penny for that fiasco,” said Kerwin Olson, executive director of Citizens Action Coalition.

The Wabash River part of the deal holds little that is new

The retirement of Wabash River Units 2-5 is no surprise, since it was already in Duke’s plans. Duke has also been considering whether to shut Wabash River Unit 6 or convert it to natural gas, which would still be an option under the new agreement with the environmental groups.

Duke Energy Indiana said in its own Aug. 30 statement that prior to the settlement, the company had announced it planned to retire four, 1950s-vintage units totaling 350 MW at the Wabash River station by the 2015 federal Mercury and Air Toxics Standards (MATS) deadline. In the agreement, the company agrees to complete the retirements by the compliance deadline or, if MATS is vacated or delayed, by June 1, 2018, whichever occurs first. Duke noted it has been exploring a gas conversion at Unit 6. The new 2018 deadline will not prevent Duke Energy from converting the unit to natural gas earlier.

“We’re glad to resolve these issues. Our new, cleaner Edwardsport plant modernizes our fleet and enables us to retire older, coal-fired generation,” said Duke Energy Indiana President Doug Esamann. “The new plant replaces the old Edwardsport units, which date back to the 1940s and 1950s and were retired in 2011. In addition, we retired two older units at our southern Indiana Gallagher plant in 2012.”

The settlement also includes a commitment to pursue additional green energy sources. The company has the option to either implement a 30-MW “feed-in tariff” for solar photovoltaic energy or construct/contract for 15 MW of wind and/or solar generation.

If the company pursues the second green energy option, Duke Energy also would retire two 40- to 45-year-old oil-fired peaking stations – the Miami Wabash and Connersville units – totaling about 166 MW by June 1, 2018. These smaller units are used occasionally during times of high power demand.

If this option is pursued, Wabash River Units 2 through 5 must be retired by the 2015 MATS compliance deadline or by June 1, 2017, whichever occurs first.

The IURC on April 3 approved a Phase 2 environmental compliance plan for Duke Energy Indiana that includes both coal unit retrofits and retirements. In June 2012, Duke Energy Indiana, a unit of Duke Energy (NYSE: DUK), filed its petition for a certificate of public convenience and necessity (CPCN) to use clean coal technology to allow Duke to reduce air emissions from its existing coal-fired steam electric units.

The approved plan covers:

  • Cayuga Unit 1 – Selective catalytic reduction (SCR), dry sorbent injection (DSI), ACI, arsenic mitigation system, mercury re-emission chemical injection system, in-service by December 2014;
  • Cayuga Unit 2 – SCR, DSI, ACI, arsenic mitigation system, mercury re-emission chemical injection system, in-service by June 2015;
  • Gibson Station Unit 1 – mercury re-emission chemical injection system, in-service by November 2014;
  • Gibson Station Unit 2 – mercury re-emission chemical injection system, in-service by December 2014;
  • Gibson Unit 3 – mercury re-emission chemical injection system, in-service by December 2014;
  • Gibson Unit 5 – ACI, mercury re-emission chemical injection system, in-service by May 2015;
  • Wabash River Units 2, 3, 4 and 5 – retirement by April 2015.
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.