INDIANAPOLIS, (WLKI) - Northern Indiana Public Service Company is asking federal regulators to approve the recovery of millions of dollars in costs after being ordered by the U.S. Department of Energy to keep two coal-fired generating units operating beyond their planned retirement date.
According to reporting by the Indiana Capital Chronicle, NIPSCO spent $116.7 million between January and March complying with federal emergency orders that required the company to continue operating Units 17 and 18 at the R.M. Schahfer Generating Station in Wheatfield, Indiana. The coal units had been scheduled to retire on December 31 after more than 40 years in service.
The utility has filed with the Federal Energy Regulatory Commission seeking approval to recover about $38 million in quarterly costs through a regional tariff covering customers served by the Midcontinent Independent System Operator, or MISO. That request includes approximately $2.8 million in profit for the company.
NIPSCO says it understands customers are concerned about rising energy bills but notes that federal regulators have established a process allowing utilities to recover costs associated with complying with Department of Energy emergency orders. The company says it remains focused on managing expenses while maintaining reliable electric service.
The federal orders were first issued in late December by U.S. Energy Secretary Chris Wright under authority granted by the Federal Power Act. Additional 90-day extensions issued in March and June have kept the units online through at least September 19.
While one of the units generated revenue during part of the first quarter, both units are now out of service for repairs. Unit 17 entered a planned maintenance outage in March and is expected to remain offline until October. Unit 18 has been out of service for more than a year following a turbine failure and requires extensive repairs before it can return to operation, which NIPSCO estimates could happen in December.
The utility told federal regulators that restoring Unit 18 will require significant investments in turbine, generator, coal-handling and cooling systems. NIPSCO also indicated it is preparing to continue operating the coal units through late 2028 or early 2029 if future federal orders require it.
In a separate development this week, the Indiana Utility Regulatory Commission unanimously rejected NIPSCO's proposed $741 million five-year natural gas infrastructure improvement plan.
The commission ruled that the utility failed to provide sufficient evidence showing that the proposed projects were cost-justified. Regulators cited a recent Indiana Supreme Court decision that raised the standard utilities must meet when seeking approval for infrastructure cost recovery.
NIPSCO says it is reviewing the commission's order and considering its next steps, while maintaining its commitment to providing safe and reliable service to customers.