Dive Brief:

The Northern Indiana Public Service Company (NIPSCO) announced on Oct. 1 a request for proposals (RFP) for 300 MW of wind, 2,300 MW of solar and solar-plus-storage projects, as well as an undefined amount for other capacity resources.

NIPSCO seeks to retire the bulk of its coal generation capacity by 2023, and its October 2018 Integrated Resource Plan identified cheaper alternatives in renewables paired with storage. The IRP is divided into three segments in order to compare resource prices.

NIPSCO expects the prices to be as or more competitive than the 800 MW RFP results for three wind projects earlier this year. "The driver behind initiating this next RFP [is] to go back to the market and test ... to make sure that it's consistent with what we've previously seen," Nick Meyer, NIPSCO spokesperson, told Utility Dive.

Dive Insight:

The investor-owned utility is leading a rapid transition away from coal assets, but lobbying and advocacy efforts in the state are expected to continue attempting to protect aging coal infrastructure, despite the defeat of a moratorium on new electric generation during Indiana's legislative session this April.

"The bigger underlying concern in our state is just, with an RFP of this size and a transition that's this rapid ... could lead to some pushback when it comes to what lawmakers or policymakers might consider," Ben Inskeep, senior energy policy analyst at EQ Research, told Utility Dive.

Besides the moratorium on new generation, other policies discussed last legislative session "what's going to happen with our coal resources and if there might be some attempt to bail out some of them or to provide a subsidy to ... continue to operate [the plants] past their cost-effective lives," he said.

Last year, NIPSCO filed an IRP to replace all its coal infrastructure by 2028 with more economic resources including solar, wind and natural gas ultimately projected to save customers $4 billion through 2037 and drawing strong stakeholder support.

"We did see some activity in this past legislative session, but at this point, our plan continues to move forward," Meyer said.

Last year's IRP showed projected prices for solar and wind ranging from $27/MWh to $40/MWh, less than half of the costs to operate NIPSCO's existing coal fleet, which ranged from $57/MWh to $82/MWh.

The utility modeled hundreds of scenarios, including some requested by the Indiana Coal Council, which included more favorable prices for coal, higher prices for natural gas and no need for further investments in environmental compliance at two of NIPSCO's largest units. The IRP still found a renewable energy path was about $900 million cheaper in the next two decades.

Despite this, coal advocates continue to say a favorable federal regulatory agenda would make coal plants more competitive. Scott Pruitt, the former head of the Environmental Protections Administration, registered as a lobbyist in Indiana this year on behalf of the parent company of Sunrise Coal, the second largest coal company in the state, drawing on his expertise of the Trump administration's goals for rolling back environmental regulations that could benefit carbon-emitting plants.

The Indiana Coal Council, the Energy Policy Network and other coal advocacy groups that intervened last year in NIPSCO's IRP process did not respond to requests for comment. "Here in Indiana, a lot of the solar procurement we're going to see over the next decade is going to be driven by these Integrated Resource Plans," Inskeep said. The new RFP is focused on solar and solar-plus-batteries, but it requests bids for other resources as well. NIPSCO awarded its bids last year to wind projects, based on existing federal policy. "We moved more quickly on some of these wind projects particularly [because of] the tax incentives and other siting items," Meyer said. This month's RFP also includes 300 MW of wind and wind-plus-storage, and an unnamed amount of thermal generation, "fossil facilities, system power options and other resources," according to the RFP notice. NIPSCO's latest request to avoid so many RFPs "puts the pressure on the [state's] other four investor owned utilities to really demonstrate whether or not their existing coal plants are cost effective, and whether or not they could save ratepayers a lot of money by switching to the cleaner generation," Inskeep added. NIPSCO is not alone in the state's transition away from coal infrastructure. Vectren, the smallest investor-owned utility in the state, had already started a process to replace aging coal infrastructure in southern Indiana. However, in April, regulators rejected their proposal to replace that capacity with a large combined cycle natural gas plant.

The RFP will close Nov. 20. Bid evaluation is expected to wrap up on Jan. 10, 2020.