A nearly $800 million proposal by Vectren South in Evansville has been shot down. The Indiana Utility Regulatory Commission has issued an order unanimously denying the utility’s plan to build a natural gas-fired generation plant in Posey County. The commission said it was not convinced that "the utility’s proposal would allow it flexibility and optionality."
Vectren first announced plans for the facility in February 2018. The following August, the Indiana Office of Utility Consumer Counselor recommended a denial of the plan by the IURC because it had not fully evaluated all viable options for meeting the needs of its customers.
In the order issued Wednesday, the IURC said, "The proposed large scale single resource investment for a utility of Vectren South’s size does not present an outcome which reasonably minimizes the potential risk that customers could sometime in the future be saddled with an uneconomic investment or serve to foster utility and customer flexibility in an environment of rapid technological innovation.”
The plant would have been built at the site of the existing A.B. Brown power plant in Posey County.
"We are hard pressed to see how reliance on one facility for so much of the Vectren South system requirements is consistent with maintaining flexibility to respond to changing market conditions and technological change," the commission said in the order.
Vectren was acquired by Houston-based CenterPoint Energy Inc. (NYSE: CNP) earlier this year in a $6 billion deal. The utility released a statement Wednesday regarding the order.
"We appreciate the IURC’s continued thorough review of our electric generation transition plan," said Lynnae Wilson, chief business officer for Indiana electric at Vectren. "As we demonstrated in our case, economic and reliability factors are driving a transition from coal-based generation and the selection of replacement resources will continue to be our focus. The case was filed at a time of significant changes in generation technology. While a large generation resource offered significant economic efficiencies, the IURC has directed us to increase our focus on the benefits of a more diverse resource mix. We look forward to continuing to discuss with the IURC investment alternatives to provide our customers affordable, reliable and balanced energy."
The IURC, however, did approve Vectren South’s plans to retrofit one of its coal-fired units at the F.B. Culley plant in Warrick County in order to stay in compliance with U.S. Environmental Protection Agency standards related to coal ash and wastewater handling. The effort was estimated to cost $95 million.