JASPER COUNTY — Rows of solar panels and towering wind turbines are rising out of corn and bean fields across Indiana as NIPSCO makes one of the biggest transitions in its history.
The Merrillville-based utility, which was formed in 1912, is building 14 new solar and wind facilities across Indiana and Kentucky to replace the coal-fired plants it’s retiring in Wheatfield and Michigan City. It's the biggest shift in how NIPSCO has generated power for homes, businesses and steel mills across Northern Indiana since technological advances first allowed it to build the massive power plants it now operates.
Like utilities around the country, NIPSCO built huge, industrial-scale power plants in the 1960s and 1970s. Now, like utilities around the country, it's switching to a decentralized network of wind and solar farms that spread out the energy production. Its future energy mix will be supplemented by battery storage, natural gas and electricity purchased off the grid to ensure reliability for when it isn't sunny or windy out.
"Technology evolves. We evolve with it," NIPSCO President Mike Hooper said. "For customers, it will mean a combination of lower overall costs in the long term as well as environmental benefits. We're reducing our carbon footprint."
It's part of a national trend that's driving down the cost of renewable energy and will likely greatly diminish the production of coal and other carbon-emitting fossil fuels. American Clean Power estimates utilities have announced $348 billion in new renewable energy facilities that will generate 234,630 megawatts around the country.
Collectively, the projects are expected to save consumers $4.4 billion in their electrical bills as the utilities will no longer pass on the cost of the input fuels.
NextEra Energy Resources, one of the world’s largest developers of renewable energy, recently completed construction of NIPSCO's new 265 MW Dunns Bridge I Solar Project in Jasper County and has commenced construction on started construction of the 435 MW Dunns Bridge II in Starke and Jasper Counties.
About 435 construction workers were at the site building the massive solar farm south of the Kankakee River that will stretch seven miles from east to west and four miles from north to south once complete. NextEra Energy Resources is touting it as a $1 billion investment.
It will be one of the largest solar farms in the country, powering 42,500 homes, NIPSCO Communications Manager Tara McElmurry said.
NIPSCO also recently partnered with Houston-based EDP Renewables North America to build the 200-megawatt Indiana Crossroads Solar Farm in White County, which will generate enough power for 38,000 homes. It built the 102 MW Rosewater Wind Farm in White County and the 400 MW Jordan Creek Wind Farm in Benton and Warren Counties.
It's also planning the 200 MW Green River Solar Farm in Breckinridge and Meade Counties in Kentucky, the 200 MW Cavalry Solar Farm in White County, the 200 MW Gibson Solar Farm in Gibson County, and the 250 MW Fairbanks Solar Farm in Sullivan County.
All in all, it will have eight solar farms and six wind farms. The wind produces more energy over the course of a year while the solar is more reliable and predictable on a day-to-day level. But they're designed to be complimentary as it's often not windy on warm, sunny summer days in Indiana while winds tend to pick up when it's cloudy or overcast.
"It's a good balancing act," NiSource Director of Portfolio Planning & Origination Andy Campbell said.
NIPSCO also plans to invest $640 million in a natural gas peaker at the R.M. Schahfer Generating Station in Wheatfield that would supplement the wind and solar panels, such as by supplying electricity when it's dark or not windy out.
Renewables have many benefits but can be intermittent, Hooper said.
"You have to consider there's going to be a lower capacity output on some days," he said. "We're going to have more nameplate megawatts of renewable energy generation compared to a coal plant. We will have more than 1,000 megawatts of gas capacity when we come out the other side in this.
NIPSCO is taking advances of 40% capital tax credits on solar and 50% on wind, Hooper said.
"That helps reduce the overall capital costs that consumers end up paying for these assets," Hooper said. "They ultimately have these assets over the long term. When you apply the offsets of excess energy sales and the renewable energy certificate sales, pass those back to the customers, you're really starting to provide good value for a generational asset and doing it at a good cost over the long term. You're able to offset a lot of those initial costs with tax equity partners and tax credits we're able to monetize."
NIPSCO also sought to reduce capital expenses by building the Dunns Bridge solar farm near its Wheatfield plant, which already hooks into high-voltage transmission lines connected to the electric grid.
"The transmission costs can be significant," he said. "The fact that this is well-situated keeps the costs down."
NIPSCO is well-situated to be able to make the energy transition, Hooper said.
"We are in a very strong position from a transition perspective," Hooper said. "The NIPSCO service territory is primarily located at the southern tip of Lake Michigan. There's a lot of transmission assets that don't go over Lake Michigan. They go under Lake Michigan. Indiana is the Crossroads of America. We're also the crossroads of a lot of long-line electric transmission lines and for that matter underground gas transmission. It gives us really strong grid support. A utility out on the edge of the grid wouldn't have as many options around transmission. Perhaps their portfolio wouldn't support such a high penetration of renewables."
Other utilities are not in such a good position to make the switch, he said.
"There's no blanket way to say that a utility should have 20%, 50% or 100% renewables," he said. "It really is up to the individual utility. Our situation from a physical standpoint allows us to have a high penetration of renewables."
Environmental groups like the Citizens Action Coalition have faulted NIPSCO for taking too long to transition, blaming recent rate hikes on volatility in commodity prices and its reliance on older fossil fuel-powered power plants that have had unexpected outages, forcing it to buy more electricity from the grid. NIPSCO recently pursued two rate hikes and a fuel adjustment clause tracker.
Consumers have voiced frustration at the recent rate hikes.
"For the first three seasons, the average gas demand was 810 therms and the average cost was $550. For the last two years, the average demand has been 780 therms but the average cost has been $810," Schererville resident John Orfe said. "So, despite using 4% less gas there has been a 47% increase in revenue to NIPSCO."
NIPSCO hopes to save customers money in the long run by switching to renewables, Hooper said.
"Our economic analysis found that even though you needed to build more nameplate megawatts of renewables to replace the same amount of energy there was still a financial advantage for our customers," he said.
