VECTREN's request for a new power plant denied by IURC (2019)
4/24/19 UPDATE: The Indiana Utility Regulatory Commission rejected Vectren's request to build a new gas-fired power plant, but approved the retrofits to Vectren's existing coal-fired power plants. Below are links to the press releases regarding this decision from CAC and the IURC:
- CAC's press release: https://www.citact.org/energy-policy-utility-rates-and-regulation-issues-utility-vectren/vectren-wants-new-power-plant-and
- IURC's press release: https://www.in.gov/iurc/files/IURC%20Issues%20Order%20in%20Vectren%20South%27s%20Proposed%20Generation%20Plant%20Case%2045052.pdf
On February 20, 2018, Vectren filed a request with the Indiana Utility Regulatory Commission (IURC) to raise your rates nearly $1 BILLION to pay for the construction of an unneeded and oversized gas-fired power plant, and to pay for compliance projects at their obsolete coal-fired power plants.
Specifically, Vectren is asking the IURC permission for:
- $67 MILLION for already completed projects at their coal-fired power plants, most of which they will be retiring soon. If approved, this will cost residential customers $29 per year, beginning in 2019.
- $95 MILLION for projects at the Cully Unit 3 coal-fired power plant. If approved, this will cost residential customers $25 per year by 2023.
- $781 MILLION to build an unneeded and oversized 850 MW gas plant. The annual impact on residential customers is unknown at this time.
It’s difficult to predict exactly what the bill impact will be should the IURC approve the construction of the $781M gas-fired power plant. In testimony filed before the IURC, Vectren acknowledges the “magnitude” of this investment. Vectren’s current electric rates are based on an estimated rate-base of $1.4B. This gas-fired power plant, if approved, will increase Vectren’s electric rate-base by 57%! This is truly an investment of enormous “magnitude”, and one which will clearly have a significant impact on the monthly bills of Vectren’s electric ratepayers.
The amounts above do not include the enormous rate increases approved by the IURC in September 2017 totaling $497.5M for projects related to their transmission and distribution networks and for the mandatory installation of smart meters at the premises of every Vectren customer. A small portion of this amount is currently being collected in rates today, but the majority of that $497.5M will hit the monthly electric bills of Vectren customers over the next 7 years.
Vectren customers can't afford any more rate hikes!
Here’s a breakdown of your current monthly Vectren electric bill before taxes:
|Understanding your current Vectren electric bill
(Based on average usage of 900 kWh per month.)*
|(As of June 8, 2018)||Current Charges and Rates||Total for the Month|
|Base Rates (fixed and do not change without a base rate case being filed)|
|Monthly Fixed Charge||$11.00||$11.00|
|Charge per kWh(flat rate)||$0.091600||$82.44|
|Fuel Charge per kWh||$0.038890||$35.00|
|Variable Production Charge||$0.004750||$4.28|
|Bill Riders, or "trackers" (variable and will change in between rate cases)|
|Fuel Adjustment Clause (FAC)||($0.005734)||($5.16)|
|Energy Efficiency Program Costs and Lost Revenues||$0.007976||$7.18|
|MISO (grid operator) Cost & Revenue Adjustment||$0.003508||$3.16|
|Reliability Cost and Revenue Adjustment||$0.000256||$0.23|
|Grid Modernization Fixed Charge||$0.95||$0.95|
|Grid Modernization Charge per kWh||$0.000339||$0.31|
*Average bill based on Vectren’s current approved electric tariffs which are available here: https://www.vectren.com/information/rates, and represent an average Vectren customer using 900 kWh/per month.
Since 2005 for customers using 1,000kWh per month, Vectren’s average monthly residential electric bill, including taxes, has increased from $88.67 to $153.06, an alarming 73%.
Much of this increase is directly attributable to the fact that Vectren has been and remains almost exclusively reliant on coal. Over this time period, Vectren made the business decision to spend $500M on their coal fleet, rather than diversify their energy portfolio with clean and renewable energy, like solar and wind.
Vectren’s over-reliance on coal and failure to diversify exposed their customers to tremendous risk and has led to excessive rate increases and ultimately, unaffordable monthly electric bills.
Now, Vectren wants to prolong the life of the Culley 3 coal-fired power plant and replace the rest of their coal-fired fleet with an 850MW gas-fired power plant. Once again, putting all their eggs in one basket and exposing their customers to the inherent risk that comes with a lack of a diverse energy portfolio.
Fuel prices fluctuate, regulations change, competition provides price pressures, and supplies face disruptions from things like the markets, pipeline restraints, and weather. Considering all of this put together, continued investments in coal and new investment in gas, aka fossil fuels, are risky and volatile.
In fact, the Office of Utility Consumer Counselor (OUCC), who represents the public in proceedings before the IURC, now recognizes the costs and risks associated with continued investments in fossil fuels.
In testimony recently filed in the current base rate case of Indianapolis Power & Light, the OUCC wrote that “coal-fired generation deployment is uneconomic and that even natural gas fired generation is becoming uneconomical when compared to renewable deployment. The economic viability of those gas fired units is even riskier as battery deployment and technology advances.” 
Vectren should stop throwing good money after bad and begin to transition away from fossil fuels by making meaningful investments in energy efficiency and sustainable and truly clean energy, like solar and wind. Utility-scale solar and wind are now cheaper than coal-fired power plants and are cost-competitive with new gas-fired power plants.
Investments in energy efficiency, and solar and wind power provide local jobs which can’t be outsourced, are far better for our environment and our health, and utilize the inexhaustible and free resources of Indiana sunshine and wind, without polluting our air and water and exposing customers to significant risk.
Please e-mail or write the OUCC to stand up for Vectren customers and oppose Vectren’s request to raise your rates by nearly ONE BILLION DOLLARS!
Read the Fact Sheet
SPEAK OUT! WRITE the OUCC and tell them to stand up for Vectren customers! Indiana Office of Utility Consumer Counselor Attn: Bill Fine Tell the OUCC and the IURC Regulators: Make sure to reference Cause Number 45052 in your comments.
115 W. Washington St. Suite 1500S
Indianapolis, IN 46204
(888) 441-2494 phone
SPEAK OUT! WRITE the OUCC and tell them to stand up for Vectren customers!
Indiana Office of Utility Consumer Counselor
Attn: Bill Fine
Tell the OUCC and the IURC Regulators:
Make sure to reference Cause Number 45052 in your comments.