Lansing, Mich.—Sierra Club has filed a settlement agreement with Indiana Michigan Power Co. (I&M), and other parties, before the Michigan Public Service Commission as part of the utility’s 20-year plan for how it will provide power to local communities. I&M, a subsidiary of American Electric Power, is an investor-owned utility that serves 597,000 customers in northwest Indiana and 130,000 in southwest Michigan.
Under the settlement agreement, I&M must file its next Integrated Resources Plan (IRP) with the Michigan Commission by December 2021. The clean energy-related benefits of the settlement include:
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I&M must seek pre-approval from the Michigan Public Service Commission to renew its lease on the 1300-megawatt Rockport Unit 2—one-half of a “Super Polluter” coal plant located in Southwest Indiana. The lease is currently set to expire in December 2022.
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As part of the upcoming IRP, I&M is required to analyze the economics of its contract with the Ohio Valley Electric Corporation, which owns and operates the outdated Kyger Creek and Clifty Creek coal-burning plants located in Ohio and Indiana. If the analysis shows that other resources are more affordable for customers, I&M would have an obligation to take steps to end its OVEC contract.
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I&M is also required to issue an all-source request for proposals for new energy resources, and to include the cost data received from bidders in its IRP planning. All-source RFPs ensure that clean energy gets a fair chance to compete against the utility's own fossil fuel sources.
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I&M will implement an expanded stakeholder process to facilitate Michigan customers having input on the utility’s long-range plans. This is an improvement over I&M’s existing IRP process that allows only Indiana customers to have input on its resource plans.
“We are proud to announce this important settlement agreement, ensuring ratepayer protection and moving the Midwest one step closer to cleaner air,” said Mike Berkowitz, Sierra Club’s Beyond Coal campaign representative for Michigan. "Michigan customers should not be contributing to polluting, outdated, financially failing coal plants in Indiana and Ohio. Sierra Club looks forward to engaging in the upcoming energy resource planning process to ensure a transition to clean, affordable energy for Michigan customers.”
Wendy Bredhold, senior campaign representative for Beyond Coal in Indiana, added, “If Indiana Michigan Power is committed to 'transforming its generation fleet' for a 'sustainable future' as it claims, it can't retreat from its promise to stop burning coal at Rockport, one of the biggest and most-polluting coal-burning power plants in the country. I&M's Indiana customers have made clear they want their utility to transition away from dirty and expensive fossil fuels, including by ending its lease with Rockport 2 when the current arrangement expires in December 2022.
“This settlement’s requirement that I&M must get the Michigan PSC’s pre-approval to extend its lease at Rockport is a needed check on I&M’s decision making. Sierra Club looks forward to helping ensure that I&M prioritizes public health and stops polluting our communities and climate by transitioning to affordable, clean energy in its next resource plan.”
Rockport Unit 2 is owned by five wealthy out-of-state corporations and big banks that get huge tax breaks on this Super Polluter: General Electric, Verizon, JP Morgan, Citigroup and tobacco giant Philip Morris. I&M operates Unit 2 under a lease that expires in December 2022.
In 2019, I&M’s parent company AEP Corp., committed to retire Rockport Unit 1 by December 2028 under a legal agreement signed by a federal judge. Parties in the case included the U.S. Environmental Protection Agency, U.S. Department of Justice, several eastern seaboard states, Sierra Club and other environmental and consumer advocates. Rockport 1, also 1,300 MW, is the largest single coal-burning unit to announce retirement since Sierra Club began its Beyond Coal Campaign in 2010.
A Center for Public Integrity-USA Today-Weather Channel investigation identified Rockport as one of the nation’s 22 “Super Polluters”—and one of four near Evansville, Ind., which has more industrial toxic pollution than any other midsize or large city in America. In 2014, Rockport was the nation’s No. 6 carbon polluter and second most toxic power plant in Indiana.
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with more than 3.5 million members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.