Indiana approves new gas plants for CenterPoint Energy, groups worry about high bills

The state gave CenterPoint Energy the go-ahead to build two small natural gas plants for more than $330 million. A coalition of groups in southern Indiana worries that will make the utility’s already high rates even higher.

The two plants would serve as a backup for renewable energy sources during times when energy demand is high.

The coalition Energy for All said the plants aren’t needed and that it’s “outrageous” to make residents pay for plants that the utility will hardly ever run.

Tom Bogenschutz is the president of Tri-State Creation Care, a faith group that advocates for the environment. He said it doesn’t make sense for CenterPoint to make a long-term commitment to an energy source that has volatile prices and emits carbon dioxide.

“So we have to pay for these plants. What if natural gas is no longer competitive? What if natural gas ends up being a big loser for us?” Bogenschutz said.

The war in Ukraine has brought natural gas prices to a level that utilities haven't seen in a decade.

“Gas prices are just going up and up and up," said Wendy Bredhold with the Sierra Club's Beyond Coal campaign in Indiana. "It's a risky proposition to build a gas plant in this current era. And renewable energy doesn't require any fuel and so there are no fuel costs — and that's what CenterPoint should be taking a look at.”

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Alyssia Oshodi is the communications manager for CenterPoint Energy. She said the company plans to retire most of its coal and go mostly renewables, but it needs to be able to have power that's easily dispatched.

Even with the war in Ukraine driving up natural gas prices, Oshodi said the company felt this was in the customer's best interest long-term.

“We’ll continue to analyze how those factors will come into play. But I think that this still, from the standpoint of what is the most cost effective option for our customers, is the path to move forward," she said.

Climate advocates say CenterPoint should look into more storage and energy efficiency, instead of natural gas.

It’s not clear yet how much customers’ bills will go up to pay for the gas plants. Originally the company estimated it would cost the average residential customer an extra $23 a month.

CenterPoint hopes to lower the cost of retiring its A.B. Brown coal plant early through a state pilot program. Oshodi said, if that happens, residential customers should see an overall increase of less than $10 a month to pay for the new gas plants.

According to a survey of Indiana residential electric customers in 2020, CenterPoint had the highest rates among Indiana electric utilities.

Contact reporter Rebecca at rthiele@iu.edu or follow her on Twitter at @beckythiele.

Indiana Environmental reporting is supported by the Environmental Resilience Institute, an Indiana University Grand Challenge project developing Indiana-specific projections and informed responses to problems of environmental change.