Big Coal Hits Speed Bumps As Utility Companies Prepare To Shift Toward Gas And Green Energy

Chris White | Energy Reporter

Midwestern state utilities are shifting away from coal power and toward less expensive forms of energy, despite President Donald Trump’s promises to eliminate regulations to help the moribund industry.

Northern Indiana Public Service is planning to retire five coal-powered plants within the decade and begin shifting to other forms of energy, in particular solar and wind power, as well as natural gas. The move will reduce costs for 470,000 customers by as much as $4 billion over 30 years.

NiSource, the company behind Northern Indiana Public Service, believes the shift to cheaper forms of power is inevitable. “We’ll continue to see renewables and other technology become more cost competitive,” Joe Hamrock, NiSource’s chief executive, told The Wall Street Journal Wednesday. “There’s recognition that the market is changing in a fundamental and permanent way.”

The transition will have dramatic short-term costs. It will require raising average rates by as much as $11 a month, mostly because of expenses associated with closing the plants. Northern Indiana Public Service is not the only utility company making the shift. (RELATED: Analysts Expect US Coal Exports To Continue Surging In 2018)

FILE PHOTO – A North Korean man sits beside a pile of coal on the bank of the Yalu River in the North Korean town of Sinuiju December 16, 2006. REUTERS/Adam Dean/File Photo

Xcel Energy said in December 2018 that it will move entirely to carbon-free power generation by 2050. The company, which covers parts of Colorado and six other states, says that coal could account for about 10 percent of its overall power mix by 2030. It was more than one-third of the mix in 2017.

Domestic coal consumption in 2018 fell to 691 million tons, the lowest level since 1979, according to the Energy Information Administration (EIA). The agency expects it to continue dropping in 2019. It also predicted in September that U.S. coal exports will surge 10 percent in 2019 above 2017. Coal exports were up 32 percent in the first half of 2018 compared to the same time the previous year.

Coal’s woes will likely weigh heavy on the Trump administration, which staked much of its reputation on bringing back the ancient fuel source. During Trump’s first year in office, coal exports surged 61 percent, largely thanks to demand in Asia where economic growth increased the amount of coal countries needed to fuel their economies.

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