Cost of Federal Power Act Orders for Indiana Coal Plants
On behalf of Earthjustice, Synapse calculated the incremental cost of continuing to operate three coal units in Indiana—Culley 2, Schahfer 17, and Schahfer 18—beyond their planned retirement dates. All three units were scheduled to retire at the end of 2025, but the U.S. Department of Energy issued orders under Section 202(c) of the Federal Power Act requiring the units to continue operating into 2026.
We found that continued operation of the three units under economic commitment practices will result in net costs to the plant owners of $229,000 per day or $20.6 million over the initial 90-day order period. This includes $1.9 million for Culley 2, $9.8 million for Schahfer 17, and $8.9 million for Schahfer 18. If DOE additionally requires the three units to operate under a must-run commitment status (i.e., to remain online at a minimum dispatch level regardless of whether it is economic to do so), net losses would be even higher at $250,000 per day, or $22.5 million over the initial order period. Under either economic or must-run dispatch, costs will likely be passed on to ratepayers in the region—not taxpayers at large.
The estimates above include short-term costs only. If DOE extends the order long-term, we estimate the coal units would require an additional $33.7 million per year in capital expenditures to replace equipment as it wears out and install environmental controls to maintain compliance with environmental regulations.