Vectren Corp. has backed away from plans to build a 100 megawatt natural gas-fired electric generating plant in Gibson County.
Instead, the company said Friday it will buy as much as 100 megawatts of electricity from Sempra Energy, a San Diego company. The new contract eliminates the need to build the power plant, which Vectren had first spoken publicly about in January.
Vectren is looking for extra electricity because it soon won't be able to buy 100 megawatts from a Vermillion County, Ind., power plant. A contract that had cemented that arrangement will expire in 2009.
"Our electric service area continues to experience moderate growth, and the need for additional power was coming quickly, given an existing 100-megawatt-purchase agreement was set to expire in 2009," said Ron Jochum, Vectren vice president of power supply. "This (new) contract allows us to delay the need to build new generation while meeting the peak needs of our Southwestern Indiana customers."
Vectren's proposed plant would have stood on 55 acres southeast of the Toyota plant near Princeton, Ind., and would have cost about $80 million to build.
The power generated there would have only been used at times of peak energy use, such as when many customers are running their air conditioners. Vectren had asked the Indiana Regulatory Commission to approve the plant and was waiting for a permit when it decided to cancel its plans.
Meanwhile, Vectren had been asking other companies if they would sell the needed 100 megawatts. It met little success until Sempra stepped forward.
The new contract with Sempra will last from 2010 to 2012. After it expires, Vectren will once again have to consider how to compensate for the loss of the 100 megawatts. Once again the possible solutions will include building a power plant, said Chase Kelley, Vectren spokeswoman.
Vectren also is seeking the approval of Indiana regulators for several programs meant to lower the demand for electricity. Those will include additional rebates used to encourage customers to buy energy-efficient appliances.
In total, Vectren can generate 1,295 megawatts of electricity by burning coal or natural gas. About 30 megawatts can be produced by wind turbine while an additional 100 megawatts can be supplied by a separate utility company.
Vectren, headquartered in Evansville, sells gas and electricity to more than one million customers in Indiana and Ohio.