The estimated $900 million natural gas plant in Posey County will have 800 to 900 megawatts, and the $70 million to $75 million solar plant at an unannounced site will have 50 megawatts. It is to have 150,000 panels on nearly 300 acres.
Vectren intends to retire three of its coal fired plants and exit joint ownership of a Warrick County facility with Alcoa by 2023, when the natural gas plant begins service. The utility is seeking approval from the Indiana Utility Regulatory Commission to build the plant.
Vectren employees would operate the natural gas facility. The company is finalizing negotiation with an entity to run the solar farm, which is to start production by 2020.
Chairman, President and CEO Carl Chapman said if the projects are approved, Vectren's carbon emissions will decrease 60 percent in the future.
"This decade-long generation portfolio transition will meet growing demand to provide cleaner energy for our region while maintaining the reliability our customers deserve and have come to expect," Chapman said.
Vectren also is exploring options related to closing ash ponds, complaint with federal EPA standards, Chapman said Tuesday.
The utility since 2009 has recycled nearly all dry fly ash, rather than putting it in a pond, shipping it by barge to Missouri where it is used to make cement. Vectren wants a similar solution for ash in ponds.
"We believe that beneficial re-use of the ash is a better option if we can reach an agreement with the company that currently takes this ash byproduct," Chapman said.
A diverse mix of energy sources, Chapman said, is good for economic development in Southwestern Indiana because of interest companies have in renewable energy and lower-emission sources.
"We believe natural gas generation will be able to provide gas backup for obviously the solar that we'll have, and also renewable sources in the future," Chapman said. "That gas plant is a great foundation. You really cannot move from coal to renewables. The gas plant has the ability to turn off and on, and that will be a big part of our plan."
Building the natural gas plant, if approved, would create 600 to 700 mostly union jobs during peak construction time, Chapman said.
The Sierra Club, an environmental advocacy group, released a statement criticizing Vectren's plan for the natural gas facility and the ongoing use of fossil fuels.
While Vectren has plans to shutter some coal facilities, Chapman said its coal-fired Culley Unit 3 facility in Warrick County is to remain online beyond 2023.
“Vectren’s proposed fracked gas plant is larger than the coal-burning power plants it would replace," said Wendy Bredhold, senior campaign representative for the Sierra Club's Beyond Coal Campaign in Indiana. "We are concerned that a plant this size will crowd out the need for any meaningful investments in renewable energy for 40 to 50 years."
Bredhold pointed to Vectren's designation as having the state's largest residential electric bills. Chapman on Tuesday said the natural gas plant and solar farm would have no impact on bills in 2018.
Chase Kelley, Vectren vice president for corporate communications said the 800 to 900 megawatt natural gas plant "aligns well with our generation needs" and a public process throughout 2016 led to development of Vectren's energy resource plan.
"We modeled two scenarios with a smaller natural gas unit and more renewable and energy efficiency resources at the request of stakeholders who participated in the Integrated Resource Plan process, and those two portfolios proved to be significantly more expensive options for our customers," Kelley said.
Vectren in recent days has announced an electric bill reduction spurred by federal tax legislation that took effect Jan. 1. According to the utility, the reduction could be $70 to $90 per year for electric customers and $20 to $35 on the gas portion of an energy bill.
The utility received state regulatory approval for a multi-year rate increase, however, beginning in 2019 for an electric grid modernization plan.
Chapman said Tuesday that when combining all of those factors, "Average monthly electric bill amounts will essentially not change through 2024 as a result of these generation transition-related projects."