Opinion: CenterPoint Should Consider IRA Benefits During Resource Planning

September 7, 2022

The opinions expressed in this piece are those of the authors. They do not necessarily reflect the opinions or views of the Indiana Environmental Reporter.

CenterPoint’s 2022 energy planning process isn’t off to an auspicious start. At their first meeting Aug. 18, CenterPoint announced they have already made consequential decisions without public input and without taking into account the Inflation Reduction Act, which dramatically shifts the landscape for utility resource planning.

● CenterPoint plans to spend nearly $1 billion in customer money to build two new gas plants and a pipeline without reevaluating the economics in light of new clean energy tax incentives in the IRA.

● CenterPoint has decided to run its Culley 2 coal plant through 2025, despite announcing a 2023 retirement six years ago.

● CenterPoint will also continue to burn coal at the Warrick Super Polluter coal plant, despite announcing it would end its joint operations agreement with Alcoa six years ago.

Despite unprecedented opposition from a broad coalition of diverse groups, hundreds of petitions from the public, and not a single supporter of the project at its public hearing, the Indiana Utility Regulatory Commission approved CenterPoint’s plan to build the gas plants, which CenterPoint has admitted will almost never run, and which, along with a new pipeline, will cost customers nearly $1 billion.

However, CenterPoint isn’t required to build those gas plants. CenterPoint can choose not to go forward with the project, and should, at the very least, evaluate how the IRA changes the economics of that plan for customers. The implications of the IRA are no doubt significant enough to potentially change CenterPoint’s proposed course of action.

The IRA will significantly decrease the cost of resources that could replace CenterPoint’s existing coal resources by dramatically altering and expanding federal tax credits available for zero-greenhouse-gas-emitting facilities such as solar, wind and batteries.

CenterPoint said in the past that battery storage, for instance, could provide some of the needed services instead of the gas plants, but was more expensive. With the IRA, that is likely no longer the case.

Before the enactment of the IRA, battery storage was not entitled to any federal tax credits. Now, a stand-alone battery project is entitled to a 40% Investment Tax Credit if it is built at the site of a coal unit retired after 2009. CenterPoint plans to build the gas plants at the site of its Brown coal plant, scheduled to retire next year.

At their first meeting, CenterPoint would not commit to reevaluating the economics of the gas plants in light of the IRA. But if the IRA’s provisions are not adequately considered as applied to the construction of the gas plants, CenterPoint’s entire process is a charade that doesn’t take into account the current energy landscape nor ensure the best plan for customers.

CenterPoint has said that “IRPs are always conducted in a point in time based on the best available information.” That should be the case for this IRP as well.

Wendy Bredhold
Evansville, IN

Wendy Bredhold is the senior campaign representative for the Sierra Club’s Beyond Coal Campaign in Indiana and Kentucky.

Opinion: CenterPoint Should Consider IRA Benefits During Resource Planning