IPL cuts back on renewable energy

INDIANAPOLIS (AP) - One of Indiana's largest electric utilities has decided to stop agreeing to buy more power from customers who generate it from renewable sources such as solar and wind.

Indianapolis Power & Light said it has contracts to buy significant amounts of electricity from large wind farms and that it must be careful about spending too much on renewable sources because that power now costs more than traditional electricity generation, the Indianapolis Business Journal reported Monday .

Environmentalists are pushing for the utility, which has about 470,000 customers in and around Indianapolis, to continue its 3-year-old Renewable Energy Production program that is set to expire next March.

So far, IPL has agreed to buy 2.2 megawatts of power generated by a handful of customers under contracts of up to 15 years. Projects providing another 30 megawatts are pending, including a 10-megawatt solar farm slated to be built at Indianapolis International Airport.

"IPL anticipates more projects proposed before the program expires," utility spokeswoman Crystal Livers Powers said.

IPL said it already has contracts to buy 300 megawatts of electricity generated by utility-scale wind farms to promote clean energy and as a hedge against high costs that might result from a federally mandated renewable energy program in the future.

"However, in the current energy environment, increasing the amount of renewable energy, which now costs more than traditional forms of generation, must be balanced against other expected cost increases such as those necessary to comply with Environmental Protection Agency mandates," the company told the Indiana Utility Regulatory Commission last month.

IPL has said it might have to spend as much as $900 million to equip its power plants with scrubbers to reduce harmful emissions.

Dave Menzer, who heads the Sierra Club's Beyond Coal campaign in Indiana, called IPL's decision "clearly wrongheaded."

If anything, Menzer said, renewable energy sources look more cost-effective when factoring in the how much IPL will need to spend on additional pollution controls on its coal plants.

"If we had our choice, let's promote new technology and clean energy and job creation," Menzer said.