Downtown Indianapolis coal plant to convert to gas

November 23, 2011

The landmark Perry K Steam Plant in the southwest quadrant of downtown Indianapolis will soon make the conversion to natural gas, announced Citizens Energy Group.

The coal-fired plant, which includes one unit that has been operating since 1925, generates steam that is used by 250 downtown-area businesses for heat and other industrial purposes. Citizens claims that the change will improve the downtown area’s air quality, help the utility lower the cost of environmental compliance, and reduce operating costs, all of which will make the steam rates more competitive.

“Over the past five years, we have seen coal costs rise about 55 percent,” said Citizens President & CEO Carey Lykins. “Meanwhile, over the same period natural gas prices have fallen about 40 percent. Long range forecasts indicate stable natural gas prices for the next several years.”

Citizens believes that the $15 million renovation will have less of an impact on its capital than making the modifications that would be needed to meet clean air standards while continuing to burn coal. Annual operating costs are expected to drop by $5 million. The change will result in the elimination of 34 jobs, but Citizens hopes to accomplish that through attrition rather than layoffs.