Indianapolis: Downtown steam plant to convert from coal to natural gas

Citizens Energy Group will convert the coal-burning boilers at its Perry K Steam Plant in Downtown Indianapolis to natural gas.

The goal is to reduce costs with environmental laws, improve the air and lower operating costs to become more competitive, the company announced Wednesday in a news release.

The plant conversion work could begin in late 2012 and would conclude in 2014. Some jobs also will be lost over the next three years.

The cost of the conversion was not included in the news release.

The Perry K plant, at Kentucky Avenue and West Street, generates steam for heating and industrial purposes for about 250 large Downtown business, industrial and institutional customers, including Lucas Oil Stadium and the campuses of Indiana University-Purdue University Indianapolis and IU Health.

Citizens invested about $12 million at Perry K in 2006 to comply with the Environmental Protection Agency air-emissions standards. Faced with meeting new standards by 2014, Citizens determined it could lower capital costs by about $15 million by modifying the Perry K boilers to burn natural gas rather than coal.

“The conversion will also reduce annual operating costs about $5 million compared to operating modified coal boilers that would meet the new clean air standards,” the release said.

“Making natural gas the primary fuel at Perry K will mean cleaner air for Downtown Indianapolis and provide significant savings for our customers compared to continued use of coal,” said Carey Lykins, president and CEO of Citizens Energy Group, in the release. “These savings, combined with stable natural gas prices, will significantly improve the long-term viability of Citizens’ steam business in the growing Downtown Indianapolis area.”

“Over the past five years, we have seen coal costs rise about 55 percent,” Lykins added in the release. “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 thanks to growing natural gas production from shale formations located throughout the United States.”

Citizens will make filings with the Indiana Utility Regulatory Commission related to the conversion plan in January.

The conversion also would result in the loss of 34 jobs at Citizens over the next three years, the release said.


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