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Coal plants’ demise could boost electricity bills

Baby, it’s not as coal outside.

Coal-fired plants – the dominant source of cheap power – are shutting down in response to environmental regulations and economic forces. That means electricity prices are probably on their way up across much of the United States.

New and stricter pollution rules and tough competition from cleaner sources, such as natural gas, wind and solar, will result in dozens of coal-burning plants closing across 20 states over the next three years. And those that stay open will need expensive retrofits.

Indiana gets 84 percent of its electricity from coal-fired power, which places the Hoosier state fourth in the nation behind West Virginia, Kentucky and Wyoming in the proportion of its power that comes from that fossil fuel, according to the U.S. Energy Information Administration.

In February, Indiana Michigan Power touted a $500 million infrastructure improvement plan that will continue over the next decade that mainly upgrades transmission systems as the nation’s coal plants disappear. I&M has more than 401,000 electric customers in Indiana.

I&M spokesman Brian Bergsma on Wednesday said that while coal plants account for about 65 percent of the electricity the utility generates, more than a third comes from nuclear sources.

The infrastructure project involves strengthening and rebuilding power lines, installing new transmission lines, building and bettering substations, and updating equipment. Operations in the Roanoke, Auburn, Monroeville and Decatur areas are among the sites slated for improvements.

In Fort Wayne, I&M plans significant work at the Spy Run substation to Robison Park.

The I&M work is part of a larger project by American Electric Power, the utility’s parent firm that has 5 million customers in 11 states. Presently, average electric customer uses 1,000 kilowatts monthly and pays about $100.

Indiana’s power prices likely will rise 14 percent higher in 2020 than they would be without new federal pollution rules, according to the State Utility Forecasting Group, a state-funded, Purdue University research group.

Even with that increase, Hoosier power prices would remain among the cheapest in the nation.

The Energy Department, meanwhile, predicts retail power prices will rise 4 percent on average this year, the biggest increase since 2008. By 2020, prices could climb an additional 13 percent, a forecast that does not include the costs of coming environmental rules.

The U.S. Supreme Court last month backed Environmental Protection Agency limits on smokestack emissions that cross state lines and burden downwind areas with bad air from power plants they can’t control.

The Indiana Manufacturers Association said in a statement that the eventual cost effect of that ruling will be hard to measure.

“What this Supreme Court ruling does is embolden the EPA to be more aggressive in their rulemaking, which is unfortunate and will likely lead to an increase in the cost of electricity for all Hoosiers in the future,” the group said.

The Associated Press contributed to this story.