By KEVIN NEVERS
The Northern Indiana Public Service Company will not be purchasing the
Whiting Clean Energy facility from its parent company, NiSource Inc., as
NIPSCO announced in November as part of a plan to increase its electric
Instead, NiSource is selling the Whiting Clean Energy to BP for $210 million,
NiSource spokesman Tom Cuddy told the Chesterton Tribune today. The facility,
a 525 megawatt (MW) natural-gas fired combined cycle turbine located at the
BP Whiting Refinery property in Whiting, has been providing steam to BP for
its oil refining process for over a year. It has also been producing
electricity sold on the Midwestern wholesale market.
Under its operating contract with NiSource, however, BP had the right of
first refusal to purchase the facility should it ever be put on the block,
Cuddy said, and BP elected to exercise that right after NIPSCO announced its
intention to purchase the facility late last year.
“We see this transaction as another step on the path for long-term
sustainable earning growth for our shareholders,” Cuddy said. “It will also
allow us to continue to focus on our core assets.”
NIPSCO has indicated that it needs to increase its electric generating
capacity by 1,000 MW by 2014, and that the purchase of the Whiting Clean
Energy facility from NiSource, as well as the 535 MW Sugar Creek facility in
Terre Haute from the LS Power Group, would be a preferable alternative to
building new facilities.
A NIPSCO representative was not available this morning to discuss the
company’s plans in the wake of BP’s acquisition of the Whiting Clean Energy
facility. NIPSCO had estimated the combined purchase price of that facility
and the Sugar Creek one at $539 million.
An action plan prepared last year by NIPSCO for the increase of its electric
generating capacity assumes the probability of a mandate requiring the
reduction of carbon emissions, economic growth in its service territory, and
the expectation that the company will be required to carry a 15-percent
In addition to the purchase of natural-gas fired generating facilities, that
action plan has two other planks as well: long-term purchase power agreements
for 100 MW of renewable wind-generated power; and so called demand-side
management, under which NIPSCO will encourage customers to lower their
consumption and use energy more wisely.
Both the Whiting Clean Energy and Sugar Creek facilities burn natural gas to
generate electricity in the first cycle. In the second cycle, the exhaust
heat is captured, rather than vented into the atmosphere, and is used to
generate steam, which then drives steam turbines to supply additional