Chesterton Tribune

NIPSCO cites steel crisis in decision to close Mitchell

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By KEVIN NEVERS

Decreased production at Northwest Indiana’s steel mills has much to do with the decision of the Northern Indiana Public Service Company to close its Dean H. Mitchell Generating Station in Gary.

NIPSCO spokesperson Regina Biddings told the Chesterton Tribune today that demand for electricity has significantly declined in the region, and that according to NIPSCO’s projections it will remain low for another 18 to 24 months. “The nation is in a recession,” she said. “Local steel companies have filed for Chapter 11. Local growth is flat. Usage per customer is flat.”

But, Biddings added, “demand at local steel companies has particularly affected Northwest Indiana. And those businesses drive other businesses.”

The loss of the 500 megawatt Mitchell will still leave NIPSCO with a base load of 2,880 megawatts, produced by the company’s three other generating stations: the largest, Schahfer in Wheatfield, with a capacity of 1,780 megawatts; Michigan City, with a capacity of 589 megawatts; and Bailly, with a capacity of 511 megawatts. And that base load—supplemented as needed by NIPSCO’s purchase of electricity from a “pretty robust” transmission network—will be enough to meet all customer demand, and “there will be no impact on service or reliability as a result” of Mitchell’s closure, she said.

Biddings noted that none of NIPSCO’s generating stations is actually dedicated to the power needs of particular businesses or areas, and that Mitchell shouldn’t be considered the main supplier of LTV, say. Rather, the total wattage produced by the four is pooled in the grid and transmitted where and when necessary. But overall demand on that grid has slowed in the sluggish economy.

The decision to close Mitchell specifically was based chiefly on the age and obsolescence of the station, Biddings said. Built 50 years ago, Mitchell is operating at 40 percent of its capacity and would require in the near future $100 million in environmental retrofits mandated by the U.S. Environmental Protection Agency and the Indiana Department of Environmental Management, as well as an additional $30 million to $35 million in capital improvements. “It makes the most economic sense to shut (Mitchell) down.”

Even so, she said, NIPSCO intends to “protect the assets and the integrity” of Mitchell, and should conditions change—and warrant investment in its plant—Mitchell could be powered up again.

NIPSCO will cease production of electricity at the end of the year and the shutdown process should be completed by March 1.

Mitchell’s closure will result in the elimination of 112 positions, 84 of them held by members of the United Steelworkers of America and 28 of them salaried. Biddings said that the company’s collective bargaining agreement with the USWA will allow qualified members affected by the closure to bid for other employees’ positions elsewhere in the company based on their seniority.

 

Posted 12/6/2001