Nipsco to close aging 500 Mw plant in Gary, Ind.

Northern Indiana Public Service Co. (Nipsco), Merrillville, Ind., reported it will indefinitely shut down the 46-year-old, 500 Mw Dean H. Mitchell power plant in Gary, Ind., by yearend. The utility unit of Nisource Inc. said the decision was based on declining electric demand, resulting from the economic downturn and on current forecasts of prices in the wholesale market.

By the OGJ Online Staff

HOUSTON, Dec. 5 -- Northern Indiana Public Service Co. (Nipsco), Merrillville, Ind., reported it will indefinitely shut down the 46-year-old, 500 Mw Dean H. Mitchell power plant in Gary, Ind., by yearend.

The utility unit of Nisource Inc. said the decision was based on declining electric demand, resulting from the economic downturn and on current forecasts of prices in the wholesale market.

Because of the plant's age, Nipsco said extensive capital expenditures would be required in the next several years to ensure continued reliability. The Mitchell plant is the company's least efficient, the company said.

Furthermore, it said substantial capital investment would be needed to comply with current and future environmental standards set by the US Environmental Protection Agency (EPA) and the Indiana Department of Environmental Management (IDEM).

"Given the current economic climate, the decision to shut down the Mitchell generating station allows us to more efficiently serve our customers while ensuring long-term benefits to customers and NiSource shareholders," said Nipsco CEO Barrett Hatches.

He said there will be no impact on service or reliability. The plant will cease electricity production by yearend, with completion of the shutdown process expected by Mar. 1, 2002. The Gary plant has five generating units, with three fueled by coal, one by natural gas, and one by a combination of gas and coal.

Nipsco said it isn't thinking of closing any more plants in its 2,900 Mw portfolio. It said a sale of the Mitchell plant is possible, but no decision has been "made at this time."

The company said it notified the 112 employees who work at the plant their current positions will be eliminated. It said 84 United Steelworkers of America members, and 28 are salaried employees.

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