Citizens Energy Group has announced it will make clean-burning natural gas the primary fuel powering its Perry K Steam Plant located in downtown Indianapolis.
Modifying the plant’s boilers to burn U.S.-produced natural gas rather than coal will improve the environment; reduce environmental compliance costs; and lower operating costs to make the utility’s steam rates more competitive.
The Perry K plant, located at Kentucky Avenue and West Street, generates steam for heating and industrial purposes for approximately 250 large business, industrial and institutional customers in the downtown area, including Lucas Oil Stadium and the campuses of Indiana University Purdue University Indianapolis (IUPUI) and IU Health.
Citizens invested about $12 million at Perry K in 2006 to comply with the U.S. EPA’s Boiler MACT I air emissions standards.
Citizens has determined that it can lower future capital costs by approximately $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.
“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. 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,” said Carey Lykins, president and CEO of Citizens Energy Group.
Citizens has determined that natural gas provides a more affordable and stable fuel source than coal. Citizens will make filings with the Indiana Utility Regulatory Commission related to the conversion plan in January 2012. The plant conversion work could begin in late 2012 and would conclude in 2014.
Converting the Perry K plant from coal to natural gas and efficiency improvements planned for the steam distribution system are expected to result in the reduction of 34 positions at Citizens over the next three years. Citizens will use attrition as much as possible to reduce actual job losses.