The Indiana Utility Regulatory Commission on Wednesday cleared the way for AES Indiana to transition two units at its Petersburg Generating Station from coal to gas.

The move came after opposition from the coal industry and even U.S. Sen. Mike Braun, who was elected governor Tuesday night.

Kentucky’s largest utility will retire some coal-fired power, boost renewable energy

“AES Indiana has no plans to retire Petersburg Units 3 and 4, as it views these units as valuable capacity and energy resources. AES Indiana proposes to repower these units to reduce operating costs and environmental regulatory risk so that the units may further the utility’s provision of reliable, affordable, and environmentally sustainable service,” the IURC order said.

“Substantial evidence demonstrates that the proposed repowering of Petersburg to natural gas is a long-term, low-cost solution that will help provide resource adequacy for a long period of time.”

Evidence in the case is that the Petersburg conversion will save $281 million over a 20-year period compared to keeping the units on coal.

The approval will allow AES Indiana to be the first Hoosier investor-owned electric utility to stop burning coal, according to the Indiana Utility Report.

Braun sent a letter last month to the state’s top utility regulators, saying he was concerned that “taking offline legacy sources of energy too quickly will have lasting implications that cannot be reversed.”

The conversion will temporarily close the units. The repowering will be staggered so that only one unit is offline at a time. Unit 3 conversion is expected to start in February 2026 and be completed in May 2026. Once completed, it will take about one month for startup, commissioning, and testing to reach a commercial operation date in June 2026. Unit 4’s outage would start in June 2026 and be completed in October 2026.

Braun urged commissioners to deny the conversion, and encouraged collaboration with policymakers to preserve coal’s role — “the most reliable baseload fuel” — while looking to the future.

The order said the energy industry and commission have long operated under uncertain environmental, regulatory and political conditions.

“Because neither the Commission nor the parties are capable of predicting the future, we must make decisions in the face of uncertainty. We do so by logically and reasonably assessing the extent of uncertainty and the possible effects of this uncertainty, avoiding supposition,” the order said.

The five utility commissioners agreed that the project will have positive social and economic impacts on the community of Petersburg and Pike County.

“The Project will provide support for intermittent renewable resources because the units provide firm capacity that is required for a reliable and stable grid,” the order added. “As (AES Indiana Chief Operating Officer for Generation John) Bigalbal testified, the converted units operating on natural gas will be significantly more flexible than a coal plant.”

This story is republished from the Indiana Capital Chronicle, a sister publication to the Kentucky Lantern and part of the nonprofit States Newsroom network.