Biden solar tariff probe pushes Indiana utility to burn more coal

The Biden administration is making incremental progress toward a goal Donald Trump never achieved: reinvigorating U.S. coal power.

On Wednesday, Indiana utility NIPSCO announced that it will not be able to complete several solar power plants on schedule, blaming market upheaval in the wake of the U.S. Commerce Department’s decision to investigate possible solar tariff violations. As a result, the utility will keep a coal plant open several years longer than it had planned.

The Commerce investigation has caused ​“uncertainty and delays” in the solar market, the utility explained in a note to investors. Solar power plants under construction that it had expected to be operational in 2022 and 2023 are falling behind by six to 18 months. To ensure reliable power in the interim, NIPSCO will run the Schahfer Generation Station’s two remaining coal-fired units through 2025 instead of closing them in 2023 as originally planned.

It’s a stunning turnaround for a utility that had been hailed as a vanguard for rapid adoption of clean energy in the Midwest. NIPSCO determined in 2018 that it could save billions for customers by switching from coal-burning plants to renewables, years ahead of many of its peers.

That’s exactly the kind of action the White House says it wants to see in order to reach its goal of eliminating carbon emissions from the power sector by 2035. But there’s a problem: Solar developers can’t get their hands on panels anymore — major manufacturers in Asia have stopped shipping them to the U.S. because they fear the Biden administration will slap retroactive tariffs of up to 250 percent on their products.

Auxin Solar, a marginal U.S. manufacturer with just 35 employees, filed the petition in February. The petition contends that, after the Obama administration imposed tariffs on Chinese and Taiwanese solar cells and modules, those manufacturers circumvented the policy by building factories in Cambodia, Malaysia, Thailand and Vietnam. The Commerce Department launched the requested investigation in April.

Expanding tariffs to those countries would hurt the vast majority of U.S. solar panel imports in the name of helping a largely nonexistent U.S. manufacturing base.

The tariff petition won support from Ohio Senators Rob Portman (R) and Sherrod Brown (D). Their constituents include First Solar, based in Perrysburg, Ohio, the largest domestic panel manufacturer, which has already benefited from the tariffs constricting access to competing products.

But a broader bipartisan coalition of senators has taken a strong stance against the investigation. On May 1, 22 senators sent a letter to the Biden administration urging it to reject the retroactive tariffs and swiftly conclude its investigation. Without such action, solar installations this year are likely to fall precipitously.

“Left unaddressed, cutting off this supply of panels and cells also risks the loss of more than 100,000 American jobs, including approximately 18,000 manufacturing jobs,” the senators wrote.

Cutting off supplies of cheap solar power will also ​“needlessly” raise energy prices for consumers at a time when energy prices are already high, the letter states.

NIPSCO’s announcement delivers a concrete example of the tariff investigation’s escalating impacts.

“The solar projects were going to drive huge cost savings to customers,” Ben Inskeep, program director for consumer and environmental advocate Citizens Action Coalition of Indiana, noted on Twitter. ​“Now NIPSCO customers will have higher bills due to expensive coal prices and the delayed coal plant retirements.”

The Commerce Department is not planning to publish preliminary findings until August 30, with a final decision coming in January. If the department rejects calls for an expedited resolution, NIPSCO won’t be the last utility to suffer the consequences.