MERRILLVILLE, Ind. - In early June, Northern Indiana Public Service Company (NIPSCO) initiated testing of biomass (clean, used wood) as a fuel at Bailly Generating Station Unit 7 in Chesterton, Ind. This site is the second of three 30-day initiatives, testing opportunity fuels such as petroleum coke and wood (biomass) as commercially viable fuels with the potential to achieve beneficial environmental results. The testing is a fundamental step in NIPSCO's long range plan to build a portfolio of renewable energy sources.

"NIPSCO has long been a leader in reducing air emissions, the use of renewables goes one step further. The testing is promise in reducing the nitrogen oxides in the atmosphere," said Art Smith, NiSource environmental officer and council.

Both of these compounds are associated with ozone formation and global warming. In addition, the use of biomass has the potential to reduce other harmful emissions such as SO2 and Mercury.

In most cases, the use of renewable fuel is more expensive than the use of coal. Combustion of renewables often requires equipment retrofits, new fuel handling processes, and reduced operating efficiencies. Despite these issues, there is a national movement by consumers to purchase Green Power, even at a premium, to encourage new technology development.

"NIPSCO customers have also expressed this interest and we are working diligently to offer our customers a "Green" choice from NIPSCO in the near future," said Don Babcock, director of product line management. "The introduction of wood as a fuel source is the most cost-effective way to provide these environmental benefits because it utilizes existing generation equipment," added Babcock.

To the extent the Bailly test is successful, NIPSCO will be able to fulfill some consumer demand for Green Power and explore other renewable energy technologies.

Besides financial support, NIPSCO has committed significant technical resources, facilities, and operational expertise to its Biomass Initiative. In addition, the Department of Energy (DOE), Energy Efficiency and Renewable Energy Program (EERE) and the Federal Energy Technology Center provided major support for this test.

Northern Indiana Public Service Company (NIPSCO), a subsidiary of NiSource, is a regulated utility that provides natural gas to nearly 700,000 customers and electricity to 416,000 customers across the northern third of Indiana. NIPSCO is the largest natural gas distribution company, and the second largest electric distribution company, in the state of Indiana. Information about NiSource and its subsidiaries is available via the Internet at www.nisource.com.