CenterPoint Energy wants to replace the coal-burning A.B. Brown Power Plant in Posey County with two natural gas turbines.
The utility company formerly known as Vectren has filed an application for the project with the Indiana Utility Regulatory Commission.
CenterPoint customers would pay for the proposed natural gas generation turbines via rate increases.
On its website, the utility company said it won’t request electric rate hikes for the $320 million project until 2023.
The Sierra Club says it opposes the plan and will formally intervene at the regulatory commission.
Spokeswoman Wendy Bredhold said natural gas will become “riskier and costlier as renewable energy becomes more affordable.”
She noted the plan would require construction of a gas pipeline under the Ohio River.
CenterPoint delivers power to about 145,000 customers in southwest Indiana.