News Flash: Pioneer, NIPSCO reach agreement over Pioneer project

Pioneer Transmission, Northern Indiana Public Service Co. (NIPSCO) and the Midwest ISO (MISO) on Aug. 20 said they had reached a settlement agreement in an ownership dispute over the Pioneer project (FERC Docket No. EL12-24).

Simultaneously, Pioneer filed a request for rehearing that the company will withdraw upon FERC approval of the settlement agreement. 

FERC approval will result in the companies’ ability to develop and construct the project without delay, the parties said in the filings.

Under the terms of the settlement agreement, NIPSCO and Pioneer agree that they will jointly develop the Pioneer facilities, including the construction of a 65-mile transmission line originating at Duke Energy’s (NYSE:DUK) existing Greentown 765-kV substation near Kokomo, Ind., and traversing west to NIPSCO’s Reynolds substation near Reynolds, Ind., as well as the construction of certain upgrades at the Greentown and Reynolds substations, either at or near the Reynolds substation’s present location. 

“NIPSCO and Pioneer agree that the dividing point for the project shall be determined based on the parties’ intent that each have complete ownership of components of the project having a total cost equal to half of the total cost of the project,” the companies said in the settlement agreement.

MISO agrees that Pioneer and NIPSCO are designated as the parties responsible for construction of the project and that Pioneer may begin construction activities, with the understanding that it will have to sign the MISO transmission owner agreement (TOA) prior to commercial operation and take appropriate steps to integrate the project into the MISO transmission system, according to Pioneer’s request for rehearing.

“NIPSCO and MISO agree that they will not oppose, obstruct, or otherwise interfere with, in any manner whatsoever, the efforts of Pioneer to obtain approval of Pioneer utility status from the Indiana Utility Regulatory Commission and any other approvals required by MISO, any third party, and any governmental authority or applicable law with respect to the project,” the companies said in the settlement agreement.

Upon Pioneer becoming a MISO transmission owner, the RTO will assist the independent transmission developer with including the formula rate and incentive rates, the companies said in the settlement agreement.

According to the agreement, NIPSCO also acknowledges that Pioneer intends to pursue the construction of a 120-mile segment extending from the Reynolds substation south to American Electric Power’s (NYSE:AEP) existing Sullivan substation near Fairbanks, Ind., and a 100-mile segment extending from the Sullivan substation south to AEP’s existing Rockport substation near Evansville, Ind.

“If the additional segments require approval in an RTO regional planning process, then NIPSCO agrees not to seek or assert any rights to any portion of the development of, investment in, or ownership of the additional segments, except with respect to associated upgrades required at the Reynolds substation with a change in ownership at the first structure outside of the Reynolds substation,” the companies said in the agreement.

Pioneer, NIPSCO and MISO asked that FERC establish a response time of seven business days to submit comments in response to the agreement, and five business days to submit reply comments. 

Pioneer on Feb. 8 filed a complaint against NIPSCO and MISO over the construction of the first segment of the Pioneer project, asking that FERC set aside MISO’s interpretation of its transmission owners agreement (TOA) that Pioneer is not currently eligible to become a party to the TOA.

FERC on July 19 issued an order in favor of NIPSCO

Pioneer is a joint venture between AEP and Duke Energy.  

NIPSCO is a subsidiary of NiSource (NYSE:NI).

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.