Pioneer Transmission and the testimonial staff of the Indiana Utility Regulatory Commission (IURC) have reached a settlement agreement resolving the IURC’s concerns over Pioneer’s involvement in the 765-kV Reynolds to Greentown transmission project (IURC Case No. 44135).
The settlement agreement, which was filed with the IURC on Feb. 7 for approval, also proposes to give Pioneer status to operate as a transmission utility in the state of Indiana.
The IURC testimonial staff in September 2012 had objected to a separate settlement agreement that Pioneer had reached with Northern Indiana Public Service Co. (NIPSCO), which resolved an ownership dispute over the Midwest ISO (MISO) multi-value project and had been filed with FERC (Docket No. EL12-24). Among the IURC testimonial staff’s concerns was that Pioneer did not qualify for ownership of the line, as the connecting facility Pioneer claimed ownership over belonged, in fact, to Pioneer’s parent company, Duke Energy (NYSE:DUK). Pioneer is a joint venture between Duke Energy and American Electric Power (NYSE:AEP).
“At that time, the IURC testimonial staff didn’t have enough information,” Beth Roads, legal counsel to the testimonial staff, told TransmissionHub on Feb. 25. “Since that time, they’ve gotten more information [which] was in the supplemental testimony that has been filed in the proceeding before the IURC.”
The IURC testimonial staff also raised concerns regarding the potential costs to consumers of Pioneer’s involvement in the project.
According to the supplemental testimony filed Feb. 14, “While the IURC testimonial staff did not question the financial and technical capabilities of the parent companies of Pioneer, Duke and American Electric Power, Pioneer had not provided sufficient evidence in its case-in-chief of its capabilities, particularly its managerial capabilities. The IURC testimonial staff was concerned that the multi-layer, joint venture aspects of Pioneer could increase costs and reduce efficiencies. One example of this was the increased construction cost estimate for which foundational information was not made available in the course of discovery prior to the submission of my prior direct testimony.”
The IURC testimonial staff has since received sufficient information to assuage its concerns over Pioneer’s participation in the Reynolds to Greentown project, the staff said in the supplemental testimony. Duke Energy has assigned responsibility to Pioneer to build the project, and Pioneer has provided detailed information regarding how it formulated its cost estimate and how it chose an initial estimated route and on its materials estimates, according to the supplemental testimony.
AEP also provided detailed information regarding the benefits of its participation, according to the supplemental testimony. “These benefits include reduced costs by having 765 kV towers already designed and tested, and increased operational and maintenance efficiencies resulting from the use of employees trained by AEP that regularly work on 765 kV facilities and from access to back-up materials and supplies that are already maintained by AEP,” the supplemental testimony indicated.
“After careful review of all the information Pioneer has provided to date, it is the opinion of the IURC testimonial staff that Pioneer does have the managerial, technical, and financial capability to construct, own, operate, and maintain the Reynolds to Greentown MVP, in coordination and conjunction with NlPSCO.”
NIPSCO is a subsidiary of NiSource (NYSE:NI).
The Reynolds to Greentown project is a 69-mile, 765-kV transmission line that is estimated to cost $262.8m. The project has an estimated in-service date of June 1, 2018.