American Electric Power (NYSE:AEP) utility subsidiary Indiana Michigan Power (I&M) said Feb. 5 that it plans to add nearly 16 MW of solar power to its generation fleet following approval from the Indiana Utility Regulatory Commission (IURC).
The utility will own and operate the solar units. The estimated cost of the project is $38m. At least four of the five will be located near existing or future transmission substations, the utility said.
Three of the facilities will be in the Michiana area, including two in St. Joseph County, Ind., and one near Watervliet, Mich. A fourth will be in Marion, Ind., and a fifth location has not yet been determined, the company said in a news release.
The lone Michigan facility will be Watervliet (4.6 MW). The Indiana projects will include Olive (5 MW), Deer Creek (2.5 MW), Twin Branch (2.6 MW) and one site of 1 MW in a yet-to-be determined location in Indiana. The solar units should be in operation by the end of 2016, a utility spokesperson said.
The utility had sought approval of the solar program last July.
“Our Clean Energy Solar Pilot Project is a significant step forward for Indiana Michigan Power,” said I&M’s President and COO Paul Chodak III. “This historic utility-scale solar project will further diversify I&M’s generation sources, creating flexibility to economically and reliably provide energy under a multitude of potential circumstances.”
“Most importantly, I&M will own and operate these facilities and gain firsthand experience in the design and construction of utility-scale solar projects as well as integrating solar energy reliably into the grid,” Chodak added. “This knowledge will be of great value to I&M and its customers as I&M moves toward adding more solar resources in coming years.”
The overall impact on customer rates is expected to be about three-tenths of 1%, but the specific effect on individual rate classes such as residential or commercial will be determined once the actual costs are known.
The commission approval noted: “The record reflects that I&M’s cost estimate of $38 million for the 15.7 MW project is based on indicative pricing from three experienced solar EPC contractors. The actual cost of the solar installations will be based on a competitive procurement process and vary somewhat with the size and location of system facilities. I&M intends to have the CESPP in commercial operation no later than December 31, 2016 so that the pricing will benefit from the higher level of federal ITC available through that date.”
I&M will also offer customers the opportunity to increase the amount of solar energy attributable to their energy consumption by subscribing to Solar Renewable Energy Certificates related to the new solar facilities. The revenues from subscribers to the certificates will go directly toward offsetting the cost of the solar project.
Like other utilities, Indiana Michigan Power is working to reduce its reliance on coal power. It is working to install new emission controls at remaining coal units at its Rockport plant and it is engaged in a major lifecycle management program at its D.C. Cook nuclear station.