MISO files deal at FERC for recovery of Marshalltown interconnection costs

The Midcontinent Independent System Operator, on behalf of ITC Midwest LLC, filed with the Federal Energy Regulatory Commission on Sept. 2 a Facilities Services Agreement between ITC Midwest and Interstate Power and Light for the new Marshalltown power plant in Iowa.

The FSA provides a means to recover the cost of the network upgrades and shared network upgrades to ITC Midwest’s transmission system, funded by ITC Midwest, associated with the interconnection of IPL’s Marshalltown Generating Station. MISO has designated the generation project as Project No. J233 in its interconnection queue.

IPL is the developer of the MGS in Marshalltown, Iowa, which will be interconnected with the transmission system of ITC Midwest. Under a Substitute Amended and Restated Generator Interconnection Agreement between ITC Midwest, IPL, and MISO, ITC Midwest must install certain network upgrades on the ITC Midwest transmission system. A transmission owner may elect to “self-fund” the required network upgrades and then establish a facilities charge to recover the costs from the power plant developer over the term of the FSA. This FSA implements the self-funding option and establishes a charge to recover the return of and on the costs of the network opgrades.

Said the Aug. 2 quarterly Form 10-Q report of IPL parent Alliant Energy: “IPL is currently constructing Marshalltown, an approximate 650 MW natural gas-fired combined-cycle EGU. Construction began in 2014 and is expected to be completed in 2017. As of June 30, 2016, Alliant Energy and IPL recorded capitalized expenditures for construction work in progress of $558 million and AFUDC of $44 million for Marshalltown in ‘Property, plant and equipment, net’ on their balance sheets.”

IPL says plant tracking to be in-service in Q2 2017

IPL on Sept. 2 filed with the Iowa Utilities Board an update on the project. It noted that it has submitted a request to MISO to include Marshalltown in the February 2016 DPP Study for incremental interconnection service in the amount of 30 MW during the summer, and 65 MW during the winter. When completed, this will allow the plant to be accredited for capacity of 665 MW and would allow for energy injection up to 700 MW, subject to operating conditions.

This request for additional transmission interconnection service accommodates anticipated plant output that will be available from Marshalltown, consistent with updated plant output curves developed after the original interconnection service request was submitted to MISO. There is no incremental plant construction cost required to achieve this output from the plant. The February 2016 DPP Study is anticipated to be completed in 2017, after commercial operation of Marshalltown commences. IPL expects that any additional transmission network upgrade costs (above the currently known cost figures) for the increased plant output will not result in the project costs exceeding the board-approved cost cap of $920 million.

IPL has an Engineering, Procurement, and Construction (EPC) contract with Kellogg Brown & Root LLC for the plant. Overall engineering progress is substantially complete with the landscaping, testing, and commissioning procedures remaining. Engineering will continue to address construction-related questions and prepare final as-built drawings.

KBR selected Siemens as the major equipment supplier for the Combustion Turbine Generators (CTGs) and Steam Turbine Generator (STG) and Nooter Eriksen as the Heat Recovery System Generators (HRSGs) supplier. All major equipment has been delivered to the site. Procurement of equipment and materials is 100% complete. Subcontracts for system testing and landscaping remain to be completed.

KBR and its subcontractors have substantially completed the underground mechanical and electrical work. Erection of power train 1, 2, STG and building structural steel are progressing. Construction efforts in the coming months will continue to focus on completing building siding and installation of mechanical and electrical systems in all areas. Construction and start-up progress is approximately 75% complete and continues tracking to most of the major milestones. IPL continues to anticipate that Marshalltown will be in-service by the second quarter of 2017.

Construction has been completed on a gas pipeline for this project, with gas being delivered to the City of Marshalltown on Jan. 22, 2016. The IPL Sutherland Generating Station (SGS) and Marshalltown gas yards will be commissioned when gas is needed for these services. Right-of-way and easement restoration is complete and land owner crop damage payments are being finalized. IPL also completed testing on the gas regulators and dew point heater related to the SGS Combustion Turbines.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.