NiSource’s (NYSE:NI) Northern Indiana Public Service Company (NIPSCO) on May 14 said that it has opened a request for proposals (RFP) to consider a combination of potential resources to meet the future electric needs of its customers.
The need for the future electric capacity follows the projection made by the company in its last integrated resource plan (IRP) to retire 50% of its coal-fired electric generation by 2023, with its Bailly Generating Station on track to retire by the end of May, NIPSCO said.
NIPSCO said that it is considering all sources in the RFP process in conjunction with its 2018 IRP. The goal of the IRP is to identify a long-term plan for continuing to provide customers with cost-effective, reliable, flexible, and sustainable supplies of electricity, while addressing the inherent uncertainties and risks that exist in the electric industry, the company said.
Dispatchable and semi-dispatchable generation, renewables, demand response resources, and contractual arrangements will be considered, as well as such emerging technologies as storage, NIPSCO said.
The company noted that its current energy mix includes generation from natural gas and coal, as well as hydroelectric generation, purchased wind power, customer-owned renewable generation, demand response, and energy efficiency.
The RFP will close June 29, NIPSCO said.
According to the RFP, NIPSCO estimates a capacity need of about 600 MW beginning in 2023, based on the results of the 2016 IRP.
The RFP also noted that NIPSCO has retained Charles River Associates (CRA) to manage the RFP process for the purpose of creating the RFP and soliciting proposals. CRA will also serve as the independent third party to evaluate all proposals on behalf of NIPSCO, the RFP noted.
According to the expected timetable for the RFP process, the “proposal evaluation completion target and recommendation to NIPSCO” will occur on Sept. 14, while the “due diligence and negotiations period” has a date of 4Q18. The tentative date for a definitive agreement(s) to be executed with a selected respondent(s) is Dec. 31, the RFP said.
NIPSCO intends to contract with the optimal portfolio of assets for meeting the company’s needs and customer needs based on the bids received through the solicitation and the results of the IRP portfolio selection, which includes a range of portfolio designs and sizes, according to the RFP. That optimal portfolio may be comprised of multiple assets submitted by multiple counterparties, so bids supported by facilities offering fewer than, or more than, 600 MW will be accepted and evaluated for consideration, the RFP said.
NIPSCO has a preference for proposals that provide 100% of the specified generation facility or facilities from which output will be delivered or operating control of the entire unit(s) regardless of ownership stake, the RFP noted, adding that proposed generation facilities should have no major operational limitations that reduce the ability to run for extended periods.
Among other things, the RFP noted that for proposals to sell an existing generation facility to NIPSCO, the existing generating facility must be commercially operable, including all facilities necessary to deliver capacity (Zonal Resource Credits) to the Midcontinent ISO (MISO) Local Resource Zone 6.
The RFP also noted that NIPSCO will consider meeting some or all of its resource requirements through short-, medium- and/or long-term purchase power agreements. The company will only consider purchase power agreements that have a term of five years or greater, the RFP said.