Southern Indiana Gas and Electric d/b/a Vectren Energy Delivery of Indiana (Vectren South), in a May 4 petition filed with the Indiana Utility Regulatory Commission, said that it is seeking approval to build, own, and operate a solar energy facility, as well as to timely recover costs incurred during the construction and operation of the project.
The solar project would total about 50 MW of alternating current (MWac) and would be located on about 300 acres of land within Spencer County, Ind. The solar project would be located in Vectren South’s assigned service territory and interconnected to the Midcontinent ISO (MISO) transmission system.
A subsidiary of Orion Renewable Energy Group LLC began developing the solar project in Vectren South’s service territory independent of Vectren South, including taking steps to acquire the land on which the solar project would be built, as well as necessary permits and certain tax incentives, the company said.
Vectren South also said that it entered into an agreement to acquire from Orion the rights and assets that Orion acquired to complete the solar project subject to Vectren South’s obtaining approvals requested in the proceeding.
Vectren South noted that it entered into an agreement to secure solar panels, as well as engineering, procurement, and construction services from First Solar Electric, LLC. The agreement included a fixed price for solar panels prior to tariffs being established for solar panel imports. The 50 MWac project is consistent with Vectren South’s 2016 integrated resources plan, the company said.
Development of solar generation offers environmental benefits and diversity in supply resources, Vectren South said, adding that it has several large customers that have expressed an interest in solar power.
The company also noted that it requests that the commission authorize necessary accounting and ratemaking treatment to permit Vectren South to timely recover through rates the costs incurred during construction and operation of the solar project. Those costs include depreciation expense, post-in-service carrying costs, taxes, and other operating expenses. Vectren South added that it will credit the tax benefits achieved as a result of the 30% income tax credit created under the Energy Policy Act of 2005 against such costs to provide the tax benefit to customers.
Among other things, Vectren South said that it requests that the commission authorize it to depreciate the solar project over a period of 30 years, as well as to defer the unrecovered solar project costs and maintain those deferrals until they are recovered through the ratemaking process.