The Indiana Utility Regulatory Commission, in a Nov. 19 notice, said that it will conduct an evidentiary hearing on Jan. 16, 2020 in Indianapolis, Ind., regarding the joint petition of Northern Indiana Public Service Company (NIPSCO) and Indiana Crossroads Wind Generation LLC — referred to as the Joint Venture — for a certificate of public convenience and necessity (CPCN) for the purchase and acquisition of a 302-MW wind farm.
According to the October joint petition, the Joint Venture requested that the commission authorize NIPSCO to begin implementation of its generation transition plan as set forth in its Integrated Resource Plan submitted in October 2018 as such:
- Issue NIPSCO a CPCN to purchase and acquire indirectly through the Joint Venture a wind farm that will have an aggregate nameplate capacity of about 302 MW (the Crossroads Project) * Approve the Crossroads Project as a clean energy project
- Approve associated ratemaking and accounting treatment for the Crossroads Project
- Establish amortization rates for NIPSCO’s investment in the Crossroads Project through the Joint Venture
- Approve an alternative regulatory plan to implement the Crossroads Project, including establishment of the Joint Venture and the reflection in NIPSCO’s net original cost rate base of its investment in the Joint Venture
- Approve purchase power agreements through which NIPSCO would acquire the energy generated by the Crossroads Project, including timely cost recovery through NIPSCO’s fuel adjustment clause (FAC)
- Authorize NIPSCO to defer amortization and to accrue post-in service carrying charges (PISCC) on NIPSCO’s capital investments in the Joint Venture
- To the extent generally accepted accounting principles (GAAP) would treat any aspect of the Joint Venture as debt on NIPSCO’s financial statements, grant necessary financing approval * Approve an alternative regulatory plan for NIPSCO in order to facilitate the implementation of the Crossroads Project
- To the extent necessary, decline to exercise jurisdiction over the Joint Venture as a public utility
The joint petition noted that the Crossroads Project will be built by Indiana Crossroads Wind Farm LLC (Crossroads Project Co), which is initially wholly owned by EDP Renewables North America LLC. The Joint Venture will purchase 100% of the equity interest in Crossroads ProjectCo from EDP Renewables.
The joint petition added that once construction is complete, if all conditions precedent are met, the Joint Venture will be owned by three members, which are a tax equity partner (TEP), the “developer,” which is the entity that is building the Crossroads Project through Crossroads ProjectCo, and NIPSCO.
The developer will build the Crossroads Project through Crossroads ProjectCo, and transfer 100% of Crossroads ProjectCo to the Joint Venture under a build transfer agreement (BTA) when the Crossroads project begins operating in December 2021.
Immediately prior to the transfer, the developer will invest a portion of the proceeds to be paid by the Joint Venture under the BTA into the Joint Venture in return for an ownership share of the Joint Venture, which it will hold until 2023, the joint petition added. For its share, TEP will invest a percentage of the amount needed to pay the Joint Venture’s obligation under the BTA, with NIPSCO investing the remaining amount needed under the BTA in return for its share of the Joint Venture. In 2023, the joint petition added, NIPSCO will purchase the developer’s interest in the Joint Venture for cash.
TEP’s interest in the Joint Venture will enable it to receive 99% of the production tax credits and tax losses generated by the Crossroads Project along with distributions of up to 30% of any excess cash generated by the Crossroads Project.
Among other things, the joint petition said that the Crossroads Project will be a wind generation facility with a nameplate capacity of about 302 MW located in White County, Ind., that will be interconnected with NIPSCO’s 345-kV Reynolds substation. Upgrades are required to be completed at that substation, the joint petition said, adding that under an executed generation interconnection agreement, that work is expected to be completed in August 2021 by NIPSCO as the interconnecting utility.
The Crossroads Project — which is expected to achieve commercial operation in 4Q21 — will allow NIPSCO to continue to provide generating capacity and system reliability on an efficient and economical basis to meet the need for electricity within its service area, according to the joint petition.