Indiana Michigan Power (I&M), an operating unit of American Electric Power (NYSE: AEP), will add solar energy to its generation fleet following the Indiana Utility Regulatory Commission’s approval of I&M’s plans for five solar facilities with a combined capacity of nearly 16 MW.
The projects will include a 5 MW facility between South Bend and New Carlisle; a 4.6 MW facility east of Watervliet, Michigan; a 2.6 MW facility near Mishawaka; a 2.5 MW facility at I&M’s Marion, Indiana service center; and a 1 MW solar park to be determined, somewhere in Indiana.
“Our Clean Energy Solar Pilot Project is a significant step forward for Indiana Michigan Power,” said Paul Chodak III, I&M’s president and chief operating officer. “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.”
Approval of I&M’s Clean Energy Solar Pilot Project plans comes at a time when solar technology is becoming increasingly efficient. The costs of solar resources are declining, and utility-scale solar is more cost-effective than rooftop systems. The addition of zero-carbon solar also meets the increasing interest of customers who want to use more renewable energy to meet their needs.
The four facilities where locations are final will be on property owned by I&M near existing and future I&M substations, which helps minimize the cost of delivering the energy to the transmission grid.
The estimated cost of the project is $38 million. The overall impact on customer rates is expected to be about three-tenths of 1 percent, but the specific effect on individual rate classes such as residential or commercial will be determined once the actual costs are known.
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.