Latest Indiana Michigan Power RFP includes larger storage and renewable targets
A new RFP issued by Indiana Michigan Power seeking 2.5 GW of power includes increased targets for solar, wind and storage than initially projected in the utility’s IRP issued last year.
The RFP is for as much as 2.5 GW broken down into 850 MW of solar, 800 MW of wind, 315 MW of storage and 540 MW of natural gas. All projects will be required to be a minimum of 5 MW with CODs before Dec. 15, 2027. They must also either interconnect directly to PM or I&M’s distribution system or be sited in MISO with firm delivery rights to PJM.
The 2.5 GW of capacity sought is larger than the capacity outlined in I&M’s IRP last year calling for 2,160 MW total including 800 MW of wind and 500 MW of solar. In an interview with NPM, I&M’s Senior Communications Consultant Michael Bianski said the increased capacity was due to a combination of factors.
The 800 MW of wind is actually a carryover from the RFP issued in March 2022 which also sought 800 MW of wind capacity. However, the utility ultimately signed no wind projects through that solicitation thanks to what Bianski calls a “limited response.” I&M did sign four solar projects through the RFP with a combined capacity of 749 MW, all of which are being considered for approvals by Michigan and Indiana state regulators.
Bianski says the inflated capacity targets are also the result of the planned retirement of the 1.3 GW Rockport Coal Plant, which is slated for 2028.
This RFP also marks I&M’s biggest commitment to date for storage resources. Bianski says the storage target is a replacement for a previously outlined 250 MW of natural gas. The final RFP is also removing a previously considered storage cap that would have limited paired storage resources to 20 percent of the paired generator’s capacity at the request of stakeholders.
Bianski says the utility’s newfound interest in storage is a result of the implementation of an ITC for standalone storage through the IRA and that signing 350 MW of storage will “provide I&M an opportunity to further diversify” its carbon-free, dispatchable generation resources. However, he says if 350 MW of storage is not available or “reasonably economic,” the utility will replace it with other carbon-free resources.
“Ultimately the types of quantities and resources selected will be dependent on the resources available to I&M in the RFP,” Bianski said.
I&M will be accepting both Purchase and Sale Agreements (PSAs) and PPAs through this solicitation. Michigan state regulators requested at least 30 percent of the resources contracted be through PPAs, which Bianski says is a target the utility has agreed to. However, he says while the utility does anticipate signing a mix, its preference is to own the generation resources.
“The benefits of PSAs include more flexibility and optionality on how projects are managed and operated, which provides additional opportunities to maximize the value of those resources,” Bianski said.
The RFP doc has also illustrated a preference for projects that will “provide economic benefits to Indiana or Michigan.” Bianski has clarified that these economic benefits may include “a project’s potential to stimulate the local economy using property and sales tax benefits, community support, and through the utilization of local suppliers, contractors and subcontractors.”
The deadline to bid into the RFP is May 26. I&M expects to select bids for final negotiations by Sept. 1, 2023, with contract negotiation and regulatory filings to follow in January and February 2024.
*This story was originally published exclusively for NPM subscribers last month.
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