Indiana utility to stop purchasing on-site generation

Indianapolis Power & Light says beginning next March it will stop offering to buy electricity from customers who generate it from renewable sources—a blow to advocates of wind, solar and other clean forms of energy.

The utility’s 3-year-old Renewable Energy Production program, or REP, expires next March 30. Proponents of renewable energy, who’d praised IPL for creating the program, in recent months implored the utility to extend and expand it.

So far, IPL has agreed to purchase 2.2 megawatts of power generated by a handful of customers under contracts of up to 15 years. IPL estimates it will pay about $567,000 for that power. IPL will continue to purchase power for the remaining terms of existing contracts and under terms of contracts written before the program ends in March.

Projects providing another 30 megawatts are pending, including a 10-megawatt solar farm slated to be built this summer at Indianapolis International Airport.

An additional 30 megawatts will be obtained through a “reverse auction,” which favors the applicant offering to sell power to the utility at the least unit cost.

“IPL anticipates more projects proposed before the program expires in March,” said Crystal Livers Powers, spokeswoman for the utility serving 470,000 customers, principally in Marion County.

A letter IPL sent June 28 to Indiana Utility Regulatory Commission Chairman James Atterholt cites several reasons for not continuing the pilot.

IPL said it already has contracts to purchase 300 megawatts of electricity generated by utility-scale wind farms to promote clean energy and as a hedge against high costs that might result from a federally mandated renewable energy program in the future.

“However, in the current energy environment, increasing the amount of renewable energy, which now costs more than traditional forms of generation, must be balanced against other expected cost increases such as those necessary to comply with Environmental Protection Agency mandates.”

 Finally, IPL told the commission the REP program has not generated the level of interest among customers that it originally expected.

IPL theorizes that part of the problem may be the economic downturn. IPL’s net metering program will continue. Under net metering, IPL issues a credit on the bills of customers who generate excess power each month through renewable sources, up to 1 megawatt.

 

Source: Indiana Business Journal

 

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