Dive Brief:
- Indiana Michigan Power — an American Electric Power utility — the Indiana Office of Utility Consumer Counselor, Citizens Action Coalition of Indiana, Amazon Data Services, Google, Microsoft and the Data Center Coalition have reached an agreement outlining the terms for connecting new large loads to the grid.
- The settlement, filed Friday with the Indiana Utility Regulatory Commission, requires new large load customers, such as data centers, to make long-term financial commitments to ensure they pay for the costs to serve them, and that those costs are not passed on to existing customers, Indiana Michigan Power, or I&M, said.
- If the agreement is approved by the utility commission, I&M will seek to develop a “clean energy transition” tariff by October so participants in the program can support, and pay for, investment in carbon-free resources.
Dive Insight:
The agreement comes amid major data center development in Northern Indiana. Amazon Web Services broke ground last month on an $11 billion data center campus near New Carlisle, Indiana, and in April, Google said it was building a $2 billion data center in Fort Wayne. Microsoft is planning a $1 billion data center in LaPorte, Indiana.
I&M expects its peak demand will double to about 8,000 MW by 2030 from about 4,000 MW last year, driven by hyperscaler data centers, according to a Sept. 24 integrated resource plan presentation.
The settlement agreement amends I&M’s industrial power tariff. It applies to new or expanded facilities with contract capacity of at least 70 MW or 150 MW aggregated across a company.
Initial contracts between I&M and the load must be for at least 12 years. The contract can start after a five-year rampup period, according to the agreement.
Under the agreement, large load customers can, without any fees, reduce their contract capacity after the first five years by up to 20% by giving I&M at least 42 months written notice before the start of the PJM Interconnection’s delivery year for which the reduction is sought, according to the agreement. Under similar terms, large load customers can terminate their contracts or reduce them beyond 20% by paying an exit fee.
The utility agreed to study the potential of grid-enhancing technologies and analytical tools that maximize the efficiency of the transmission system. I&M may use the study’s results in its next IRP, according to the agreement.
I&M also agreed to discuss with stakeholders possible changes to its interconnection process and the implications of adding large loads to its system, including the appropriate bar for entry into the utility’s queue, queue management, interconnection requirements and load ramping requirements, according to the agreement.
The AEP utility will continue to prioritize public safety in its emergency load reduction plans, but will meet with parties to the agreement to discuss emergency response procedures and demand response opportunities for industrial customers, according to the agreement.
I&M will give the IURC confidential semi-annual reports on new and pending large load contracts, according to the agreement.
Under the agreement, AWS, Microsoft and Google will each give $500,000 annually for five years to the Indiana Community Action Association, which has programs that support low-income people in Indiana.
The agreement contrasts with a similar debate in Ohio where Google and other data center companies are part of one group that filed a data center tariff last month with the Public Utilities Commission of Ohio. AEP Ohio and PUC staff joined others in filing a competing agreement at the PUC.
