Indiana Michigan Power Signs Wind Energy Deal

I&M considered having an ownership stake in a wind power project, but the competitive bid received from E.ON proved to be a better deal for I&M and its customers. Indiana Michigan Power has struck a deal to purchase power from a soon-to-be built wind farm in Madison, Grant, Howard and Tipton counties. Construction on the project by E.ON Climate and Renewables should begin this year and the wind farm is expected to be fully operational by the end of 2012.

Indiana Michigan Power (I&M), an operating company of American Electric Power (NYSE:AEP), is adding another 100 megawatts (MW) of wind power to its generation portfolio as part of a20-year power purchase agreement reached with E.ON Climate and Renewables; N.A. (EC&RNA).

The agreement will result in the construction of Wildcat -1; a new wind farm located in Madison, Grant, Howard and Tipton counties about 45 miles northeast of Indianapolis. The turbines at the site will be connected to the AEP transmission system to deliver power to I&M customers in both Michigan and Indiana. Construction on the Wildcat-1 Wind Farm is slated to begin before year’s end and it is expected to be fully operational by the end of 2012.

“In three years, Indiana has moved from last to leader in wind energy production. I am pleased to see that our support for clean energy resources is further encouraging the development of wind energy in Indiana,” said Lt. Governor Becky Skillman.

The wind power agreement resulted from a request for proposals (RFP) issued by I&M in January to construct a wind farm within its service territory. I&M considered having an ownership stake in a wind turbines project, but the competitive bid received from E.ON proved to be a better deal for I&M and its customers.

“Our agreement with E.ON is just another example of continuing efforts to diversify our generation portfolio,” said Paul Chodak III,
president and chief operating officer for Indiana Michigan Power.

“This project will not only provide renewable energy to serve all I&M customers, it will bring jobs and provide long-term economic benefits to communities in our service territory.”

I&M considered a number of sites within its Michigan and Indiana service territory for a new wind farm before moving forward with the proposal from E.ON’s Wildcat-1 Wind Farm. “The sites that were proposed to I&M as part of the RFP process demonstrate the resource potential and community support that exists for developing wind turbines powered generation,” noted Chodak. “The proposal from E.ON allows I&M to make more wind power available to our customers at the most reasonable cost.”

“We are excited to be expanding our wind energy business into the Midwest," said Steve Trenholm, CEO of EC&RNA. “The Wildcat project will produce enough energy to power roughly 60,000 homes and will offer new clean energy resources to I&M’s customers.”

The agreement is subject to approval from regulators in both states.

I&M also has two power purchase agreements for a total of 150 MW from the Fowler Ridge Wind Farm located in Benton County in Indiana.

Indiana Michigan Power (I&M) is headquartered in Fort Wayne, and serves more than 582,000 customers in Michigan and Indiana. It operates 3,595 MW of coal-fired generation in Indiana, 2,110 MW of nuclear generation in Michigan and 22 MW of hydro generation in both states. The company also provides its customers 150 MW of purchased wind turbines generation.

I&M is a unit of American Electric Power (NYSE: AEP), which is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning more than 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.

AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service

Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.