Emissions and Indianapolis Power & Light and Electric and Wind Power and Energy & Environment and Utilities and Alternative energy and Law

IPL settles $190M dispute, resumes wind farm project

May 17, 2010

Indianapolis Power & Light and wind farm developer enXco have settled a contract dispute that mothballed construction of a facility in southwestern Minnesota.

France-based EDF Energies Nouvelles, parent of enXco, said Monday that an agreement has been reached with IPL to resume work on the Lakefield, Minn., wind farm, from which IPL plans to buy 201 megawatts of power over 20 years. The project was announced last year.

But last March, IPL terminated the contract with enXco, saying the approval granted in January by the Indiana Utility Regulatory Commission contained “certain limitations, restrictions and/or conditions which IPL did not find acceptable.”

The EDF subsidiary in return sought $190 million in damages from IPL, according to a filing IPL parent IPALCO filed with the Securities and Exchange Commission this month after enXco initiated arbitration proceedings.

Neither side disclosed the nature of IPL’s concerns.

EDF said Monday that enXco expects the Lakefield Wind Project will begin providing electricity in the second half of 2011.

IPL and enXco previously partnered on the Hoosier Wind Project, a 106-megawatt wind firm in Benton County that has 53 wind turbines. It provides up to 2 percent of IPL’s total power needs.

When Lakefield comes online, wind will comprise about 7 percent of IPL’s total power sales.

Like many utilities, IPL is trying to diversify beyond coal-fired generation as the Obama administration presses Congress to pass cap-and-trade legislation that would effectively tax utilities for emitting carbon dioxide.

The Indianapolis utility serving 470,000 customers is proceeding with improvements to its grid to promote energy efficiency, including advanced meters that will provide customers with detailed information about their energy usage to encourage them to conserve power.

IPL received a $20 million grant from the Department of Energy that it plans to use, along with with $29 million of its own capital, to update its power grid.

That includes up to 200 electric vehicle charging stations as part of a pilot program with Project Plug-IN, a program of the Indiana Energy Systems Network.

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