IPL plans $25M power-storage facility at Harding Street plant

May 18, 2015

Indianapolis Power & Light Co. plans to construct a $25 million energy-storage facility in central Indiana, and city economic development officials hope to convince the utility to build it in Marion County.

Department of Metropolitan Development officials said Monday afternoon that IPL is looking at two spots for the Battery Energy Storage System, or BESS. One is at the Harding Street Station power plant site in southwest Indianapolis. The other is at a new $600 million Eagle Valley plant under construction in Martinsville in Morgan County.

Officials say the project would not create jobs in Marion County, but would help the utility retain 791 existing employees making an average wage of $32.64 per hour.

IPL spokeswoman Brandi Davis-Handy said Monday afternoon that the utility has about 791 operations workers in Marion County. There are no plans for the workers to lose their jobs if the BESS facility is not built at Harding Street, she said.

A BESS provides on-site storage of electricity that energy plants can draw on during peak hours, reducing the need for plants to ramp up production for short periods of time and thus cutting emissions and costs.

Officials peg the price of the BESS at the Harding Street plant as $24.5 million for new equipment and $500,000 for real estate. Therefore, the project is not eligible for a real estate tax abatement.

IPL, however, is seeking a 10-year abatement of personal property tax abatement that would save it almost $3.1 million, or 61 percent, during the abatement period. The utility would pay an estimated $1.9 million in personal property taxes on the facility over that time period and about $291,000 annually after the abatement expires.

Davis-Handy said IPL would "move forward" on the facility at Harding Street if the project receives the local tax incentives. IPL officials also have discussed incentives in Morgan County but prefer the Marion County location, she said.

Construction on the BESS facility could start this summer and be completed by fall 2016.

The Harding Street plant is scheduled to be converted from a coal-burning plant to a natural gas plant by next year after facing growing pressure to do so from environmental groups and politicians.

The abatement request is scheduled for a preliminary hearing Wednesday at the Metropolitan Development Commission meeting. If approved, it would receive a final vote June 3.


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