Indiana Michigan Power (I&M), an operating company of American Electric Power Company (NYSE: AEP ) (market cap $18.46 billion), said Friday it is adding 100 megawatts (MW) of wind power to its generation portfolio as part of a 20-year power purchase agreement (PPA) reached with E.ON Climate and Renewables.
The new wind farm, to be called Wildcat 1, will be 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 Wildcat 1 is scheduled to begin before the end of 2011 and operations are scheduled for the end of 2012.
The PPA resulted from a request for proposals issued by I&M in January 2011 to construct a wind farm within its service territory. I&M said it considered having an ownership stake in a wind project, but the competitive bid received from E.ON proved to be a better deal for I&M and its customers. The agreement is subject to approval from regulators in both states.
According to I&M’s website, the company generates 5,877 MW of power, of which 3,595 MW is fueled by coal, 2,160 is nuclear, 22 MW is hydro and 100 MW is wind power. The wind power comes from the 400 MW Fowler Ridge Wind Farm  Phase 1 in Benton Country, Indiana, built by BP Wind Power, a subsidiary of BP plc (NYSE: BP ) and Dominion Resources Inc. (NYSE: D ).
E.ON is a German-based company that has stated it is investing more than $5 billion in renewable energy and environmental protection projects around the world from 2010-2013. E.ON Climate & Renewables North America, with offices in Chicago, Austin and Denver, has developed 1,900 MW of wind projects over the past three years, the company says.
Michigan has a renewable portfolio standard (RPS) requiring that energy providers meet a 10% renewable energy minimum by 2015. Energy providers must comply with this standard through renewable energy generation, renewable energy credits, and energy optimization schemes. The RPS specifies biomass, solar photovoltaics and solar thermal energy, wind energy, hydroelectric power, geothermal energy, and energy generated from landfill gas capture as potential sources of renewable energy. Up to 10% of the RPS can be met with advanced clean energy technologies that reduce emissions by 85% relative to average coal power plant emissions or integrated gasification combined cycle facilities that reduce emissions by 70%. Indiana does not have a RPS.
Photo credit: BP Wind Power
DISCLOSURE: The writer has no positions in, or professional connections with, these companies.