Duke Energy Indiana (DEI) filed a petition on 2016-01-07 with the Indiana Utility Regulatory Commission (IURC) concerning a solar PV project at the Crane Naval Center in southern Indiana.
44734 petition Filed 2016-01-07
44734 Motion for Confidentiality Filed 2016 -01-14
44734 Docket Entry Requesting Procedual Schedule Filed 2016-01-22
You are hereby notified that on this date the Indiana Utility Regulatory Commission
("Commission") has caused the following entry to be made:
Duke Energy Indiana, LLC filed its Petition in this Cause on January 7, 2016, and filed
its case-in-chief on January 14, 2016. In lieu of a prehearing conference, the parties shall file a motion for an agreed upon schedule on or before February 2, 2016. If the parties are unable to agree to scheduling matters, the parties shall so indicate.
Duke Energy Indiana 's testimony filed 2016-01-14:
"The purpose of my testimony is to describe the Company’s 2015 Integrated Resource
Plan (“IRP”) analyses and how the proposed Naval Support Activity (“NSA”) Crane
Solar Facility (“Crane Solar Facility”) is consistent with Duke Energy Indiana’s
preferred resource portfolio from the 2015 IRP."
"My testimony will explain the Company’s proposed accounting and rate treatment
related to constructing, owning and operating a 17 MWac/24 MWdc solar powered
generating facility on land leased to Duke Energy Indiana by the Naval Support
Activity (“NSA”) Crane Solar Facility (“Crane Solar Facility”). I will provide an
estimate of the retail jurisdictional portion of the costs the Company proposes to
recover under Standard Contract Rider No. 62 – Qualified Pollution Control
Property Revenue Adjustment (“Rider 62”) and Standard Contract Rider No. 71 –
Clean Coal Operating Cost Revenue Adjustment (“Rider 71”). I will also discuss
the proposed treatment of the Renewable Energy Credits (“RECs”) associated
with the Crane Solar Facility. Lastly, I will provide an estimate of the associated
"The purpose of my testimony in this proceeding is to support the Company’s cost
estimate, contracting strategy and construction schedule for the proposed 17 MWac/24
MWdc solar-powered generating facility (the “Crane Solar Facility”) to be located on
land leased to Duke Energy Indiana by Naval Support Activity Crane (“NSA Crane”)."
Duke Energy Indiana has entered into a fixed price, firm schedule engineering,
procurement and construction (“EPC”) contract for the construction and installation of
the solar array with Mortenson Construction. Duke Energy Indiana will purchase the
solar panels directly from SolarWorld Americas, LLC (“SolarWorld”), and the DC/AC
inverters from Schneider Electric (“Schneider”). The transmission interconnection work
will be performed under firm price contracts overseen by both the Duke Energy Indiana
transmission organization and my organization, Duke Energy’s project management and
construction organization. My organization will be managing all aspects of the
construction of the Crane Solar Facility, in conjunction with Duke Energy Indiana’s
transmission organization, which will also be overseeing certain aspects of the Crane
Solar Facility’s interconnection with the transmission grid.
PLEASE DESCRIBE THE MAIN COMPONENTS OF THE COST ESTIMATE
FOR THE CRANE SOLAR FACILITY.
The Company’s cost estimate for the Crane Solar Facility has four main components:
(1) panels and inverters; (2) construction and racking of solar panels; (3) transmission
interconnection and construction of a substation; and (4) remote monitoring and site
communications infrastructure. I will discuss each component in more detail below.
First, Duke Energy Indiana will use negotiated Duke Energy supply agreements
with SolarWorld and Schneider to procure its panels and inverters for the project. By
design, solar panels are a direct current (“DC”) source and multiple panels are
interconnected to deliver a percentage of rated power at 1000V-DC. Multiple DC inputs
are combined and connected to an inverter, which yields an alternating current (“AC”),
again, at a percentage of the rated power of the facility at what is considered to be
distribution voltage, i.e. 13kV. The output from multiple inverters is then combined
within the facility and ultimately, at the solar facility’s substation, to deliver 100% of the
rated power of the facility to be stepped up to transmission voltage – in this case, 69kV –
and delivery onto the Duke Energy Indiana system.
Second, Duke Energy Indiana has entered into an EPC contract with Mortenson to
construct and rack the solar panels. Mortenson will be responsible for site preparation
and installation of racking and panels. It will also provide and install the DC and AC
cabling required to interconnect the solar modules into an array, aggregate the DC from
multiple arrays to an inverter and ultimately collect the AC 1 output of all inverters to yield
two 13kV distribution circuits that will be brought to a substation for transformation and
interconnection with the Duke Energy Indiana transmission system.
Third, although we do not anticipate hearing back from MISO on the Crane
interconnection until April 2016, Duke Energy Indiana has included costs associated with
both the transmission interconnection and construction of a Crane Solar Facility-related
substation. Based on the engineering assessment by Duke Energy Indiana’s transmission
group, it is reasonable for us to assume that such upgrades will ultimately be required by
MISO to support the addition of this generation to the transmission grid. Because of the
relative size of the proposed Crane Solar Facility and the low voltage of the transmission
line with which it will interconnect, we reasonably expect limited system impacts
associated with the project’s interconnection. However, to the extent there are additional
schedule or cost impacts associated with potential transmission system upgrades, those
will have to be evaluated to determine the impact to the commercial operation date and
cost estimate of the facility.
Fourth, Duke Energy Indiana has included costs for communications
infrastructure and remote monitoring of the Crane Solar Facility to ensure real time data
and grid optimization are both available. This facility will also be able to be isolated and
interrupted, in the event of a grid fault event, to both protect the Crane Solar Facility from
grid faults and the transmission grid from any faults associated with the Crane Solar
Facility. This level of monitoring and system control allows Duke Energy to optimize
this facility to the grid and ensure it is producing energy optimally as required by MISO.
In addition to these major components, Duke Energy Indiana has also included
within its estimate a reasonable amount for contingency and risk, as well as Duke Energy
labor and indirects. Given that nearly 80% of the capital costs for the Crane Solar
Facility are based on fixed price contracts, Duke Energy Indiana is confident that its
estimate is reasonable and accurate.
PLEASE EXPLAIN THE PROCESS DUKE ENERGY INDIANA UNDERTOOK
TO SELECT ITS CONTRACTORS FOR THIS PROJECT.
Duke Energy’s supply chain organization has established long-term supply contracts with
both SolarWorld and Schneider for photovoltaic modules and inverters, respectively.
Both suppliers were selected through competitive bidding processes, and comply with the
Buy American Act, which is required under the terms of the lease agreement with NSA
Crane. The SolarWorld contract was established in January 2015, and since then,
SolarWorld has successfully supplied photovoltaic modules for other Duke Energy solar
projects in North Carolina and Florida, meeting its contractual obligations. In October
2015, Duke Energy solicited pricing from multiple inverter suppliers and selected
Schneider as the best evaluated supplier for the Crane Solar Facility. The purchase order
with Schneider was executed in January 2016. Schneider products have a proven record
of quality and service with Duke Energy.
Our EPC contractor was selected through a competitive request for proposals and
is also compliant with the Buy American Act requirements. After evaluating the bids,
Duke Energy Indiana selected Mortenson based on its overall solar experience, Midwest
regional labor familiarity, federal government contracting experience and competitive
pricing. As I mentioned previously, our EPC contract is 1 a fixed price and firm schedule
contract with a target commercial date of December 2016.
Those three agreements, together, comprise approximately 80% of the capital
costs for the Crane Solar Facility. Although Duke Energy Indiana has taken the
necessary steps to firm up the majority of the cost estimate, there are portions of the
project for which contracts are not already in place – mainly the transmission and
communication infrastructure portions. Our contracting strategy for those remaining
portions is to enter into firm price contracts for engineering and construction in the first
quarter of 2016, with Duke Energy Indiana’s transmission organization providing the
generation step up transformer.
"My testimony will present an overview of the Company’s proposal to construct an
approximately 17 MWac solar powered generating facility on land leased to Duke Energy
Indiana by Naval Support Activity Crane (“NSA Crane”) in southern Indiana. The
proposed 17 MWac solar powered generating facility will be referred to as the “Crane
Solar Facility”. I will describe Duke Energy Indiana’s existing resource portfolio and
explain why it is important to add the Crane Solar Facility to our resource mix. I will
explain what Duke Energy Indiana is requesting in this proceeding, the statutory
backdrop for approval, and how this project fits with Duke Energy Indiana’s commitment
to growing the number of solar energy projects within its service territory. I will also
explain how the public convenience and necessity will be served by the construction of
the Crane Solar Facility. Finally, I will explain why Duke Energy Indiana is seeking
expedited review and approval in this proceeding."
Settlement Agreement in this case was filed on 4/15/16.