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With one change, Indiana utility regulators on Wednesday approved a settlement agreement that sets the terms for connecting data centers and other large loads to the grid.
“The tariff approach presented is a reasonable and balanced effort to provide a tariff for standard electric service, which provides financial protection and customer flexibility, and is a transparent, consistent offering across similarly situated customers,” the Indiana Utility Regulatory Commission said in its decision.
Indiana Michigan Power — an American Electric Power utility — the Indiana Office of Utility Consumer Counselor, Citizens Action Coalition of Indiana, Amazon Data Services, Google, Microsoft and the Data Center Coalition filed their settlement agreement with the IURC in November.
Driven by new large loads, I&M expects peak load in Indiana will jump to more than 7,000 MW by 2030 from 2,800 MW, according to the IURC’s decision.
The revised tariff for industrial loads will ensure they pay for the grid upgrades needed to serve them and that those costs are not passed on to existing customers, I&M said in a news release.
The settlement agreement amends I&M’s industrial power tariff. It applies to new or expanded facilities with contract capacity of at least 70 MW or 150 MW aggregated across a company.
The agreement defers cost allocation issues to future proceedings, such as a tracker filing or rate case, instead of setting a cost allocation or specific methodology for large load customers.
In one change to the agreement, the IURC ordered that any planned reduction of more than 20% of a large load customer’s contracted peak capacity must be submitted to the agency for its review and approval.
The agreement comes amid major data center development in Northern Indiana. Amazon Web Services broke ground in October on an $11 billion data center campus near New Carlisle, Indiana, and in April, Google said it was building a $2 billion data center in Fort Wayne. Microsoft is planning a $1 billion data center in LaPorte, Indiana.
I&M said it is in talks with other potential large load customers that may build facilities in the northeast Indiana region.