STATE OF INDIANA INDIANA UTILITY REGULATORY COMMISSION - IURC ...
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STATE OF INDIANA
INDIANA UTILITY REGULATORY COMMISSION
VERIFIED JOINT PETITION OF NORTHERN INDIANA )
PUBLIC SERVICE COMPANY LLC AND ELLIOTT SOLAR ) FILED
GENERATION LLC (THE “JOINT VENTURE”) FOR (1) ) May 24, 2021
ISSUANCE TO NIPSCO OF A CERTIFICATE OF PUBLIC ) INDIANA UTILITY
CONVENIENCE AND NECESSITY FOR THE PURCHASE ) REGULATORY COMMISSION
AND ACQUISITION OF A 200 MW SOLAR PROJECT (THE )
“ELLIOTT PROJECT”); (2) APPROVAL OF THE ELLIOTT )
PROJECT AS A CLEAN ENERGY PROJECT UNDER IND. )
CODE § 8‐1‐8.8‐11; (3) APPROVAL OF RATEMAKING AND )
ACCOUNTING TREATMENT ASSOCIATED WITH THE )
ELLIOTT PROJECT; (4) AUTHORITY TO ESTABLISH )
AMORTIZATION RATES FOR NIPSCO’S INVESTMENT IN )
THE JOINT VENTURE; (5) APPROVAL PURSUANT TO IND. )
CODE § 8‐1‐2.5‐6 OF AN ALTERNATIVE REGULATORY )
PLAN INCLUDING ESTABLISHMENT OF JOINT VENTURE )
THROUGH WHICH THE ELLIOTT PROJECT WILL )
SUPPORT NIPSCO’S GENERATION FLEET AND THE ) CAUSE NO. 45529
REFLECTION IN NIPSCO’S NET ORIGINAL COST RATE )
BASE OF ITS INVESTMENT IN JOINT VENTURE; (6) )
APPROVAL OF PURCHASED POWER AGREEMENTS AND )
CONTRACT FOR DIFFERENCES THROUGH WHICH )
NIPSCO WILL PAY FOR THE ENERGY GENERATED BY )
THE ELLIOTT PROJECT, INCLUDING TIMELY COST )
RECOVERY PURSUANT TO IND. CODE § 8‐1‐8.8‐11 )
THROUGH NIPSCO’S FUEL ADJUSTMENT CLAUSE; (7) )
AUTHORITY TO DEFER AMORTIZATION AND TO )
ACCRUE POST‐IN SERVICE CARRYING CHARGES ON )
NIPSCO’S INVESTMENT IN JOINT VENTURE; (8) TO THE )
EXTENT GENERALLY ACCEPTED ACCOUNTING )
PRINCIPLES WOULD TREAT ANY ASPECT OF JOINT )
VENTURE AS DEBT ON NIPSCO’S FINANCIAL )
STATEMENTS, APPROVAL OF FINANCING; (9) )
APPROVAL OF AN ALTERNATIVE REGULATORY PLAN )
FOR NIPSCO IN ORDER TO FACILITATE THE )
IMPLEMENTATION OF THE ELLIOTT PROJECT; AND (10) )
TO THE EXTENT NECESSARY, ISSUANCE OF AN ORDER )
PURSUANT TO IND. CODE § 8‐1‐2.5‐5 DECLINING TO )
EXERCISE JURISDICTION OVER THE JOINT VENTURE )
AS A PUBLIC UTILITY. )
INDIANA OFFICE OF UTILITY CONSUMER COUNSELOR
PUBLIC’S EXHIBIT NO. 1
REDACTED TESTIMONY OF OUCC WITNESS
CYNTHIA M. ARMSTRONG
MAY 24, 2021
Public’s Exhibit No. 1
Cause No. 45529
Page 1 of 17
highlight indicates CONFIDENTIAL information
TESTIMONY OF OUCC WITNESS CYNTHIA M. ARMSTRONG
CAUSE NO. 45529
NORTHERN INDIANA PUBLIC SERVICE COMPANY LLC (“NIPSCO”) AND
ELLIOTT SOLAR GENERATION LLC
(COLLECTIVELY “JOINT PETITIONERS”)
I. INTRODUCTION
1 Q: Please state your name and business address.
2 A: My name is Cynthia M. Armstrong, and my business address is 115 W. Washington
3 St., Suite 1500 South, Indianapolis, IN, 46204.
4 Q: By whom are you employed and in what capacity?
5 A: I am employed as a Senior Utility Analyst in the Electric Division for the Indiana
6 Office of Utility Consumer Counselor (“OUCC”). A summary of my qualifications
7 can be found in Appendix A.
8 Q: Briefly summarize Joint Petitioner’s request in this proceeding.
9 A: NIPSCO’s request is essentially the same as its previous joint venture solar
10 requests. 1 Elliott Solar CEI, LLC, through Elliott Solar, LLC, a special purpose
11 entity, will build a 200 MW solar system in Gibson County, Indiana. NIPSCO, with
12 a tax equity partner(s) (“TEP”), will form a limited liability company to own the
13 Solar Project in an arrangement known as a joint venture. The TEP will invest in a
14 percentage of the Solar Project in return for 99% of the Investment Tax Credits
15 (“ITC”) and the tax losses and profits the Solar Project generates. The TEP will
16 also receive cash distributions the Solar Project generates equal to its investment
17 percentage share. NIPSCO will invest in the remaining Solar Project portion and
1
Cause Nos. 45194, 45310, and 45462.Public’s Exhibit No. 1
Cause No. 45529
Page 2 of 17
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1 operate the Solar Project once it achieves mechanical completion. The TEP
2 arrangement will continue until the TEP reaches the specified internal rate of return
3 (“IRR”). At this point, NIPSCO will have the option to acquire the TEP interest for
4 fair market value. 2
5 To facilitate NIPSCO’s ability to procure the Solar Project and enter into
6 the joint venture with a TEP (“Joint Venture”), Joint Petitioners request the
7 Commission issue NIPSCO a certificate of public convenience and necessity
8 (“CPCN”) and authorize NIPSCO to purchase and indirectly own, through the Joint
9 Venture, the Elliott Solar Generation project (“Solar Project”). Joint Petitioners
10 request approval for a build transfer agreement (“BTA”), a BTA purchase power
11 agreement (“PPA”), and a contract for differences (“CFD”) should certain tax
12 implications require the usage of a CFD instead of the BTA PPA. Joint Petitioners
13 also request alternative regulatory plan relief in relation to the Joint Venture. In the
14 event the Commission does not approve the Solar Project’s sale through a joint
15 venture structure, Joint Petitioners request approval to use a Back-Stop PPA for the
16 Solar Project. Joint Petitioners further request associated ratemaking treatment be
17 collected through NIPSCO’s Fuel Adjustment Clause (“FAC”).
18 Q: What is the purpose of your testimony in this proceeding?
19 A: I provide the OUCC’s recommendations for Commission treatment of (1) project
20 risk management and (2) the CFD. Specifically, I recommend the Commission
21 modify the cap on additional project costs, with ratepayers and NIPSCO sharing
2
Joint Petitioner’s Confidential Exhibit No. 2, Direct Testimony of Andrew S. Campbell, pp. 24-27.Public’s Exhibit No. 1
Cause No. 45529
Page 3 of 17
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1 cost overruns fifty/fifty (“50/50”) up to the cap. If NIPSCO takes the CFD option,
2 I further recommend NIPSCO commit to ensuring it does not result in higher costs
3 than ratepayers would experience under a BTA PPA.
4 Q: How did you evaluate issues presented in this Cause?
5 A: I reviewed materials presented in this docket pertinent to the topics addressed in
6 my testimony, including the petition initiating this proceeding, Joint Petitioners’
7 pre-filed verified direct testimony and exhibits, and Joint Petitioners’ responses to
8 OUCC discovery requests. I reviewed the relevant portions of Ind. Code3
9 compliance statutes for new generation projects. Finally, I reviewed the
10 Commission’s recent orders in Cause Nos. 45462 and 45472 issued May 5, 2021. I
11 also reviewed previous CPCN cases where cost overruns became an issue. 4
12 Q: To the extent you do not address a specific item in your testimony, should it be
13 construed to mean you agree with Joint Petitioners’ proposals?
14 A: No. Exclusions of any topics, issues, or items Joint Petitioners propose does not
15 indicate my approval of these topics, issues, or items. Rather, the scope of my
16 testimony is limited to the specific topics discussed herein.
II. RATEPAYER RISK
17 Q: Why is it important to identify and manage risk?
18 A: Risks, both known and unknown, may translate into additional ratepayer costs. The
19 OUCC has been concerned about ratepayer risk in every joint venture request. As
3
Including but not limited to, Ind. Code ch. 8‐1‐8.8, et seq. Ind. Code ch. 8‐1‐2.5, et seq., Ind. Code § 8‐1‐
2.5‐5, and Ind. Code ch. 8‐1‐8.5, et seq.
4 For example, Cause Nos. 43114, 43314 – IGCC, 1 and 4S1, 42700, 43403, 42170 ECRs 5, 7, 8, 14, 16S1,
and 19, 43913, and 44012 Phase 1.Public’s Exhibit No. 1
Cause No. 45529
Page 4 of 17
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1 the OUCC continues to review these extremely complex arrangements, these
2 concerns remain.
3 Q: Please explain some known risks associated with joint venture arrangements.
4 A: There are several risks associated with pursuing a joint venture arrangement instead
5 of a traditional PPA, e.g., NIPSCO’s Back-Stop PPA. First, if NIPSCO used a
6 traditional PPA, it would pay for the power produced at the agreed price with the
7 developer. It would not be exposed to the financial risk if project construction,
8 interconnection, and operation and maintenance costs are more than expected. Nor
9 would NIPSCO be responsible if the equipment failures result in greater than
10 expected capital maintenance or frequent equipment replacements. However, under
11 a joint venture arrangement, these additional costs are typically the joint venture’s
12 responsibility. Ratepayers would eventually bear the burden of increased project
13 costs when the utility seeks to recover its portion of project investment through
14 rates.
15 Second, when a traditional PPA term ends, the off-taker, NIPSCO, has the
16 option to pursue a variety of replacement options or to do nothing. At that time,
17 NIPSCO can make an informed decision based on its current needs and alternate
18 resource options. NIPSCO would also have the advantage to consider technology
19 progressions that make renewables or other generation types more efficient.
20 NIPSCO could then consider purchasing the Solar Project at a fair market price, if
21 that is the best option. On the other hand, in a joint venture arrangement, the TEPPublic’s Exhibit No. 1
Cause No. 45529
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1 has the option to sell its share of the joint venture when it meets its IRR. 5 This is
2 expected to occur in 2030 for this Joint Venture. 6 At that point, the utility is faced
3 with limited options: purchase the TEP’s interest at the flip point or do not purchase
4 the TEP’s interest.
5 Q: Are there additional risks specifically related to NIPSCO’s request?
6 A: Yes. While Joint Petitioners attached drafts of contracts associated with the Joint
7 Venture, the CFD and BTA PPA remain unexecuted. 7 Until the final contracts are
8 executed, there is a risk its terms could change, which could negatively impact
9 ratepayers depending on the contract’s changes.
10 Q: Please explain “unknown risk.”
11 A: Joint venture arrangements in Indiana are still new. While the Commission
12 approved three NIPSCO requests representing five projects, 8 these projects have
13 not been implemented and thus have not yet proven beneficial to ratepayers. It is
14 uncertain if the Joint Ventures will actually result in the ratepayer savings NIPSCO
15 represents. This unknown risk is also compounded by the volume of joint venture
16 arrangements NIPSCO is pursuing. Given the lack of real-world implementation
17 examples in this jurisdiction, the OUCC wants to ensure NIPSCO’s ratepayers are
18 protected as much as practicable from these risks leading to ratepayer burden. One
19 reason utilities are proposing these types of arrangements is cost savings. If
5
Campbell Direct, p. 26, line 11 – p. 27, line 2.
6
Campbell Direct, p. 26, line 15 – p. 27, line 2 (inclusive of footnote 24).
7
Campbell Direct, p. 37, lines 1-2.
8
NIPSCO has received three (3) approvals, IURC Cause Nos. 45194, 45310, and 45462, these approvals
represent five (5) projects. NIPSCO currently has three (3) projects pending approval, IURC Cause Nos.
45511, 45524, and 45529.Public’s Exhibit No. 1
Cause No. 45529
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1 NIPSCO expects the Commission to approve untraditional arrangements for
2 acquiring generation, ratepayers deserve to receive the bargain the utility is
3 promising.
III. MANAGING RISKS
4 Q: When does the OUCC recommend risks associated with the Solar Project be
5 managed?
6 A: The OUCC recommends risks be managed before the Solar Project is approved.
7 Q: Why is it important to manage the risks associated with the Solar Project prior
8 to approval?
9 A: Cost deviations from the final project amount could change the reasonableness of
10 selecting that resource option to meet customers’ needs. If the true project costs are
11 not known upfront, NIPSCO may have foregone another resource option or project
12 that would have provided greater customer benefits. However, once a project is
13 approved, it is difficult to change course and select a better resource option.
14 Additionally, changes from the final project amount may change the
15 OUCC’s conclusions and recommendations; however, the OUCC will not have the
16 ability to provide a different recommendation after the Solar Project is approved.
17 Generally, when a utility seeks subsequent approval regarding additional
18 investment associated with a project, the issue becomes the additional investment’s
19 reasonableness instead of the entire project’s reasonableness. As project
20 development proceeds, rejecting cost increases becomes increasingly difficult.
21 Within the past 15 years, the OUCC and the Commission has dealt with
22 several utility projects greatly exceeding their original estimates. During this time,Public’s Exhibit No. 1
Cause No. 45529
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1 it was common for a utility to present a project cost estimate in a new CPCN case
2 where the final project cost would balloon to 25% or more over the original cost
3 estimate during project construction. 9 Utilities were able to shift the risk of these
4 cost overruns to customers, as they were recovered on an expedited basis through
5 trackers. While NIPSCO’s current request differs in its set-up and recovery
6 mechanism, the issue remains the same. The OUCC wants to ensure that costs
7 associated with utility investment (or, as in this case, regulatory assets associated
9
See e.g.: Duke Energy Indiana (DEI)’s examples of cost overruns: In Cause No. 43114, the Commission
approved DEI’s Integrated Gasification Combined Cycle (“IGCC”) plant costs for $1.985 billion. In IGCC-
1, this cost was revised to $2.350 billion. In Cause No. 43114 IGCC-4S1 (Phase 1), DEI requested another
increase of the IGCC project to total $2.88 billion, but the OUCC and other intervenors settled with DEI for
a $2.595 billion cost cap for the plant.
Indianapolis Power and Light (IPL)’s examples: In Cause No. 42700, the Commission approved $182 million
for the construction of the Harding Street Unit 7 Flue Gas Desulfurization (FGD) unit and the Peterburg Unit
3 FGD upgrade. In Cause No. 42170 ECR-5, IPL sought, and the Commission approved, a modification to
the CPCN to increase the Unit 3 FGD Enhancement cost estimate by $3 million. In 42170 ECR-7, the Unit
3 FGD enhancement increase was re-affirmed to a total project cost of $27.5 million, compared to the original
estimate of $24.954 million. In Cause No. 42170 ECR- 8, IPL sought, and the Commission approved another
increase for the Unit 3 FGD Enhancement to total $29.5 million and a $60 million increase for the Harding
Street Unit 7 FGD to total $220 million. In Cause No. 43403, the Commission approved $90 million to
construct the Petersburg Unit 4 FGD upgrade. In Cause No. 42170 ECR-14, IPL modified the CPCN for the
Unit 4 FGD upgrade to increase the cost estimate to $119.9 million, and the Commission approved IPL’s
request. In Cause No. 42170 16 and 16S1, IPL increased its cost estimate for the Unit 4 FGD Upgrade again
to reflect the total project cost at $128 million, and the Commission approved this increase. In Cause No.
42170 ECR-19, IPL once again sought a modification to its CPCN to increase the Petersburg Unit 4 FGD
Enhancement to $129.6 million, which the OUCC challenged. IPL and the OUCC settled and agreed the
project amount recovered through the ECR would not exceed $129.6 million, but IPL would have to seek
additional costs beyond that cap in a future rate case. The OUCC reserved the right to challenge any such
additional costs in the future rate case. The Commission approved the settlement and IPL’s requested
modification.
NIPSCO’s examples: In Cause No. 43913, NIPSCO requested a CPCN to install a FGD system on Schahfer
Unit 14 for $153,560,417, and the Commission approved this request. In Cause No. 44012 Phase 1, NIPSCO
sought a CPCN for multiple environmental controls, which included an increase in the cost estimate for the
Schahfer Unit 14 FGD to $203 million. The Commission approved NIPSCO’s CPCN, including the Unit 14
FGD revised estimates.Public’s Exhibit No. 1
Cause No. 45529
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1 with investments) are managed appropriately, whether it be a coal, gas, or
2 renewable generating facility.
3 Q: Has NIPSCO worked with the OUCC in previous cases to manage some
4 ratepayer risk?
5 A: Yes. NIPSCO worked with the OUCC in the first tax equity partnership request to
6 design some customer protections to manage some ratepayer risks. 10 NIPSCO
7 committed to implement these management strategies in subsequent joint venture
8 arrangements, including the Elliott Solar Joint Venture presented in this case. 11
9 Q: Please explain how the OUCC addressed risk management in previous cases.
10 A: In the Rosewater proceeding, Cause No. 45194, the OUCC was concerned with
11 NIPSCO ratepayers’ total investment in the project and subsequent projects tied to
12 NIPSCO’s Short Term Action Plan from its 2018 Integrated Resource Plan
13 (“IRP”). 12 As this was the first joint venture arrangement the OUCC encountered,
14 the OUCC was under the impression the only risk of additional ratepayer costs was
15 tied to the additional investments NIPSCO described. Therefore, capping additional
16 costs would protect ratepayers from increases in the overall cost of the project.
17 Q: Is NIPSCO committing to cap costs on additional investments in this
18 proceeding as it has done in previous joint venture proceedings?
19 A: Yes, as explained in Mr. Campbell’s testimony, “NIPSCO commits that there will
20 be a cap of cost recovery related to any additional investments . . . NIPSCO may
21 make into the Joint Ventures. The amount recoverable from ratepayers shall be
10
Campbell Direct (Confidential), p. 44, line 3 – p. 46, line 10.
11
Id.
12
See IURC Cause No. 45194, Public’s Exhibit No. 3, Direct Testimony of John Haselden.Public’s Exhibit No. 1
Cause No. 45529
Page 9 of 17
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1 capped at
2 .” 13
3 Q: Does this commitment manage all risks?
4 A: No. This commitment does not manage all risks. NIPSCO’s management strategy
5 only applies to a limited category of additional investment. 14 As discussed below,
6 NIPSCO’s classification of additional investment can circumvent the agreed upon
7 management strategy of a cap on ratepayers’ share. Additionally, NIPSCO and the
8 OUCC have not worked together to review the efficacy of the management strategy
9 since its first joint venture request. As the OUCC continues reviewing this new
10 acquisition structure it is apparent there are additional risks to consider that do not
11 fall under the current management strategy, and NIPSCO has discretion regarding
12 how to categorize a cost.
13 Q: In the IURC’s Cause No. 45462 Order, the Commission discussed cost
14 estimates in relation to OUCC Witness Lauren Aguilar’s testimony. Please
15 explain the context.
16 A: In IURC Cause No. 45462, the OUCC took issue with specific confidential terms
17 in the BTA NIPSCO negotiated with NextEra. The Commission accepted
18 NIPSCO’s best estimate, as it originated through the request for proposals (“RFP”)
19 and rejected the OUCC’s concern with the specific BTA terms. 15
20 Q: Are your concerns here in a different context?
21 A: Yes. In addition to the unknown risk I discussed above, I am concerned with the
22 discretion afforded to NIPSCO in determining what falls under the Joint Venture’s
13
Campbell Direct, p. 44, lines 15-17, to 45, line 3.
14
Campbell Direct, p. 27, line 7 – p. 28, line 2.
15
Cause No. 45462, Final Order, pp. 48 and 60-61.Public’s Exhibit No. 1
Cause No. 45529
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1 A: The OUCC proposes eliminating specific cost categories and imposing a cap on all
2 potential additional ratepayer costs associated with the Joint Venture. In line with
3 previous ratepayer protection iterations, to incentivize NIPSCO to keep costs low,
4 the OUCC proposes 50/50 cost sharing between ratepayers and shareholders.
5
6
7 . 18
8 In any subsequent filing where NIPSCO recovers costs associated with the
9 Solar Project, I recommend NIPSCO refile the Confidential documents Mr.
10 Campbell presents in this Cause with his testimony in order to enforce such a cap.
11 Currently, the Solar Facility’s cost is redacted from public documents. It is
12 unconventional to redact the total project cost the Commission approves in CPCN
13 proceedings. However, the OUCC understands the Solar Project developer does not
14 want this information made public, as it could inhibit its negotiation ability for other
15 projects it develops. Because the OUCC must destroy Confidential documents after
16 a case has reached its final ruling it cannot keep a record of the original costs
17 proposed in this proceeding. Therefore, refiling these documents in any future
18 proceeding where NIPSCO recovers the Solar Project costs will assist in the
19 Commission’s and OUCC’s review.
18
Campbell Direct, p. 45, lines 2-3.Public’s Exhibit No. 1
Cause No. 45529
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1 Q: Please further explain why the terms of the OUCC’s recommended cap are
2 reasonable.
3 A: This approach acknowledges that NIPSCO provided its Project’s best estimate
4 based on what it knows at this time. However, NIPSCO represented that this
5 project, along with the other projects which are part of the 2018 IRP Short-Term
6 Action Plan, provide economic benefits to ratepayers, in addition to societal
7 environmental benefits. NIPSCO estimates its generation transition will generate
8 more than $4 billion in cost savings over the next 30 years, and NIPSCO’s
9 customers are expected to see these savings as early as 2023. 19 Additional costs
10 associated with the Solar Project or the Joint Venture could potentially evaporate
11 the savings NIPSCO represents. The OUCC’s recommended 50/50 sharing with a
12 ratepayer cost cap balances the risk between NIPSCO ratepayers and shareholders
13 and further incentivizes NIPSCO to minimize the Solar Project’s cost overruns.
14 Further, imposing caps on utility projects as ratepayer protection is not a
15 new concept. In past CPCN cases, the OUCC recommended, and the Commission
16 approved, imposing construction cost caps on pollution control projects and
17 generating plants. 20 While the joint venture presents a different method of
18 constructing and acquiring generation to serve customers, the concept of imposing
19 a cap as an incentive to NIPSCO and the Joint Venture to control project overruns
20 and protect ratepayers is still applicable.
19
Id. p. 9, line 13 – p. 10, line 2.
20
These cost caps were usually the result of settlements, and the Commission approved these settlements.
See Cause Nos. 43114 IGCC-4S1, 42170-ECR-19, and 44794.Public’s Exhibit No. 1
Cause No. 45529
Page 13 of 17
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1 Q: Does imposing a ratepayer cap completely alleviate the OUCC’s concerns?
2 A: No. OUCC witness Caleb Loveman discusses other concerns with Joint Petitioner’s
3 accounting and ratemaking treatment proposal. This proposed ratepayer cap does
4 not negate other OUCC witnesses’ recommendations.
5 Q: Are there any other issues regarding project risk you would like to address?
6 A: Yes, but it appears NIPSCO already addressed the risk issue
7 . NIPSCO investigated the possibility of procuring insurance that would
8 protect it if project delays impact the ITC amount for which the Elliott Project
9 qualifies. NIPSCO’s search revealed such insurance products are available (“ITC
10 insurance”). 21 In Cause No. 45524 (Crossroads Solar Joint Venture), the OUCC
11 questioned the reasonableness of acquiring ITC insurance. However, in this case,
12
13 . 22 Therefore, the OUCC’s concern about the
14 ITC insurance OUCC witness Lauren Aguilar notes in Cause No. 45524 do not
15 appear to apply in this case. However,
16
17 the OUCC asserts the same position it takes in
18 Cause No. 45524, that the ITC insurance costs should be subject to a prudency
19 review in the rate case following when such costs are incurred.
21
Campbell Direct, p. 28, lines 5-15.
22
Campbell Direct, p. 29, lines 7-10.Public’s Exhibit No. 1
Cause No. 45529
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IV. CONTRACT FOR DIFFERENCES
1 Q: Has the OUCC previously raised concerns about the contract NIPSCO refers
2 to as a CFD?
3 A: Yes. These concerns were previously raised in two cases. 23 Joint Petitioners
4 represent the CFD will produce the same result for ratepayers as the BTA PPA.
5 However, the OUCC will be unable to verify this until the Solar Project becomes
6 commercially operational and costs begin to flow through the FAC.
7 Q: Has the Commission ruled on these concerns?
8 A: Yes. In its Cause No. 45463 Order regarding NIPSCO’s and Indiana Crossroads
9 Wind Generation LLC’s request for modification of the Commission’s Cause No.
10 45310 Order authorizing a CFD as a third option for the purchase of the electrical
11 energy output of the Crossroads Project, the Commission stated:
12 While we recognize NIPSCO’s assertion that the CFD should
13 produce no difference in recovery from the BTA PPA, we agree with
14 the OUCC’s concerns that ratepayers should not be harmed if the
15 CFD does, for whatever reason, produce a different result. 24
16 The Commission subsequently ordered:
17 Should NIPSCO utilize the Contract for Differences instead of the
18 BTA PPA, NIPSCO shall submit a work paper in each quarterly
19 FAC filing comparing recovery amounts under the Contract for
20 Differences and the BTA PPA to show that NIPSCO’s customers
21 are not negatively impacted by using the Contract for Differences.
22 NIPSCO shall work with interested FAC stakeholders in the
23 development of the work paper. 25
23
IURC Cause Nos. 45462 (Order May 5, 2021) and 45463 (Order March 29, 2021).
24
IURC Cause No. 45463 (Order March 29, 2021) p. 8.
25
Id. p. 9, ordering paragraph 4.Public’s Exhibit No. 1
Cause No. 45529
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1 The Commission required the same in Cause No. 45462 to ensure ratepayers
2 were not negatively affected by using a CFD in lieu of the BTA PPA. 26
3 Q: Is the OUCC recommending the same requirements for this Solar Project?
4 A: Yes.
V. RECOMMENDATIONS
5 Q: Please list the OUCC’s recommendations.
6 A: In order to minimize risk, the OUCC recommends:
7 1) Any additional costs associated with the Joint Venture or Solar Project
8 should be subject to 50/50 cost sharing and included in the aforementioned
9 future investment cap to shield ratepayers from increased cost risk.
10 Additionally, NIPSCO should refile Mr. Campbell’s attachments with any
11 future rate proceeding where the costs associated with the Joint Venture are
12 recovered.
13 2) Any unintended negative consequences resulting from using a CFD rather
14 than a BTA PPA be unrecoverable from ratepayers through the FAC (or any
15 other recovery means). Also, NIPSCO should work with the OUCC to
16 develop a workpaper for use in the FAC to show the flow of dollars under
17 the CFD and the BTA PPA, if the CFD is utilized.
18 Q: Does this conclude your testimony?
19 A: Yes.
26
IURC Cause No. 45462 (Order May 5, 2021) p. 70.Public’s Exhibit No. 1
Cause No. 45529
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APPENDIX A
1 Q: Summarize your professional background and experience.
2 A: I graduated from the University of Evansville in 2004 with a Bachelor of Science
3 degree in Environmental Administration. I graduated from Indiana University,
4 Bloomington in May 2007 with a Master of Public Affairs degree and a Master of
5 Science degree in Environmental Science. I have also completed internships with
6 the Environmental Affairs Department at Vectren in the spring of 2004, with the
7 U.S. Environmental Protection Agency in the summer of 2005, and with the U.S.
8 Department of the Interior in the summer of 2006. During my final year at Indiana
9 University, I served as a research and teaching assistant for a Capstone course
10 offered at the School of Public and Environmental Affairs. I also have obtained my
11 OSHA Hazardous Operations and Emergency Response (“HAZWOPER”)
12 Certification. I have been employed by the OUCC since May 2007. As part of my
13 continuing education at the OUCC, I have attended both weeks of the National
14 Association of Regulatory Utility Commissioners’ (“NARUC”) seminar in East
15 Lansing, Michigan, completed three 8-hour OSHA HAZWOPER refresher courses
16 to maintain my certification, and attended the Indiana Chamber of Commerce’s
17 Environmental Permitting Conference.
18 Q: Describe some of your duties at the OUCC.
19 A: I review and analyze utilities’ requests and file recommendations on behalf of
20 consumers in utility proceedings. Depending on the case at hand, my duties may
21 also include analyzing state and federal regulations, evaluating rate design andPublic’s Exhibit No. 1
Cause No. 45529
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1 tariffs, examining books and records, inspecting facilities, and preparing various
2 studies. Since my expertise lies in environmental science and policy, I assist in
3 many cases where environmental compliance is an issue.
4 Q: Have you previously provided testimony to the Indiana Utility Regulatory
5 Commission (“Commission”)?
6 A: Yes.AFFIRMATION
I affirm, under the penalties for perjury, that the foregoing representations are true.
Cause No. 45529
NIPSCO, LLC/Elliott Solar Generation, LLC
The “Joint Venture”
Date: May 24, 2021CERTIFICATE OF SERVICE
This is to certify that a copy of the foregoing Indiana Office of Utility Consumer Counselor
Public’s Exhibit No. 1 Redacted Testimony of OUCC Witness Cynthia M. Armstrong has been
served upon the following counsel of record in the captioned proceeding by electronic service on
May 24, 2021.
Petitioner Intervenor-CAC
Bryan M. Likins Jennifer A. Washburn
Alison M. Becker Reagan Kurtz
NISOURCE CORPORATE SERVICES – LEGAL CITIZENS ACTION COALITION
blikins@nisource.com jwashburn@citact.org
abecker@nisource.com rkurtz@citact.org
INDIANA OFFICE OF UTILITY CONSUMER COUNSELOR
115 West Washington Street
Suite 1500 South
Indianapolis, IN 46204
infomgt@oucc.in.gov
317/232-2494 – Phone
317/232-5923 – FacsimileYou can also read
