Indiana Michigan Power

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Indiana Michigan Power (I&M) is a subsidiary of American Electric Power. I&M was organized in Indiana in 1925 and "is engaged in the generation, transmission and distribution of electric power to approximately 582,000 retail customers in northern and eastern Indiana and southwestern Michigan, and in supplying and marketing electric power at wholesale to other electric utility companies, rural electric cooperatives, municipalities and other market participants."

Among the principal industries served are primary metals, transportation equipment, electrical and electronic machinery, and metal, rubber, chemical, and plastic products. In addition to its AEP System interconnections, I&M is interconnected with the following unaffiliated utility companies: Central Illinois Public Service Company, Duke Ohio, Commonwealth Edison Company, Consumers Energy Company, Illinois Power Company, Indianapolis Power & Light Company, Louisville Gas and Electric Company, Northern Indiana Public Service Company, Duke Indiana, and Richmond Power & Light Company.

Existing Coal Plants

Plant	State	Year(s) Built	Capacity
Rockport Plant	IN	1984, 1989	2,600 MW
Tanners Creek Plant	IN	1951, 1952, 1954, 1964	1,100 MW

Rockport ninth in 2009 mercury emissions

The 2011 Environmental Defense Fund report, "Mercury Alert: Cleaning up Coal Plants for Healthier Lives" found that 25 plants alone are responsible for nearly a third of all mercury emissions in the power sector, while providing only eight percent of U.S. electricity. The findings are based on 2009 U.S. Department of Energy data. The plant with the ninth highest mercury emissions was Indiana Michigan Power's Rockport Plant, releasing 852 lbs in 2009.

Rate Increases

• Base rates:

In a January 2008 I&M requested an increase in its Indiana base rates of $80 million including a return on equity of 11.5%, and an off-system sales sharing mechanism for the eventual decommissioning of the Cook Nuclear Plant. In March 2009, the Indiana Utility Regulatory Commission (IURC) approved the request with modifications, providing for an annual increase in revenues of $42 million including a $19 million increase in revenue from base rates, and a $23 million increase in tracker revenue. In addition, the IURC order required I&M to review and file a final report by December 2009 on the effectiveness of the Interconnection Agreement including I&M’s relationship with the Pennsylvania – New Jersey – Maryland regional transmission organization.

• Rockport and Tanners Creek Plant Increases:

"In January 2009, I&M filed a petition with the IURC requesting approval of a Certificate of Public Convenience and Necessity (CPCN) to use advanced coal technology which would allow I&M to reduce airborne emissions of NOx and mercury from its existing coal-fired steam electric generating units at the Rockport and Tanners Creek Plants. In addition, the petition is requesting approval to construct and recover the costs of selective non-catalytic reduction (SNCR) systems at the Tanners Creek Plant and to recover the costs of activated carbon injection (ACI) systems on both generating units at the Rockport Plant. I&M is requesting to depreciate the ACI systems over an accelerated 10-year period and the SNCR systems over the remaining useful life of the Tanners Creek generating units. I&M requested the IURC to approve a rate adjustment mechanism of unrecovered carrying costs during construction and a return on investment, depreciation expense and operation and maintenance costs, including consumables and new emission allowance costs, once the projects are placed in service. I&M also requested the IURC to authorize the deferral of the cost of service of these projects and carrying costs until such costs are recognized in the requested rate adjustment mechanism. Through March 2009, I&M incurred $9 million and $6 million in capitalized project costs related to the Rockport and Tanners Creek Plants, respectively, which are included in Construction Work in Progress."

• Indiana Fuel Clause Filing:

"In January 2009, I&M filed with the IURC an application to increase its fuel adjustment charge by approximately $53 million for April through September 2009. The filing included an under-recovery for the period ended November 2008, mainly as a result of the extended outage of the Cook Plant Unit 1 (Unit 1) due to fire damage to the main turbine and generator, increased coal prices and a projection for the future period of fuel costs including Unit 1 fire related outage replacement power costs. The filing also included an adjustment, beginning coincident with the receipt of insurance proceeds, to reduce the incremental fuel cost of replacement power with a portion of the insurance proceeds from the Unit 1 accidental outage policy. See “Cook Plant Unit 1 Fire and Shutdown” section of Note 4. I&M reached an agreement in February 2009 with intervenors, which was approved by the IURC in March 2009, to collect the under-recovery over twelve months instead of over six months as proposed. Under the order, the fuel factor will go into effect, subject to refund, and a subdocket will be established to consider issues relating to the Unit 1 fire outage, the use of the insurance proceeds and I&M’s fuel procurement practices. The order provides for the fire outage issues to be resolved subsequent to the date Unit 1 returns to service, which if temporary repairs are successful, could occur as early as October 2009. Management cannot predict the outcome of the pending proceedings, including the treatment of the insurance proceeds, and whether any fuel clause revenues will have to be refunded as a result."

I&M customers

In a background profile on the company, I&M states that its largest customers in 2008 were:

• Steel Dynamics
• Mittal Steel
• Air Products and Chemicals
• BOC Gases
• Saint Gobain Corp.
• Ball State University
• New Energy Corp.
• Wal-Mart Stores
• Michelin North America
• Unifrax Corp.

Contact details

I&M Headquarters
One Summit Square
110 E. Wayne St., Fort Wayne, IN
Phone (Indiana) 800 311 4634
Phone (Michigan) 800 311 6424
Website: https://www.indianamichiganpower.com/Default.aspx

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