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Officials approve NIPSCO interconnection agreement, agree to 50% of $453,000 fee to activate solar field
Summary
City officials voted to approve an interconnection agreement with NIPSCO and to pay half of a $453,000 upgrade fee so the recently installed solar array can be connected and start producing power this year, helping secure roughly $2.1 million in IRA tax credits, officials said.
City officials at a municipal meeting approved an interconnection agreement with Northern Indiana Public Service Company (NIPSCO) and agreed to pay 50% of an estimated $453,000 utility upgrade fee so a city solar field can be connected and placed into service this year. The board voted to authorize the agreement and the initial payment after staff said the step is needed to secure federal tax credits attached to the project.
The move matters because staff said the project’s eligibility for Inflation Reduction Act (IRA) tax credits depends on energizing the system this calendar year. "If we do not get power to the solar and run it this year, we cannot file for those for next year," said Tracy, a wastewater treatment plant staff member who presented project details. City staff told the board Baker Tilly estimated the tax-credit value at about $2.1 million.
Officials described the utility’s work as extensive: NIPSCO told the city it must upgrade external lines and equipment to accommodate the solar field’s output. The utility’s initial estimate for that external work was about $453,000. After negotiations, NIPSCO provided an agreement that splits payment: 50% due before it begins work and the remainder due on completion. The city’s presentation said on-site equipment is already staged and that the only remaining coordination is to schedule a temporary shutdown of the plant’s power feed so crews can complete the interconnect.
City staff and the mayor described the solar array as a roughly $3 million investment that is expected to reduce the city’s electric purchases by about one-third once operating at full capacity. Staff also said NIPSCO’s engineering review indicated the utility will assess whether local lines can accept exported power in brief intervals rather than continuously; that assessment affected the scope and cost of upgrades. City staff said NIPSCO would not give a definitive schedule for the external upgrades and that the utility indicated the connection timing could be 12 months or longer for some components.
During discussion, board members and staff described the situation as an unexpected late-stage cost tied to how utilities evaluate distributed generation. The mayor said the negotiation that produced the split payment was the result of extensive staff work. "Sometimes you spend money to save money," the mayor said.
The board voted to approve the agreement and to move forward with the initial payment. Staff noted the approval is necessary to meet requirements of the city’s SRF-funded project and to position the city to claim the IRA credits.
City staff said they will schedule the plant shutdown with NIPSCO and proceed with the interconnect work; the agreement requires the second payment on completion of the upgrades.
