NiSource unit signs $2.2 billion tolling deal for 600 MWAC battery project
The agreement, with a delivery term of about twenty and a half years, is expected to be accounted for as a finance lease obligation.
Key takeaways
- NiSource Inc. (NI) said in a filing that subsidiary NiSource Generation Company LLC signed a battery storage tolling agreement on Oct. 15 with Atlas Storage 1 LLC. The 600 MWAC project would carry about $2.2 billion in storage payments over about twenty and a half years. The deal takes effect only if conditions are met by Jan. 31, 2027.
NiSource Inc. (NI) said in a filing Friday that its subsidiary, NiSource Generation Company LLC, signed a battery storage tolling agreement on Oct. 15.
The counterparty is Atlas Storage 1 LLC, an indirect subsidiary of AGP Capital Holdings Pte. Ltd., referred to in the filing as AGP Group.
Under the agreement, AGP Group will develop, construct, own and operate a stand-alone battery energy storage system rated 600 MWAC and 2,400 MWh.
The project will connect to the transmission system run by the Midcontinent Independent System Operator, Inc., known as MISO.
The NiSource unit will supply the electricity used to power the project, at its own expense.
It will also have the right to instruct dispatch and receive the economic benefits of the project's capacity, discharged energy, storage and ancillary services, and, where applicable, environmental attributes.
Those benefits include revenue from selling those products into applicable MISO markets.
The delivery term is expected to run about twenty and a half years, starting at the commercial operation date for the project's first phase.
That date is expected by Dec. 1, 2027.
The unit will pay AGP Group regular storage payments based on a fixed rate, subject to certain adjustments, plus the project's actual power capacity.
Aggregate storage payments over the delivery term are expected to total about $2.2 billion.
The company expects to account for the agreement as a finance lease obligation under FASB ASC Topic 842.
The agreement is not yet effective.
It becomes effective only if AGP Group executes two contracts by Jan. 31, 2027.
Those contracts are an engineering, procurement and construction contract for the project and an interconnection agreement reasonably satisfactory to AGP Group.
The agreement also gives the NiSource unit an exclusive and irrevocable option to purchase the project at specified intervals during the delivery term and at its end.
The filing does not disclose a price for that option, and it does not say how AGP Group will fund construction.
The filing was made under Item 2.03, which covers the creation of a direct financial obligation or an obligation under an off-balance sheet arrangement.