Indiana Michigan Power (I&M), an operating company of American Electric Power (NYSE:AEP), is adding another 100 megawatts (MW) of wind power to its generation portfolio as part of a 20-year power purchase agreement reached with E.ON Climate and Renewables; N.A. (EC&RNA).

The agreement will result in the construction of Wildcat -1; a new wind farm located in Madison, Grant, Howard and Tipton counties about 45 miles northeast of Indianapolis.  The turbines at the site will be connected to the AEP transmission system to deliver power to I&M customers in both Michigan and Indiana. Construction on the Wildcat-1 Wind Farm is slated to begin before year’s end and it is expected to be fully operational by the end of 2012.

“In three years, Indiana has moved from last to leader in wind energy production. I am pleased to see that our support for clean energy resources is further encouraging the development of wind energy in Indiana,” said Lt. Governor Becky Skillman.

The wind power agreement resulted from a request for proposals (RFP) issued by I&M in January to construct a wind farm within its service territory. I&M considered having an ownership stake in a wind project, but the competitive bid received from E.ON proved to be a better deal for I&M and its customers.

“Our agreement with E.ON is just another example of continuing efforts to diversify our generation portfolio,” said Paul Chodak III, president and chief operating officer for Indiana Michigan Power. “This project will not only provide renewable energy to serve all I&M customers, it will bring jobs and provide long-term economic benefits to communities in our service territory.”

I&M considered a number of sites within its Michigan and Indiana service territory for a new wind farm before moving forward with the proposal from E.ON’s Wildcat-1 Wind Farm. “The sites that were proposed to I&M as part of the RFP process demonstrate the resource potential and community support that exists for developing wind powered generation,” noted Chodak. “The proposal from E.ON allows I&M to make more wind power available to our customers at the most reasonable cost.”

“We are excited to be expanding our wind energy business into the Midwest," said Steve Trenholm, CEO of EC&RNA. “The Wildcat project will produce enough energy to power roughly 60,000 homes and will offer new clean energy resources to I&M’s customers.”

The agreement is subject to approval from regulators in both states. I&M also has two power purchase agreements for a total of 150 MW from the Fowler Ridge Wind Farm located in Benton County in Indiana.