A multi-billion-dollar multi-state renewable energy project has lost a key vote at the Texas Public Utility Commission — a development that had led to the cancellation of what otherwise would have been the nation’s largest wind facility.
The proposed 2,000-megawatt Wind Catcher Energy Connection was to have included a major wind farm on 300,000 acres in the Oklahoma Panhandle plus a dedicated 360-mile power line, but at a total cost of about $4.5 billion.
If eventually completed, the project would have served customers in Texas, Louisiana, Arkansas and Oklahoma. Southwestern Electric Power, which serves about 185,000 customer in Texas, sought a 70 percent share. Public Service Company of Oklahoma, its sister company, was to have owned 30 percent.
But during a meeting July 26 in Austin the Texas PUC’s three commissioners questioned the expense of the project, the company’s calculations of offsetting savings and the financial risk to ratepayers. On Thursday the commissioners voted 3-0 against regulatory approval and on Friday the company announced it was canceling the project, according to reports.
“I don’t believe I could approve the PFD,” said Walker, referring to a proposal for decision sought by SWEPCO but that the PUC rejected on Thursday, “I don’t believe it provides sufficient safeguards for the ratepayers. … We know what the costs are (but) the benefits are based on a lot of assumptions that are questionable.”
During an earlier PUC hearing Rex VanMiddlesworth, an attorney for a coalition of industrial energy consumers, had estimated that SWEPCO’s base rates in Texas would increase 38 percent because of the wind project. He said electricity from relatively low-cost natural gas-fired plants would cut into any presumed savings from wind power.
“(And) the project is not needed — we have plenty of capacity,” said VanMiddlesworth.
PUC staff also has said that Texas did not require the project for reliability purposes. Staff described the project as “speculative.”
SWEPCO officials argued that the addition of low-cost wind energy would offset costs to ratepayers in the Texas Panhandle. SWEPCO also argued the project made long-term economic sense because it would allow the utility to hedge against natural gas prices should they increase in the future.
“We are disappointed that we will not be able to move forward with Wind Catcher, which was a great opportunity to provide more clean energy, lower electricity costs and a more diverse energy resource mix for our customers,” said Nicholas Akins, chairman, president and chief executive officer of American Electric Power Co..
PUC Chair Walker said she would have liked interested parties to agree on additional customer protections, as was the case in May when the commission authorized a separate agreement allowing the construction of a wind farm for Southwestern Public Service. “(But) the only reason it worked for the SPS case was because everyone agreed,” she said. “We don’t have that situation here, where everyone could agree to what I believe are reasonable conditions.”
Regulators in Arkansas and Louisiana previously approved the Wind Catcher project, while it still required authorization from regulators in Oklahoma and from the Federal Energy Regulatory Commission. AEP’s Akins said that in order to move forward, the company had required timely approvals from all the relevant jurisdictions so it could complete the project by the end of 2020 and begin receiving wind-related tax credits.
SWEPCO serves more than a half million customers, including 185,000 in East Texas and the Panhandle.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.