American Electric Power Co.’s proposal for the largest-ever U.S. wind-power project received a setback Monday.
The company failed to prove that customers should pay for the $4.5 billion Oklahoma project through power rates, Mary Candler, an administrative law judge in the state, said in a filing. Her non-binding recommendation will be considered by the Oklahoma Corporation Commission, which has final say on the project.
American Electric wants advance approval from regulators in Arkansas, Louisiana, Oklahoma and Texas to buy the 2,000-megawatt Wind Catcher project that Invenergy LLC is developing. The project also calls for a 350-mile (563-kilometer) transmission line, and the utility is seeking to bake the costs into customer rates.
Candler highlighted American Electric’s failure to take competitive bids for the project.
“A project at this price point must be done right,” Candler wrote in the filing. “An excuse of ‘not enough time’ for competitive bidding is not sufficient.”
American Electric has said a delay would risk $2.7 billion of production tax credits that would flow through to customers. It estimated that customers would save about $7 billion over 25 years as wind power displaces generation from natural-gas fueled plants.
The analysis “used unreasonable data” and a “flawed planning process,” Candler wrote.
The judge “ignored the evidence” from the utility, including its guarantee of customer benefits, Stan Whiteford, a spokesman for American Electric’s Oklahoma utility, said in an email. “We’re hopeful the commission will reject the ALJ’s report and approve this project.”
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