OKLAHOMA CITY – Public Service Company of Oklahoma filed a 23-page exceptions report Feb. 23 in response to an Oklahoma Corporation Commission administrative law judge’s recommendation earlier this month against pre-approval of PSO’s request to allow the company to charge ratepayers to help fund the project.
“We are extremely disappointed in the ALJ’s report. The ALJ report would deny our customers the extraordinary savings that Wind Catcher would provide, and would effectively stop one of the largest private investments in state history, which would deny the State and local communities the tax revenues and economic development benefits of Wind Catcher,” PSO officials said.
PSO officials said they put on a strong case that demonstrated Wind Catcher is good for PSO’s customers and that state, and that guarantees were made assuring customer benefits.
“Unfortunately, the ALJ ignored the evidence and issued a recommendation that is contrary to the interests of PSO customers,” the company said.
PSO is looking to recover an anticipated expenditure of about $1.36 billion for the project. The joint effort – between Public Service Co. of Oklahoma and Southwestern Electric Power Co. – is a $4.5 billion project that involves building a wind farm in Oklahoma, a 350-mile power line and two substations.
The wind farm, to be built on 300,000 acres in Cimarron and Texas counties in the Panhandle, will include about 800 2.5 MW wind turbines. A power line will stretch from there to Tulsa, bringing 2,000 megawatts of energy to customers in Eastern and Southwestern Oklahoma, in addition to parts of Texas, Arkansas and Louisiana.
Much of the exceptions report filed by PSO refutes the attorney law judge’s recommendation report.
The judge’s recommendation said that PSO failed to prove there is an economic need for the project and the company’s economic analysis used unreasonable data and a flawed planning process.
In addition, the recommendation states PSO’s analysis “contained assumptions regarding future gas prices, carbon costs, and wind additions that overstate the benefits of the project,” and that the project shows potential risky elements such as the risk of cost overruns on, or complete failure of, the Gen-Tie line; failure of Wind Catcher to qualify for full production tax credits and a risk of non-performance by other AEP companies.
The recommendation also states the PSO failed to exercise competitive bidding.
“A project at this price must be done right. Given the facts of this Cause, the ALJ cannot recommend preapproval of the project in light of PSO’s failure to competitively bid both the Wind Facility and the Gen-Tie line and PSO’s failure to adequately explain the lack of competitive bidding for such significant purchases,” the recommendation states.
The full 136-page attorney law judge’s recommendation can be seen at http://www.occeweb.com/.
In the company’s report, PSO claims there were “three fundamental legal errors” in the judge’s report, including claiming that need can only be met through capacity or regulatory requirements, that the project be competitively bid and that the Gen-Tie line is not part of the generation facility.
“(The report) fails to recognize that the Commission in OAC … expressly provides a utility an alternative to competitive bidding,” the report reads.”
PSO claims in its report that there were also factual issues in the judge’s recommendation.
These include that the company provided convincing support for its economic analysis of the project; the company demonstrated the project will produce significant net benefits for customers; and the company’s generic wind case properly analyzed reasonable alternatives to the project, according to the report.
“PSO respectfully requests this Commission reject the ALJ report and issue an order applying a proper construction and application of Section 286(C) to PSO’s Application, consistent with past Commission pronouncements, and a review of possible guarantees and conditions that mitigate any risk and uncertainty of the Project, consistent with past Commission reviews,” according to the report. “Under such a review, the Commission will find that the evidence in the case clearly demonstrates that the Project meets a need … that PSO properly considered reasonable alternatives to the Project, and that the project is in the public interest.”
Development of the line route began in the summer of 2017, and the project is expected to deliver wind energy to customers by the end of 2020. A number of leaders in Northwest Oklahoma have expressed support for the project while numerous landowners set to have their properties impacted by the power line have voiced concern and opposition.
PSO President and COO Stuart Solomon told the Enid Regional Development Alliance in January that PSO expects a decision from the commission by around the end of March.
“We’re hopeful the Commissioners will reject the ALJ’s report and approve this project, which will deliver extraordinary savings to customers and economic benefits to our state,” company officials said.
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