During my tenure as an Arkansas Public Service Commissioner, I was tasked with the duty of ensuring that public utilities provide safe, adequate and reliable utility service at just and reasonable rates. I was also tasked with ensuring that customers were not charged excessive rates for services, such as electricity.
Historically, Arkansas has been successful at maintaining retail electricity rates much lower than the national average, ranking 47th for the cost of our electricity based on the most recent data from the U.S. Department of Energy.
And while our low cost of electricity depends in large part on our use of nuclear energy and fossil fuels such as coal and natural gas, we’ve seen significant growth in the use of alternative energy sources in recent years. In fact, hydroelectric, biomass, and other renewable energy sources now provide roughly 10 percent of our state’s electricity generation mix, and it continues to grow. Just last year Entergy opened a new 475-acre solar power generating facility in Stuttgart and announced plans to build an even larger 800-acre solar project in Chicot County.
Fortunately for ratepayers, these new renewable energy projects that have been approved in Arkansas have had sound financial projections that make economic sense for both utilities and their customers. Yet, that isn’t always the case.
Take, for example, the proposed Wind Catcher project currently before the Arkansas Public Service Commission and its agency counterparts in Oklahoma, Louisiana, and Texas. The Wind Catcher project proposes to construct a $4.5 billion wind farm and a transmission line that spans Oklahoma and feeds new electricity into those four states. Advocates of Wind Catcher tout that this project is projected to create thousands of jobs, but the truth is those jobs will all be in Oklahoma, along with millions of dollars in tax benefits, meaning there will be no economic benefit for Arkansas. Yet, it will be SWEPCO’s customers in Arkansas that will end up footing a large portion of the bill, and the risk.
SWEPCO’s customers in Louisiana and Texas will also bear costs associated with the project and the burden if Wind Catcher fails to fully qualify for the federal Production Tax Credit (PTC). Wind Catcher’s ability to qualify for the PTC is imperative to the promised projected savings and, if the PTC is compromised, so are Arkansas, Louisiana, and Texas consumers. The bottom line is that Wind Catcher expects electricity consumers in surrounding states to bear the risk of the cost to build and maintain the system while receiving none of the economic benefits.
With the prospect of increased jobs and tax revenue going to Oklahoma, you would assume that state’s officials would be excited about the project, but even they see through the project’s empty promises. Oklahoma Attorney General Mike Hunter opposes Wind Catcher because developers failed to comply with a law that protects ratepayers from bearing the cost for unreasonable projects that they do not benefit from.
Furthermore, a judge recently recommended that Wind Catcher be denied because the project violated the Oklahoma Public Utilities Commission’s competitive bidding rules and failed to request pre-approval of the project, which is required by law. These are only two of a myriad of mistakes, flawed assumptions, and logistical problems associated with the project.
Arkansas is not a wealthy state. Our residents, and our businesses, can’t afford to bear the risk of costly, ill-advised projects like Wind Catcher. Shipping Arkansas ratepayer dollars to Oklahoma so that we can import electricity from a project that doesn’t benefit our state just doesn’t make sense.
We’re making great strides in renewable energy projects right here at home that improve our energy infrastructure, create local jobs, and keep our electricity costs low without burdening ratepayers. Investing in Arkansas is a much better alternative for all of us than Wind Catcher, and it’s the right thing to do.
Betty Dickey served as a member of the Arkansas Public Service Commission from 1999-2002.
Editorial on 03/08/2018
Print Headline: Bad deal for state