American Electric Power Co.’s proposed Wind Catcher Energy Connection garnered potentially favorable feedback from Texas recently, but questions still surround the multistate plan.
Two administrative law judges in Texas issued a proposal for decision last week that recommended granting an application from AEP’s Southwestern Electric Power Co. (Swepco) – with certain conditions to ensure a net benefit to customers. For now, the AEP unit appears to be digesting the situation.
“We are evaluating the proposal for decision that was issued by the administrative law judges on May 18 as part of the Public Utility Commission of Texas’ ongoing review process,” Peter Main, a spokesman for Swepco, said in a statement.
The roughly $4.5 billion Wind Catcher project is intended to help deliver power to customers of two AEP-owned utilities – Public Service Company of Oklahoma (PSO), which serves parts of Oklahoma, and Swepco, which operates in portions of Arkansas, Louisiana and Texas. AEP’s Wind Catcher plan includes a proposal to acquire a 2,000-megawatt wind farm that Invenergy LLC has been working on in Oklahoma. The idea also includes a 765-kilovolt power line that would run hundreds of miles in Oklahoma.
AEP has said Wind Catcher is designed to save customers billions of dollars over 25 years, net of cost. Last July, AEP said Swepco would own 70 percent of the project and about 1,400 MW of wind, while PSO would have 30 percent and roughly 600 MW of wind.
The Public Utility Commission of Texas could accept, reject or modify the recommendation from the administrative law judges. The proposal for decision discusses a variety of possible conditions, such as a potential cost cap and a guaranteed net capacity factor.
Earlier this month, Arkansas regulators issued an order in support of a modified settlement related to Wind Catcher. But the Louisiana Public Service Commission moved last week to see how regulatory processes play out in Oklahoma and Texas before it makes a decision on a settlement in its state. Swepco said yesterday it’s confident the settlement in Louisiana is strong and that it provides savings as well as customer protections.
Then there’s Oklahoma, where an administrative law judge previously recommended againstpreapproval. The judge cited various factors, including a lack of competitive bidding for major aspects of the project.
The office of Oklahoma Attorney General Mike Hunter issued a statement this month to say that, while he remains opposed to preapproval of Wind Catcher, there are ratepayer protections he would like to see if preapproval were granted by Oklahoma regulators. An assistant state attorney general and the director of the Public Utility Division of the Oklahoma Corporation Commission signed a document that discusses potential requirements.
Stan Whiteford, a PSO spokesman, said in a statement that the company shares an interest in making sure customers benefit. He noted that the company seeks approval of the project under certain terms. Whiteford said PSO will work with parties “to help get Wind Catcher across the finish line” so customers and Oklahoma could benefit from low-cost energy and investment in the state.
An upcoming decision by the three members of the Oklahoma Corporation Commission is expected to be key, as their preferred path could play a big role in the fate of Wind Catcher.
“It’s not over till it’s over, and it looks like Oklahoma might be the biggest hurdle out there,” said Paul Patterson, an analyst with Glenrock Associates LLC.
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