July 27, 2018
Oklahoma, Texas

PSO pulls plug on massive Wind Catcher energy project

By Jack Money | The Oklahoman | Fri, July 27, 2018 | newsok.com

The landscape of future electrical power production in Oklahoma may have shifted somewhat Friday.

Public Service Co. of Oklahoma announced it won’t pursue further efforts to gain approval from state regulators for its proposed Wind Catcher Energy Connection project.

Its announcement came a day after regulators in Texas rejected the proposal, which Southwestern Electric Power, Public Service Co.’s sister utility, had submitted to them.

If it had ultimately been approved in Texas and Oklahoma (approvals already had been given by regulators in Arkansas and Louisiana), the largest single wind project proposed in the nation would have been built to supply power to about 1.1 million customers served by the two utilities.

The utilities failed to provide an answer that satisfied regulators as to what would be most economical for consumers.

Natural gas-fired power generation is competitive with wind-produced energy, thanks to an abundant, cheap supply of fuel and ever-improving efficiencies in the equipment used to make the power.

PSO had asked the Oklahoma Corporation Commission to determine there was a need for the Wind Catcher Connection to get preapproval to recover its costs from ratepayers.

If the deal had been approved, the utility would have been allowed to recover about $1.4 billion, its cost to buy 30 percent of the 2,000-megawatt Wind Catcher farm that was being built in Oklahoma’s Panhandle.

Along with co-owning the generating facility with Southwestern (both are subsidiaries of American Electric Power), the two also had proposed building and operating a power line hundreds of miles in length that would have carried electricity from the farm into the grids they operate. The project’s expected total cost was $4.5 billion.

While PSO had been successful in getting support from a major retailer, industrial consumers and associated power businesses, its plans were opposed from the outset both by the Oklahoma Attorney General and the commission’s Public Utility Division.

There were legal problems with the project that conflicted with Oklahoma rules and law because the project hadn’t been competitively bid and because work on it had started before PSO had filed its cost recovery request.

State officials also questioned whether customers would financially benefit from the project during its 25-year life.

PSO had agreed the project would add costs to consumers’ bills. But it also predicted its wind energy would be more affordable than other alternatives, and based that on future natural gas pricing that critics said was unrealistic.

They had backed that prediction by guaranteeing they would reimburse customers for part of the project’s costs if those price projections were wrong.