January 14, 2020
Oklahoma

Public Service Co. of Oklahoma gets recommended approval of its plan to add wind power

By Jack Money | The Oklahoman | Tue, January 14, 2020 | oklahoman.com

Don’t call Public Service Co. of Oklahoma’s plan to add 675 megawatts of additional wind power to its portfolio “Wind Catcher II.”

A witness testifying Monday before an Oklahoma Corporation Commission administrative law judge and two of three elected commissioners who sat in on the hearing said there are several reasons why that description would be inaccurate.

“I have kind of bristled at the comparison,” Matthew A. Horeled, PSO’s regulatory and finance vice president, testified on Monday in response to a question about it posed by Commissioner Dana Murphy.

Horeled said PSO took competitive bids on farms that are part of the pending proposal from the market to meet energy needs for its portfolio it previously had calculated.

In the Wind Catcher case, no competitive bids were sought on the project it proposed.

“We fully let the market dictate what the pricing would be and where the projects would be located,” he said, adding that an independent engineer was brought in to evaluate 35 bids that were submitted.

Plus, as Murphy acknowledged as part of her question, the current proposal before commissioners doesn’t include the need for a new high-voltage line to carry the power from the farms onto PSO’s grid.

Instead, PSO will be able to tap the energy using the state’s existing grid.

“With Wind Catcher, you had to bring that energy from the Panhandle across the state to get to our facilities,” Horeled said.

“With our careful selection of these facilities, we get a great price, great wind velocity and we are able to tie this into our system without the need for an immediate line, and hopefully none” ever.

“That is a huge avoided cost, and a key overall distinction between the two for me.”

A jointly stipulated settlement agreement pending before commissioners would allow the utility to recover from its ratepayers about $908 million it proposes to spend to buy that energy.

Administrative Law Judge Dustin Murer, who is considering the case’s merits, heard testimony from Horeled and several other witnesses Monday about the proposed agreement.

If the commissioners agree, then PSO would acquire a 45.5% ownership on three farms being built that will stretch across parts of Alfalfa, Blaine, Custer, Garfield, Kingfisher, Major and Woods counties.

The combined projects are expected to add 1,485 megawatts of total capacity and cost about $2 billion to build. PSO proposes to jointly own them with a sister utility, Southwestern Electric Power.

While Southwestern is working with regulators in Arkansas, Louisiana and Texas to gain approval of its plan, Horeled stressed PSO is pursuing its plan on its own and that it expects to move forward to close its deal, even if regulators elsewhere deny approval and Southwestern were to back out of its part of the plan.

“We have built in a lot of optionality into our agreement which gives us the ability to provide this project to our customers even if … Southwestern didn’t come along,” Horeled said.

PSO expects the acquisition of its share of power the new farms would generate will save its customers more than $1 billion in energy costs during the 30-year time frame the wind farms are in service, even after the $908 million purchase cost.

Utility officials have said they expect the farms will be operational by the end of 2021.

PSO serves more than 550,000 customers in eastern and southwestern Oklahoma and has about 3,800 megawatts of generating capacity.

The power PSO would get, officials said, would add to 1,137 megawatts of wind energy it already secures for its customers through existing wind power purchase agreements.

The pending agreement was made between the utility, the commission’s Public Utility Division, the Oklahoma Attorney General’s Office and consumer groups.

At the end of the hearing, Murer indicated he would recommend the agreement’s approval to Commissioners Murphy, Bob Anthony and Todd Hiett, the group’s current chairman. Hiett joined Murphy in attending Monday’s hearing. Commissioners will consider the recommendation soon.

URL to article:  https://www.wind-watch.org/news/2020/01/14/public-service-co-of-oklahoma-gets-recommended-approval-of-its-plan-to-add-wind-power/