Corporation Commission asked to revisit proposal on Wind Catcher project
Talks between interested parties and Public Service Co. of Oklahoma over its proposed 2,000-megawatt Wind Catcher project have generated a revised agreement that's gained some support and should be reviewed by elected regulators, a utility executive stated in a filing it made this week.
In supplemental testimony filed in the case with the Oklahoma Corporation Commission late Tuesday, Steven L. Fate, regulatory and financial vice president for PSO, stated the revised proposal is now supported by the Oklahoma Industrial Energy Consumers organization — a frequent and active interested party in electric utility-related cases that go before the commission.
Fate also said Walmart Stores East and Sam's East Inc., two companies that previously indicated support for Wind Catcher, also signed the revised agreement.
However, various other state regulators, organizations and companies that filed as interested parties in the case, including the commission's public utility division, have not yet indicated their support.
The Wind Catcher Connection project involves a wind farm being developed by Invenergy that will consist of 800 wind towers powered by 2.5-megawatt wind turbines built by GE Renewable Energy. The farm's footprint will cover parts of two Oklahoma Panhandle counties.
It also includes a planned 360-mile-long line from the Panhandle to Tulsa's west side that would carry 600 megawatts of power from the farm to PSO's grid. The total estimated cost for the entire project is $4.5 billion.
PSO would own 30 percent of the project, while its sister American Electric Power utility, Southwestern Electric Power Co., would own the remainder. PSO and Southwestern are seeking preapproval of their costs to participate in the project before various state regulatory bodies.
PSO, meanwhile, is asking for preapproval from the Oklahoma Corporation Commission to recover its estimated $1.36 billion share of the costs.
The stipulations in the revised settlement agreement guarantee:
• Project costs for ratepayers will be capped at 103 percent, or $1.399 billion — less than what previous cost caps had offered.
• The project will be eligible to receive 100 percent of federal energy production tax credits that were available when construction began in 2016.
• The project will provide an average net power generation equaling 46 percent of its GenTie line capacity, and its customers will benefit from 100 percent of off-system energy sales and be credited with net proceeds from the sale of renewable energy credits associated with Wind Catcher.
• PSO will review the project’s financials after 10 years of operation to determine whether customers received a net
benefit. If not, the utility is pledging to reduce customers’ rates to achieve that goal during the project’s remaining life.
Fate testified those guarantees, especially the last, address opponents’ concerns.
“Importantly, if for some reason the completion of the Gen-Tie line is delayed, or if natural gas prices are extraordinarily low, or production tax credit savings do not materialize as forecast, or savings from avoided
carbon costs are not realized, this ... takes all these factors, among others, into account to ensure customers benefit.
The revised settlement was produced through talks that happened after the issue was heard by the agency’s elected commissioners in March.
That hearing came after months of testimony before an administrative law judge at the commission who had recommended rejecting PSO’s preapproval request.