By Tom Kleckner
AUSTIN, Texas — The Public Utility Commission (PUC) of Texas on Friday orally approved Southwestern Public Service Company’s (SPS) request to build a wind farm in West Texas, clearing the way for a 1.23-GW project that will provide renewable energy and economic benefits to SPS customers in the Lone Star State and New Mexico.
“It’s hard for me to look at this and do something different than what” benefits ratepayers, said PUC Chair DeAnn Walker.
Walker and Arthur D’Andrea requested additional information from SPS during the commission’s April 12 meeting, expressing doubts as to whether they had a “legal basis” to grant an application for new generation when the company already has sufficient capacity. (See Texas Regulators Seek More Details on SPS Wind Project.)
“I’m sorry if we kind of freaked out, but it’s a big question, and we don’t have a ton of time to review it,” D’Andrea told SPS representatives and the consumer groups with whom they had reached a unanimous settlement.
“I think you’ve done a nice enough job … for the ratepayers,” D’Andrea said. “You’ve certainly done a great job of getting everyone’s finger on the trigger.”
SPP staff had also previously stamped its approval on the SPS proposal.
Walker instructed staff to reflect Friday’s several minutes of discussion in its draft order. The final order will be approved during the PUC’s May 10 meeting (Docket No. 46936).
“It’s been a very cooperative effort, with both local stakeholders and statewide stakeholders,” SPS President David Hudson told RTO Insider after the April 27 open meeting. “This project will bring tremendous economic value to the region for three decades.”
The commission’s approval allows SPS parent Xcel Energy to proceed with construction of a 478-MW wind farm near Plainview, Texas, and a 522-MW facility near Portales, N.M., both in SPP’s footprint. Xcel will begin construction on the Texas facility in June and in New Mexico next year.
The company, which will own both facilities, will also purchase 230 MW of energy from two NextEra Energy Resources in Texas.
SPS received approval for the New Mexico portion of the project from the state’s Public Regulation Commission in March.
Xcel says the project will save customers hundreds of millions of dollars in production costs over a 30-year period. SPS will receive 100% of the available production tax credits for 10 years, passing the savings directly to its customers.
Xcel also expects the project to generate more than $150 million in local property tax payments over the next 25 years in Texas and New Mexico.
PUC Lowers CenterPoint Energy’s Tx Rates
The commission also approved CenterPoint Energy’s request to revise its wholesale transmission rates to reflect the reduction of the federal income tax corporate rate from 35% to 21%, thanks to the Tax Cut and Jobs Act of 2017 (Docket No. 48065).
The revision reduces CenterPoint’s transmission rate base from $2.11 billion to $2.08 billion and its wholesale transmission revenue requirement from $389.5 million to $347.8 million. Its interim wholesale transmission rate drops from $5,753.91/MW to $5,138.64/MW.
