By Tom Kleckner
American Electric Power’s massive Wind Catcher Energy Connection project in the Oklahoma Panhandle continues to rack up regulatory wins.
On Wednesday, independent transmission company GridLiance and Tri-County Electric Cooperative announced they have joined a settlement agreement with AEP related to the company’s proposed 2-GW, $4.5 billion project.
Meanwhile, a Texas administrative law judge has issued a proposed decision approving AEP’s application before the state’s Public Utility Commission. The PUC will take up the proceeding at its July 12 open meeting (Docket No. 47461).
Under the settlement’s terms, GridLiance subsidiary South Central MCN will have the option to construct, own and operate any additional Wind Catcher interconnections in Tri-County’s panhandle service territory of Cimarron, Texas and Beaver counties. The agreement will also provide protections guaranteeing that AEP subsidiary Public Service Company of Oklahoma (PSO) will not provide retail service in Tri-County’s certified service territory for 25 years after the project begins commercial operation.
South Central and Tri-County, along with the Oklahoma Municipal Power Authority and Oneta Power, have now joined with Oklahoma Industrial Energy Consumers and Walmart in reaching settlement agreements with PSO on Wind Catcher.
The parties are requesting that the Oklahoma Corporation Commission approve the terms of the agreements. PSO said the terms “collectively result in significant customer savings guarantees and increased use of natural gas power” generated in Oklahoma. (The recent agreements include a new power purchase agreement with Oneta for 300 MW of gas-fired energy and capacity beginning in 2022.)
Dallas-based GridLiance said agreeing to the settlement will allow it to “adequately plan and operate its existing transmission system and future interconnections for the benefit of its utility partners.” Those partners included Tri-County, which will also retain the right to serve retail electric load in its service area.
The co-op’s CEO, Zac Perkins, said the right to serve retail load will last for the life of the Wind Catcher project.
“By partnering with GridLiance on this settlement, we were able to secure the rights to defend the service territory of our retail customers,” Perkins said.
GridLiance CEO Calvin Crowder said the company was pleased with the settlement.
“The panhandle’s economic development depends on a reliable local transmission system that serves multiple needs, and GridLiance remains committed to serving those needs now and in the future,” he said.
GridLiance, which focuses on collaborating with public power entities, entered into an agreement with Tri-County in 2015 to plan, construct and operate transmission infrastructure projects in the panhandle. (See GridLiance Makes First Acquisitions.)
PSO CEO Stuart Solomon said in a release that the agreements further demonstrate that Wind Catcher is good for customers.
“The agreements guarantee customers will save money and allow us to move forward with our plan to increase use of Oklahoma-based renewable energy and natural gas generation to provide affordable, reliable service to our customers,” he said.
PSO is seeking regulatory preapproval to recover $1.36 billion in project costs. It has proposed to the OCC that it cap project costs at 103%, and it has guaranteed the project would qualify for 100% of federal production tax credits available when Invenergy began construction in 2016.
Wind Catcher would consist of an Invenergy-developed wind farm containing 800 2.5-MW turbines. A 360-mile, 765-kV line from the panhandle to Tulsa will connect the wind farm to PSO’s grid and that of sister company Southwestern Electric Power Co., which owns 70% of the project.
AEP says Wind Catcher will result in $7 billion in energy savings for its utility customers in Arkansas, Louisiana, Oklahoma and Texas. The Arkansas Public Service Commission has already approved the project, but it still awaits regulatory OKs in the other three states.
SWEPCO has filed an application before the Texas PUC to amend its certificate of convenience and necessity and authorize its interest in Wind Catcher, and for preapproval of various ratemaking treatments to recover the project costs. The utility estimates its share of the costs at approximately $3.2 billion, with $1.1 billion within Texas retail jurisdiction.
In recommending the project’s approval, Texas ALJ Henry Card relied on the precedent set by the commission’s recent approval of Southwestern Public Service’s wind farm in West Texas. In that proceeding, the commissioners overcame their concerns that SPS was requesting 478 MW of energy when it already had sufficient capacity on its system to meet demand. (See Texas PUC Issues Final Order for SPS Wind Farm.)
“Utilities may obtain a CCN for general economic purposes not just when there is an increase in demand necessitating additional generation,” Card said in his decision.
